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Canada-U.S. trade war likely averted: American bill would repeal meat labels

Good news for beef and pork farmers.

A trade war between Canada and the U.S. appears to have been averted, with the U.S. Congress drafting legislation that yields to Canada's demands on meat-labelling.

The bill would repeal mandatory country-of-origin labelling on beef and pork, which would end a years-long dispute just before it escalated with a series of tariffs looming on U.S. products.

Canada and Mexico were set to impose more than $1 billion in punitive measures on a wide range of U.S. goods, including meat, wine, chocolate and frozen orange juice.

Both countries pledged to pull back from retaliation if American lawmakers repealed country-of-origin labelling. The World Trade Organization sided with Canada and Mexico in the dispute.

U.S. legislators are expected to begin debate Wednesday on a monster omnibus bill–a 2,009-page pile of legislation that makes a brief two-page reference to meat labels.

READ: Big CPGs back Canada in meat label dispute with U.S. Congress

The legislative package was negotiated between Republican and Democratic leaders and its most hotly debated provision is unlikely to be meat labels, but the loosening of a 40-year quasi-total ban on U.S. oil exports.

Canada's ambassador to the U.S., Gary Doer, welcomed the news but said he wouldn't celebrated until the bill passes both chambers of Congress and gets signed by the Barack Obama.

Votes could happen later this week, or early next week.

Supporters of country-of-origin labelling say consumers deserve to know where their meat comes from. Opponents say it doesn't do anything for food safety–for which there are already inspections.

Those critics call it a thinly disguised protectionist measure, designed to complicate the importing process for non-American livestock and make it more expensive.

They say Canadian meat exports plummeted as a result of decade-old country-of-origin labelling rules.

John Masswohl of the Canadian Cattlemen's Association pointed to the example of Tyson Foods.

READ: U.S. votes to scrap meat labelling law

He said Canada used to send beef to four of its U.S. facilities, and now exports to only two–and only one day per week, so workers there can sort out which livestock comes from Canada.

"We think this is going to have a huge impact,'' Masswohl said of the bill Wednesday. "And it could have a pretty immediate impact in terms of the prices we receive.''

The bill lifts beef and pork from the list of products subject to country-of-origin labelling requirements, but exempts chicken for which country-of-origin labels will still apply.


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