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

Canada is getting the backing of considerable American corporate muscle at a determining moment in an ongoing trade struggle with the United States Congress.

About 250 U.S. companies and trade associations have sent a letter to every member of the U.S. Senate, urging them to heed Canadian and Mexican concerns over meat-labelling rules.

This comes after the World Trade Organization sided with Canada and Mexico in the dispute, opening the door to the imminent imposition of tariffs on American goods including meat, wine, and frozen orange juice.

READ: Canada urges U.S. to repeal meat labelling after $1-billion WTO ruling

The letter warns that the U.S. will face US$1 billion in tariffs on a wide range of products unless the chamber does away with a requirement that meat on American grocery shelves be labelled by its country of origin.

It's signed by some of the country's best-known companies, including Coca-Cola, Kraft and General Mills, as well as trade associations representing everything from livestock-producers to vineyards.

"There's a lot of powerful U.S. paddlers joining Canada in this canoe to get repeal of COOL (country-of-origin labelling),'' Gary Doer, Canada's U.S. ambassador, said of the letter.

After a years-long dispute, the issue could be decided by the holidays.

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

Proponents of meat-labelling call it a fair system for letting consumers know where their food comes from. Opponents say it does nothing for food safety — for which there are already inspections.

They argue that it's just disguised protectionism — a system that forces importers to spend extra money to separate foreign and domestic livestock, drives up the cost of imports and makes them less competitive.

The World Trade Organization has sided against the U.S., allowing penalties on American products.

Now the letter-signers want the Senate to adopt a bill passed in the House of Representatives that does away with the requirement that meat sold in the U.S. be labelled by country of origin.

They say one idea being floated in the Senate for a so-called voluntary system is not enough of a change to avert punitive measures.

READ: Canada seeks $3 billion in tariffs on U.S. products

Because it wouldn't satisfy the other countries, the letter says, U.S. products would be open to retaliation for potentially 18 months while the issue gets re-fought at the WTO.

"The voluntary bill currently pending in the Senate suffers from the same problem as the current COOL legislation _ it forces segregation of imported livestock to permit the use of the 'voluntary' label,'' says the letter, sent late Monday.

"As a result, the U.S. would likely lose yet another COOL case at the WTO. In that case, we would be back to where we are today — except much poorer.''

One of the main proponents of meat-labelling is Michigan Democrat Debbie Stabenow, who chaired the Senate's agriculture committee when Democrats controlled the chamber and is now the committee's No. 2 member.

She partnered with a North Dakota Republican, John Hoeven, to author a watered-down version of COOL, but their bill hasn't advanced either.

"It's disappointing that this common-sense compromise was blocked in the Senate,'' Stabenow said in a statement this week.

"However, I have always said I would not allow retaliation to take effect. It is critical that we work together to find a solution before the end of the year.''