November 10, 2015 / 3:47 PM / 2 years ago

Canada farm minister favors TPP deal, poised for trade fight with U.S

WINNIPEG, Manitoba (Reuters) - Canada’s new agriculture minister said on Tuesday he is likely to support the Trans-Pacific Partnership negotiated by the previous government, and is inclined to retaliate against the United States over a longstanding meat-labeling dispute.

Canada's new Agriculture and Agri-Foods Minister Lawrence MacAulay (L) is sworn-in during a ceremony at Rideau Hall in Ottawa November 4, 2015. REUTERS/Chris Wattie

The Liberal government elected last month, led by Prime Minister Justin Trudeau, has not taken a firm position yet on whether it will support TPP, which groups 12 Pacific rim countries.

“I suspect when I evaluate the whole thing, it will be something I support,” said Lawrence MacAulay, 69, a former potato and dairy farmer from the Atlantic province of Prince Edward Island.

“I see nothing today that would make me not want to support the whole package,” he told Reuters in an interview.

MacAulay said a C$4.3 billion ($3.24 billion) compensation package offered by the previous government to dairy, poultry and egg farmers who will face more import competition looks fair.

TPP faces a tough battle to win support in the U.S. Congress as a key senator said on Friday the Obama administration may have to renegotiate parts of the deal.

MacAulay also said Ottawa is prepared to retaliate against the United States over a meat-labeling dispute, although he conceded that Canada’s International Trade Minister Chrystia Freeland is in charge of that file.

Canada and Mexico won a World Trade Organization ruling in 2012 that said U.S. regulations illegally discriminated against imported meat.

“You cannot have a deal with foreign countries and not have them comply with the rules and then just continue on,” MacAulay said. “You have to take measures. Do we want to? No. But if we have to, I suspect we will.”

Even so, MacAulay said he spoke on Monday with U.S. Agriculture Secretary Tom Vilsack and is hopeful that Washington will comply with the WTO’s ruling. The U.S. Department of Agriculture had no immediate comment.

A WTO arbitration panel is expected to decide on an authorized amount for retaliation before the end of the year. Canada has requested authorization for tariffs on more than C$3.1 billion per year of U.S. exports.

Under the previous Conservative government, Canada identified a list of potential targets for steep tariffs, including U.S. beef, pork, wine, cherries and mattresses. MacAulay said the government has yet to decide which products to target.

(Corrects reference to story being first interview as minister in 4th paragraph)

Additional reporting by Tom Polansek in Chicago; Editing by James Dalgleish

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