Canada shelves trade complaint over U.S. meat rule

Tue Jan 13, 2009 11:32am EST
 
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By Randall Palmer

OTTAWA (Reuters) - Canada will shelve for now its World Trade Organization complaint about U.S. rules that require a country-of-origin label on meat sold in American grocery stores, Canadian Agriculture Minister Gerry Ritz said on Tuesday.

Revisions to U.S. rules that allow greater labeling flexibility now meet Canadian needs and amount to "tremendous good news" for the Canadian livestock sector, he said.

Ritz said the U.S. changes should boost export volumes and prices.

"We've gotten what we've asked them to do," Ritz told a conference call from India, where he is promoting Canadian food products. "We should start to see live animals moving south."

The United States agreed to allow a label showing a mixed origin, for example saying beef was of U.S. and Canadian origin. This means meat packers and producers will not have to incur the extra cost of segregating Canadian animals.

He said that the price spread of U.S. meat over Canadian meat in the U.S. market had gone to "wonky" levels as the country-of-origin regulations were phased in but that this should now return to more normal levels.

Canada traditionally exports C$4 billion ($3.3 billion) a year in livestock, beef and pork to the United States. Ritz said Canadian exports were hit by the labeling requirement but he said it was difficult to say by how much.

Technically, the Canadian complaint at the World Trade Organization will not be withdrawn in case it needs to be revived as the government monitors how the revised rules are applied.   Continued...