WASHINGTON (Reuters) - Agriculture Secretary Tom Vilsack's proposal for unofficial changes to country-of-origin labels on meat sold in U.S. stores may re-ignite a cattle trade dispute with Canada, two farm lobbyists said on Wednesday.
President Barack Obama was scheduled to meet Canadian Prime Minister Stephen Harper on Thursday in Ottawa on his first foreign trip since taking office last month. The discussions were expected to include the global recession, trade and energy.
Vilsack asked meatpackers during a meeting on Tuesday to voluntarily put more details on meat labels. The Agriculture Department delayed a public unveiling of the plan on Wednesday but a spokesman said Vilsack was going ahead with the idea.
"The damage is done," a U.S. farm lobbyist said, because USDA increased frictions just before the U.S.-Canada meeting. Said another farm lobbyist: "The whole thing blew up in their faces." The lobbyists spoke on condition of anonymity.
A final set of U.S. rules for country-of-origin labeling is due to take effect on March 16. Vilsack said he would re-open the rule-making process, if packers did not agree to the unofficial changes that he suggested.
They are specifically listing the origin of cuts of meat, putting country-of-origin labels on a larger volume of processed meats and allowing less leeway on listing the origin of ground meat.
Some U.S. consumer and farm groups say the labeling rule proposed on January 15 by the outgoing Bush administration was too lax and exempted too many products.
Canada shelved a World Trade complaint last month in the belief that U.S. rules would give packers more flexibility in handling livestock. It had charged the U.S. labeling law was a trade barrier that depressed prices for Canadian livestock.
Some 1.6 million head of Canadian cattle and 9.3 million head of Canadian hogs were shipped to U.S. buyers in 2008. About 35 million head of cattle and calves are slaughtered each year in U.S. plants and 109 million head of hogs.
Canadian Agriculture Minister Gerry Ritz said on Tuesday Canada would revive its WTO challenge, if protectionist U.S. rules are put in place.
USDA spokesman Jim Brownlee said the agency was drafting a letter to packers to spell out the changes it sought. Packers were reluctant to comment on Vilsack's plan before seeing the letter.
Colin Woodall of the National Cattlemen's Beef Association said the effectiveness of country-of-origin labeling cannot be judged until rules are concrete.
"All we're asking is this January 15 rule be put in place," said Woodall.
The labeling law applies to packages of beef, chicken, lamb, pork and goat meat sold in grocery stores as well as nuts, seafood and fruits and vegetables.
Additional reporting by Christopher Doering; Editing by Walter Bagley