February 25, 2009 / 6:31 PM / 9 years ago

Canada holds fire on new U.S. meat labeling rules

OTTAWA (Reuters) - Canada’s agriculture minister said on Wednesday he sees no reason at this time to revive a trade challenge against the United States over its new meat labeling rules.

“Right now, they’ve gone with what we’re asking for,” Gerry Ritz told reporters.

Ritz later clarified that he was concerned, however, by new voluntary labeling guidelines issued by Washington, which have been a source of confusion for industry players as they await implementation of the new rules as of March 16.

The rule requiring more explicit labels on meat sold in U.S. grocery stores initially sparked a complaint by Ottawa at the World Trade Organization because it viewed the policy as unfair to the Canadian livestock industry.

Ottawa agreed in January to put that complaint on hold after Washington made the rules more flexible in the final days of the Bush administration.

However, the Obama administration gave the rule a second look and Agriculture Secretary Tom Vilsack has asked the U.S. industry to add the extra information voluntarily to labels. He warned he may rewrite the rule to enforce the changes if industry does not comply on a voluntary basis.

Those voluntary guidelines sounded alarm bells with Canadian livestock producers and have been a source of confusion for many industry players.

“Comments regarding ‘additional voluntary labeling’ are causing uncertainty and concern for livestock industries on both sides of the border,” Ritz said, promising to monitor the implementation of the labeling rules to ensure they do not violate trade regulations.

The Canadian Cattlemen’s Association said Vilsack’s guidelines, if implemented, would prompt U.S. meatpackers and processors to stop buying Canadian livestock and beef to avoid the extra cost involved in complying with the new rules.

The organization urged Ritz to reactivate the WTO challenge immediately.

But Ritz said he has been in close contact with Vilsack and U.S. industry players and so far sees no reason to act.

“In my discussions with industry, they’re going to hold the line and work with what we had negotiated with the Bush administration,” he said. “We’ll keep analyzing it day by day. If they start to get tough, if it starts to affect our exports in a negative way, then we’ll go back harder.”

The WTO challenge is still an option, he said.

“We’ll move forward with it as soon as we see some negative responses out of their application of the country of origin labeling rules.”

Reporting by Louise Egan; editing by Rob Wilson

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