US faces $1 billion in trade penalties for meat labels

The World Trade Organization (WTO) ruled Monday that Canada and Mexico may slap more than $1 billion in tariffs on U.S. goods in retaliation for meat labeling rules it says discriminated against Mexican and Canadian livestock.

At issue were U.S. labels on packaged steaks and other cuts of meat that say where the animals were born, raised and slaughtered.

The WTO previously found that the country-of-origin labeling put Canadian and Mexican livestock at a disadvantage. It ruled Monday that Canada could impose $780 million in retaliatory tariffs and Mexico could impose $228 million.

“We are disappointed with this decision and its potential impact on trade among vital North American partners,” said Tim Reif, the general counsel for the Office of the U.S. Trade Representative.

The labels are supported by some U.S. ranchers and by consumer groups. They are opposed by meatpackers who say they require costly paperwork.

The WTO decision shifts responsibility to Congress, which is considering working a repeal of the labeling law into a massive year-end spending bill.

Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said Monday that he will look for “all legislative opportunities” to repeal the labeling law. “We must prevent retaliation, and we must do it now before these sanctions take effect,” he said.

The labeling law was included in the 2002 and 2008 farm bills at the behest of ranchers from northern U.S. states who compete with the Canadian cattle industry. It was also backed by consumer advocates who say it helps shoppers know where their food comes from.

The Associated Press