(Adds background on the trade dispute, comments from U.S. government and industry officials)
By Rod Nickel
June 7 Canada wants to impose tariffs on U.S. imports ranging from meat to cherries, rice and potatoes to retaliate against the United States for what it calls a costly meat labeling requirement, escalating a 4-year-old dispute.
Canada will ask the World Trade Organization to approve its retaliatory measures in a process that will take 18 to 24 months, Canadian Agriculture Minister Gerry Ritz and International Trade Minister Ed Fast said on Friday.
Ritz said Mexico would also seek retaliation against the United States, although its list of products may not match the Canadian list. The two countries have worked closely together on addressing concerns about U.S. meat labeling rules.
Mexico's ministries of economy and agriculture did not immediately provide comment.
The dispute stems from a 2009 U.S. requirement that retail outlets specify the country of origin on labels on meat and other products in an effort to give consumers more information about the safety and origin of their food.
Canada says the labels add costs and have encouraged U.S. packers to import less Canadian livestock, driving some farmers going out of business.
If the WTO approves, Canada intends to impose tariffs on U.S. beef, pork, live hogs and cattle, corn, apples and cherries, as well as non-food products like wooden office furniture and mattresses, Ritz said in Vancouver.
Asked if the proposed retaliation was a bit like the biblical David versus Goliath battle, Ritz said he was not afraid of taking on the much-larger United States, which is Canada's biggest trading partner by far.
"If you read your Bible, you'll find David won that fight," he said. "We know we're on the side of the angels on this one."
Canada and Mexico complained to the WTO that the COOL (country-of-origin labeling) rules discriminated against imported livestock. The trade body ordered the United States to comply with WTO rules by May 23, but the U.S. Department of Agriculture made revisions that Canada and Mexico say would only make the situation worse.
A spokeswoman for the U.S. Trade Representative disagrees.
"As we have said from the outset, USDA's new final rule brings the United States into (WTO) compliance, and therefore no retaliation should be authorized," she said.
Bill Bullard, CEO of R-Calf, a U.S. cattle producers group that supports COOL, said Canada seems to be ignoring those recent changes.
"This type of boisterous claim really is a lobbying strategy in which Canada wants to bully the U.S. Congress into including something in the 2013 Farm Bill that would repeal country of origin labeling," Bullard said. "That's why the timing is as it is while the Senate is debating amendments to the Farm Bill."
The Canadian government selected which products to target with U.S. political adversaries in mind, said John Masswohl, director of government and international relations for the Canadian Cattlemen's Association.
"What is it that motivates legislators? Having their constituents complain to them," Masswohl said. "Some of the products are targeted very specifically at congressmen and senators in certain districts."
With U.S. meat processors also opposed to COOL, Masswohl said he hopes the U.S. will change its rules in a way that satisfies Canada before any new Canadian tariffs take effect.
Two-way meat and livestock trade between Canada and the United States is worth more than $5 billion a year.
The last major dispute between the two countries was over softwood lumber, where the U.S. accused Canadian lumber firms of setting artificially low prices for wood from trees killed in a massive insect infestation. An international arbitrator dismissed a U.S. complaint last year. [ID: nL2E8IIB84]
(Additional reporting by Charles Abbott in Washington and Theopolis Waters in Des Moines, Iowa; Additional reporting by David Alire Garcia and Dave Graham in Mexico City; Editing by Lisa Von Ahn, David Gregorio and Richard Chang)