With the passage of the new farm bill by the US Senate on Tuesday, Canada's agriculture minister is warning that Ottawa is ready to implement retaliatory tariffs on US imports.
That's because the farm bill, which was approved by the House of Representatives last week, does not include any changes to American country-of-origin labeling (COOL) rules, which the World Trade Organization has ruled discriminate against Canadian cattle and hogs.
"It's unfortunate. It's an opportunity lost and I think most Americans understand that. The American industry certainly does," says Gerry Ritz. "Of course there's another plant slated for closure in California citing a lack of supply. That's the second one since the government has been hard-nosed on implementing country-of-origin labeling without the changes that have been requested by their own industry and the countries affected, like Canada and Mexico."
Another round of hearings on COOL at the World Trade Organization is scheduled for February 18th and 19th.
"Should they not conform, then retaliatory measures are there for us to be implemented, and be assured we will," says Ritz.
The US would have the option of appealing if the WTO rules in Canada's favour again. If a ruling that the US is not complying with its international trade obligations is upheld, the door would be open for Ottawa to implement retaliatory tariffs, possibly by the middle of 2015.
Ritz says he would rather resolve the issue outside of the WTO dispute settlement process.
"If we can resolve this diplomatically in a bilateral way we're far better off because it gets done sooner, but at the end of the day, the American administration has some ridiculous concept and idea that somehow this will save their small farms. Nothing could be further from the truth."