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Ottawa says it may retaliate over proposed U.S. meat-labelling plan

New York striploins are shown on Nov. 13, 2012. The Canadian government is warning Washington it may retaliate if the U.S. brings in a new, more restrictive trade rule on how beef and pork product exports are labelled.

Deborah Baic/The Globe and Mail

The Canadian government is warning Washington it may retaliate if the U.S. brings in a new, more restrictive trade rule on how beef and pork product exports are labelled.

The U.S. Department of Agriculture proposal announced Friday calls for foreign producers to list on the package of meat products where the animal was born, raised and slaughtered, as well as other packaging restrictions.

"The proposed changes will increase the discrimination against exports of cattle and hogs from Canada and increase damages to Canadian industry," Canada's Agriculture Minister Gerry Ritz said in a news release from Ottawa.

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The U.S. said the new rule would help it comply with a World Trade Organization decision last year that found its country-of-origin labelling regulation discriminated against Canada and Mexico.

The Canadian government has said one year after that regulation was imposed by Washington in 2008, shipments of Canadian cattle into the U.S. dropped by half and exports of slaughter hogs declined by 58 per cent.

Ritz called the new proposed rule "extremely" disappointing and said it would make the discrimination worse, hurting Canadian producers and the meat industry even more badly.

He said Ottawa will respond if the U.S. doesn't back off, but did not say how.

"Our government will consider all options, including retaliatory measures, should the U.S. not achieve compliance by May 23, 2013, as mandated by the WTO."

The Canadian Cattlemen's Association and the Canadian Pork Council issued statements Friday saying they share Ottawa's concerns.

The pork council estimates the U.S. government's current meat labelling rule has already cost Canada about $1-billion per year in reduced beef and cattle exports.

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"The proposed rule is supposed to remove discrimination found by the WTO after a lengthy expensive challenge by Canada," the council said in a release.

"It does not do this, indeed, it exacerbates the problems."

The USDA said its country-of-origin rule is designed to help consumers make informed decisions about the food products they buy.

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