U.S. businesses plead with lawmakers to avoid trade war with Canada

March 25, 2015 – Business interests are pleading with the U.S. Congress to avert a trade war with Canada that could squeeze Florida orange-growers, put a cork in California wine exports and sour the sales of American chocolate.

Several groups Wednesday asked lawmakers to undo legislation that’s caused trade tensions with U.S. neighbours, prompting Canada and Mexico to threaten widespread retaliation.

They urged a House of Representatives committee to change the country-of-origin meat-labelling rules before they cause blowback for all sorts of American industries.

“This is a dark cloud that is forming over U.S. exporters,” said Christopher Wenk of the U.S. Chamber of Commerce.

“This is a very urgent topic.”

Canada has already listed a series of products that could be slapped with tariffs, should it and Mexico follow up their recent successes at the World Trade Organization with a win in the final
round.

But proponents of U.S. country-of-origin rules say consumers deserve to know where their meat comes from. Those mandatory U.S. labels explain where livestock was born, raised and slaughtered.

Opponents say those labels do nothing to affect safety standards, cause headaches for businesses during processing, and amount to a protectionist measure that has slashed Canadian meat exports to the U.S. by half.

The Canadian government has expressed optimism that there might be more sympathy for its position in the new, Republican-dominated Congress — even though the issue doesn’t fall neatly along partisan lines.

The body certainly sounded Canada-and-Mexico-friendly on Wednesday. The politicians who spoke at the House agriculture committee hearing, as well as the people invited to testify, almost all supported repealing the law.

“Clearly there’s no upside to this (rule),” said Republican Vicky Hartzler of Missouri.

“It’s not good for America, it’s not good for the producers, the processors, and it’s not good for the mom that goes to the grocery store that has to pay more for products. So we really do need
repealing.”

Linda Dempsey of the National Manufacturers Association warned: “Time is running out. It is imperative that Congress act quickly.”

The vice-president of California’s Wine Institute, Tom LaFaille, said producers lost 50 per cent of their exports to Mexico a decade ago because of retaliatory measures and it took them years to rebuild. LaFaille said he doesn’t want a repeat. Wine is on the Canadian hit list for possible tariffs.

Congressman Ted Yoho of Florida expressed fear for his state:  “Canada is Florida’s largest trading partner also — it would be tough for us. We ship a lot of citrus up there.”

American candy-makers aren’t too sweet on a trade war, either. Alison Bodor, the vice-president of their lobby group, the National Confectioners Association, noted that Canada’s published list of potential tariffs includes different types of chocolate and sugar-free sweeteners.

“Many American-made chocolates will disappear from Canadian shelves,” she said. “That loss of business will impact U.S. confectionery companies, their workers, and importantly also their communities.”

A rare voice in support of national meat-labelling Wednesday was the National Farmers Union. While several big livestock associations oppose the existing law, the NFU isn’t one of them.

The group’s president, Roger Johnson, urged lawmakers to be patient. He said they should wait to see the final WTO ruling, expected soon, before taking any drastic measures.

He said about 70 other countries have meat-labelling requirements. Also, in the latest rounds at the WTO, he said the body’s decisions against the U.S. have become increasingly narrow in
scope.

He said the trade body has never ruled against the principle of country-of-origin labelling — only the way the law has been applied — and he suggested the U.S. still had a chance of winning the final round.

A decision from the WTO is expected by May 18.

In a statement from Ottawa, Agriculture Minister Gerry Ritz said Wednesday that he’s pleased U.S. lawmakers are finally realizing what industry warned years ago: that the labelling rules damage an integrated North American supply chain.

Canada will be ready to retaliate if need be, he said, should it win the final round of appeals at the WTO.