A possible trade war between Canada and the United States was prevented Friday, as the U.S. Congress passed an extensive spending bill that also repealed a controversial meat labelling law.
The 2,000-plus pages of legal procedure contained a two-page rider that scrapped the U.S. labelling law, generally known as COOL, which had turned into a major nuisance among Canada, Mexico, and the USA.
U.S. President Barack Obama officially signed the bill Friday to accomplish the legislative procedure.
The World Trade Organization granted Canada and Mexico the legal right to impose $1 billion in punitive tariffs on various U.S. products after discovering that the country-of-origin labelling terms on beef and pork products breached international business rules.
Canada and Mexico contended that the measure was nothing but thinly disguised protectionism. Supporters said consumers have a right to know exactly where their meat comes from.
International Trade Minister of Canada Chrystia Freeland and Agriculture Minister Lawrence MacAulay both accepted the passage of the legislation, calling Friday “a great day for Canada.”
“This is a real vindication of the power and significance of the WTO dispute-resolution mechanism, which has secured a real win for Canada,” Freeland said in a teleconference call from Nairobi, where she and MacAulay were taking part in an international trade conference.
“This is a decision that will have a real and immediate benefit to the Canadian economy.”
Freeland said she is expecting that the labelling regime will disappear right away.
“We will be monitoring the situation to make sure there are no problems in this area,” MacAulay added.
The ministers thanked Canadian diplomats as well as some American politicians and industries that supported getting rid of the measure. The U.S. Senate had been the final barrier, as domestic political interests kept some senators as an alternative to repealing the law.
US senator relieved
Kansas Sen. Pat Roberts, the Republican chair of the Senate’s powerful agriculture committee, expressed relief on Friday tothe media. Roberts said the retaliatory measures might have been damaging to various sectors of the United States economy.
“From the ranchers in Kansas to the jewelry makers on the East Coast, every state had something to lose from keeping mandatory COOL intact,” Roberts said in a statement.
The WTO (World Trade Organization) ruling, the latest in a series that Canada won in the dispute, had cleared the way for widespread retaliation. The targeted U.S. products included not simply agricultural products such as cattle, apples, rice, pork, wine, and maple syrup, but extended to non-agricultural products such as jewelry, wooden furniture, office chairs, and mattresses.
Freeland said Canada, however, intends to obtain formal approval in a few days from the WTO for retaliation, although the tariffs definitely won’t be imposed.
“We think that it is prudent of us to take the legal process to its formal, technical conclusion,” she said.