The Canadian government is fuming over a U.S. farm bill and warning of trade retaliation, in the latest twist in a dispute that just days ago showed signs of resolution.
American lawmakers have refused to make changes to country-of-origin labelling that had been sought by the Canadian government and beef and pork producers.
Federal Agriculture Minister Gerry Ritz and International Trade Minister Ed Fast say they're disappointed, adding Canada may retaliate by imposing tariffs on a wide range of American products.
Country-of-origin labelling rules are blamed for complicating the import of meat and livestock into the U.S. from Canada and for reducing the amount of Canadian exports to the country by half since 2008.
The rules require detailed labels about the origins of beef, pork and chicken sold in U.S. stores.
That drives up the price tag of Canadian exports and undermines their competitiveness, causing about $1 billion a year in losses.
"By refusing to fix country-of-origin labelling, the U.S. is effectively legislating its own citizens out of work, and harming Canadian and American livestock producers alike by disrupting the highly-integrated North American meat industry supply chain," the ministers said in a statement.
"Our position remains that the changes made by the United States administration to mandatory COOL (will) increase discrimination against North American producers and processors, hurting hard-working Canadians and Americans alike.
"Our government continues to stand with our industry, and we remain steadfast in taking whatever steps may be necessary, including retaliation, to achieve a fair resolution."
Not long ago, Ritz had signalled some optimism on the topic, saying the chairman of a U.S. congressional committee had requested that his Department of Agriculture back off on the labelling rules.
The committee has no authority to force the change, but it does control the USDA.'s budget.
However, the U.S. lawmakers' decision — part of a massive federal farm bill to be voted on Wednesday — crushed Canadian hopes.
Some U.S. companies have said they can't afford to sort, label and store meat from Canada differently than meat from domestic animals.
In October, Tyson Foods Inc., one of the largest buyers of Canadian cattle in the U.S., said it would stop buying from feedlots north of the border because of the higher cost of complying with the regulations.
Ritz has said Ottawa will continue fighting the regulation at the World Trade Organization and cattlemen on both sides of the border will go on with their own court action.
John Masswohl, a spokesman for the Canadian Cattlemen's Association, was also disheartened.
"They seem unwilling to consider any amendment," he said. "It just seemed that through the negotiations, there was more to it for the COOL proponents than just consumer information; it seemed they were very intent on maintaining the discrimination — that was the fundamental objective they had."
He said several U.S. farm groups have said they will oppose passage of the farm bill and will work over the next few days to encourage congressmen and senators to vote against it.
But he said if that doesn't work, Canada would be looking to impose retaliatory tariffs on U.S. exports in the first half of 2015 on things such as beef, pork, cereals, cakes, cookies and fruit.
"The products that are on that list were selected because they're produced in areas that are represented by congressmen and senators who oppose that resolution in the farm bill."
It's not just Canada's meat industry that is upset.
U.S. meat-packing companies are vowing to fight the bill as it makes its way through Congress.
The farm bill won't just create controversy in the meat-packing industry.
Anti-poverty advocates are also fuming over cuts to food stamps. Those cuts, however, are only a fraction of what some Republicans were demanding.