You may have seen in the news over the last few weeks stories about a dispute between the United States and Canada (and to a lesser extent Mexico) over U.S. country of origin labeling requirements for meat.
The U.S. Department of Agriculture recently issued final regulations requiring the country of origin labeling for certain cuts of beef. Canada and Mexico have alleged that this final rule is not consistent with an earlier WTO decision finding that a previous version of the USDA regulations were inconsistent with the United States’ WTO obligations. Now that the USDA has issued its final regulations, Canada, in particular, is publicly raising the possibility that it will impose sanctions on imports from the United States. Sanctions in this area generally take the form of additional customs duties on unrelated imported goods; often times the duties are upwards of 100%.
While the imposition of sanctions will need to be approved by the WTO (and, as a result, is a little ways off), the negotiation process has begun. On Friday, Canada’s Ministers of International Trade and Agriculture issued a statement that included a draft list of tariff classifications Canada is considering hitting with sanctions. The list primarily covers U.S. agricultural products and foodstuffs (e.g., certain types of meat, fruits, vegetables, ketchup, etc.), it also includes certain manufactured items (e.g., furniture, jewelry, etc.). The complete list is worth a quick read and can be found here. Canada is publishing this list now, so the U.S. exporters that are impacted have time to pressure their Congressional representatives to resolve the USDA meat labeling issue.
All U.S. companies that export products to Canada should review the list. If your products are currently included, there are steps you should take now to minimize the chances that they are included on the final list of products ultimately subject to the sanctions. We, together with our colleagues in Canada, have a great deal of experience with these issues and would be happy to advise further, if helpful. If it would be, just let me know.