World Trade Organization (WTO) Director-General Roberto Azevedo
IN PHOTO: World Trade Organization (WTO) Director-General Roberto Azevedo gives a speech in Mexico City August 11, 2014. Failure to reach a global customs rules deal could have a "considerable impact" on other areas of global trade negotiation, Azevedo said on Monday during a visit to Mexico. Late last month, India torpedoed a deal to simplify, standardize and streamline the rules for shipping goods across borders, know as "trade facilitation", after it demanded concessions on agricultural stockpiling. REUTERS/Henry Romero Reuters/Henry Romero

The defeat of the U.S at the World Trade Organization on 18 May over the discriminatory labeling compliant moved by Canada has reinforced the threat of retaliatory trade measures from Canada. Canada is America's largest trade partner.

Victory in the labellnng case went to both Canada and Mexico that hinged around a dispute related to a U.S. regulation that required certain product labels to include an item's country of origin. The U.S enforced this rule in 2009.

The WTO verdict is final and there is no scope for appeal. It is final "without the possibility of further appeal," said Ed Fast, Canada's minister of international trade. "Our governments will be seeking authorisation from the WTO to take retaliatory measures against U.S. exports," a joint statement from the Mexican and Canadian ministers for trade and agriculture said, reports AFP.

Canada, in its complaint to WTO argued that the U.S measure had been harming its pig and cattle breeders. In the past also, Canada fought the COOL or country-of-origin labeling rule at the WTO, saying it was discriminatory against Canadian products. But every time Washington kept tweaking the regulation to circumvent the ruling.

The main grouse of Canadian beef and pork industries was that the U.S rules have led to cost escalation for producers. Many have exited the business or cut down livestock exports. It also drove many farmers out of business with extra costs on them going beyond CA $1 billion a year.

Retaliatory Duty Soon

Minister Ed Fast noted that the WTO has endorsed "Canada's long-standing position that these measures are blatantly protectionist and discriminating against Canada. In the light of final ruling and due to the fact that the United States has continued to discriminate against Canadian livestock products, Canada will be seeking authority from the WTO to use retaliatory measures on US agricultural and non-agricultural products."

It is likely that Canada will slap duties on a number of U.S. goods ranging from fruits and chocolates to cereal, jewelry and wooden furniture. Ed Fast said the government stands on the side of Canadian farmers and ranchers, and will continue to protect all hardworking Canadians throughout this retaliatory process. The WTO verdict favouring the plea of Canada and Mexico will be increasing pressure on the U.S. Congress to scrap the concerned laws. Republicans, now enjoying a majority in Congress have signaled they may act to repeal the laws. However, consumer groups and Democrats say they are only helping consumers by providing them the essential information.

Upholding the complaint of Canada, the WTO said the U.S. laws requiring retailers to label meat with the country name where the animal was born, raised and slaughtered amounted to discrimination against imported livestock, reports Reuters.

(For feedback/comments, contact the writer at k.kumar@ibtimes.com.au)

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