Trade compliance of proposed Product of USA label yet to be determined, says CCA

(Kara Oosterhuis/RealAgriculture)

There’s just over a month of consultation yet to go on the proposed changes to the Product of USA label, set out by the United States Department of Agriculture’s Food Safety and Inspection Service.

From the outset, Canada’s beef and pork industries have been wary of what the label might mean for the integrated value chain with the U.S. market, but the full impact of the proposed changes all comes down to what the final implementation of the regulations look like.

Dennis Laycraft, executive vice president of the Canadian Cattle Association, says that even though the changes are being brought forward within in voluntary label, if it becomes “normal practice” that everyone follows, it becomes de facto mandatory — which may contravene trade laws.

“We’re monitoring it closely. We’re working with the National Cattlemen’s Beef Association, and the North American Meat Institute who share our concerns about what’s being proposed here,” Laycraft says. (More below the player)

One of the challenges of the proposed rule is that cattle or hogs must be born, raised, slaughtered and processed in the U.S. to get the Product of USA label. Given the amount of two-way movement of cattle between Canada and the U.S., this rule would lead to more segregation, which could mean animals get discounted. If the policy is not trade compliant, Canada could retaliate.

Laycraft says it’s too early in the process to say whether or not that is a likely outcome, as this is still just a proposal and not the final rule.

Canada raising the alarm over the proposed changes has been met with some pushback by American cattle producers and industry members that say Canada has its own labeling rules that could be deemed as unfair as well, however Laycraft points out the difference.

The main difference is that the Product of Canada is used under guidelines only, not regulations.

“I’ll give one example — almost all of the cattle we import into Canada from the U.S. are breeding or feeder cattle… we were able to come up with an accommodation so that those cattle could be brought in and not be unfairly discriminated against or require additional segregation. So we found a workaround that we could because [the label rules are] a guideline, and we want to make sure that the ability to move cattle between Canada and the U.S. and where all of our cattle will move can be can be done in a way that doesn’t lead to discrimination or segregation. It’s just better for the North American market when we have it operating efficiently.”

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