International Trade Minister Stockwell Day says the new U.S. meat labelling rules are devastating the Canadian livestock industry. (Adrian Wyld/Canadian Press)

Canada is filing a formal complaint with the World Trade Organization about a U.S. country-of-origin meat-labelling law that International Trade Minister Stockwell Day says is devastating the Canadian livestock industry.

During a meeting Monday in Washington, Day informed Ron Kirk, the top U.S. trade representative, about Canada's WTO challenge to the law. The legislation, known as COOL (Country of Origin Labelling), requires meat processed in the U.S. but made from Canadian livestock to be labelled as Canadian rather than simply North American as has been the case to date.

"It says we think this is offside," Day said of the notice, to be filed in Geneva in the coming days. "I gave [Kirk] a heads-up … that we're moving ahead with it."

Cattle and livestock associations have been complaining bitterly about the law, which took effect in two stages — last September and in mid-March. They say that U.S. meat packers, which buy most of Canada's meat, are reluctant to segregate livestock and prepare different labels as they are required to do under the new regulations and instead forego buying Canadian livestock altogether.

Representatives of the cattle industry estimate the legislation has cost their sector $400 million while live hog exports to the U.S. have dropped by 40 per cent since the stringent regulations were introduced. The law has also created a glut of meat on store shelves in Canada, meaning lower prices for producers.

The industry has been pushing Ottawa to revive the WTO challenge for weeks, complaining that the labelling law amounts to a non-tariff trade barrier.

Initially, the law allowed meat packers to identify their product as coming from North America. But U.S. Agriculture Secretary Tom Vilsack later asked U.S. meat packers to go beyond those rules and identify products as being from Canada or Mexico.

The legislation requires country-of-origin labelling on beef, pork, lamb, chicken, goat meat, wild and farm-raised fish and shellfish, perishable agricultural commodities, peanuts, pecans, ginseng and macadamia nuts.

It was formulated, congressional leaders have said, to meet the demands of U.S. consumers who want to know where their food comes from in an effort to reduce their carbon footprint and "buy American."