Business

Omnibus bill passing through Congress set to solve meat labelling, oil export issues

A trade war between Canada and the U.S. appears to have been averted, with U.S. Congress drafting legislation that responds to its neighbours' demands on meat labelling and other issues
Canadians have lobbied hard to have U.S. laws that mandate country of origin labelling for meat. A new bill that would do away with that requirement may soon land on the U.S. President's desk. (Reuters/Saul Loeb/Pool )

A trade war between Canada and the U.S. appears to have been averted, with U.S. Congress drafting legislation that responds to its neighbours' demands on meat labelling.

The bill would repeal mandatory country-of-origin labelling on beef and pork should it pass a vote in the coming days, which would end a years-long dispute pitting the U.S. against Canada and Mexico.

Lawmakers are expected to begin debate Wednesday on a monster omnibus bill. Meat labels are just one brief provision in the 2,000-page omnibus package negotiated between Republican and Democratic leaders, which has major economic implications far beyond the labelling dispute.

With temporary financing of federal agencies expiring Wednesday at midnight, congressional leaders planned to approve a stop-gap bill preventing a government shutdown through next Tuesday, giving lawmakers time to finish the long-term spending legislation.

The two-part compromise announced Tuesday included a $1.1 trillion measure funding federal agencies in the 2016 federal budget year that started Oct. 1. A separate bill, roughly estimated at around $650 billion over the next decade, renews around 50 business and individual tax breaks that have expired or are about to lapse.

Republicans are claiming a win on the bill by including a provision that would lift America's 40-year ban on exporting crude oil outside NAFTA, which was created during the energy crisis in the 1970's.

Meat labelling a major issue for Canada

The repeal of the labelling law had been signalled in advance: Canada and Mexico were poised to immediately impose $1 billion in tariffs on a wide range of American products including wine and frozen orange juice following wins at the World Trade Organization.

Canada's ambassador to the U.S., Gary Doer, welcomed the news but said he wouldn't be celebrating until the bill passes both chambers of Congress and gets signed by the president.

"This is the result of a full-court press," he said, referring to the government and business lobbying efforts over the years.

"(But) we won't have a beer to celebrate — a Canadian beer to celebrate — until the president signs the bill."

That could happen later this week, or early next week.

Supporters of country-of-origin labelling say consumers deserve to know where their meat comes from. Opponents say it doesn't do anything for safety — for which there are already inspections.

Those critics call it a thinly disguised protectionist measure, designed to complicate importing meat from abroad into the U.S. They say Canadian meat exports plummeted as a result of decade-old country-of-origin labelling rules.

John Masswohl of the Canadian Cattlemen's Association pointed to the example of Tyson Foods. He said Canada used to export beef to four of its U.S. facilities, and now exports to only two — and only on one day per week, so that workers can segregate Canadian and American cattle and apply the proper country-of-origin labels.

"We think this is going to have a huge impact," Masswohl said in an interview Wednesday.

"And it could have a pretty immediate impact in terms of the prices we receive."

The bill lifts beef and pork from the list of products subject to country-of-origin labelling requirements — but that's only one provision of a bill that could prompt noisy debate.

The bill might be most remembered in the U.S. for another provision: a relaxing of the 40-year-old quasi-total ban on oil exports from the U.S., imposed amid the energy scare of the 1970s.

That provision could have a huge impact on American energy, not to mention a potential trickle-down effect on the U.S.'s biggest oil supplier — Canada.

With files by The Associated Press

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