Trade war sees Canada threaten US wine

A proposal by the Canadian government to impose staggering taxes on US wine imports will be considered by the World Trade Organisation next week.

Canadian trade minister Ed Fast

Canadian trade minister Ed Fast said the US “continues to avoid its international trade obligations” (Photo: Wiki)

The country’s trade ministry, along with its Mexican counterpart, is threatening around $10 billion of retaliatory tariffs on the US over an ongoing trade disagreement, which would severely threaten the American wine industry.

Canada and Mexico blame the US failing to comply with a WTO ruling regarding the labelling of meat products. They argue that the US requirement to label meat with a country-of-origin discriminates against their products.

Ed Fast, Canadian minister of international trade, has ramped up pressure on the US to take immediate action to avoid the potentially disastrous impact on the US wine industry, which counts Canada as its largest export market.

“Despite the WTO’s final ruling that the U.S. country of origin labelling measures are discriminatory, the United States continues to avoid its international trade obligations,” Fast said.

In Washington DC, congressmen are rushing through legislation ahead of the WTO meeting to avoid the export tax hike. Yesterday, the House of Representatives passed a law repealing the labelling requirements for beef, pork and poultry. The law still needs to be approved by senators, where it is expected to meet more opposition, before it can be signed into law.

Bobby Koch, president and CEO of Wine Institute is urging the senate to pass the bill. He said that representatives voting yesterday have sent “the strongest possible message to the senate that it too must take immediate action to avoid devastating retaliation against US exports.

“Retaliation by Canada and Mexico would do hundreds of millions of dollars in damage to the US wine industry virtually overnight and it would take years to reclaim this lost market share,” he said

US wine producers export more than $500 million of wine to Canada and Mexico annually, according to figures from Wine Institute.

The World Trade Organisation will consider the proposal from Canada and Mexico on 17 June.

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