Question Period Note: VOLUNTARY PRODUCT OF USA LABELLING

Q1 – What is the difference between voluntary “Product of USA” labelling and voluntary “Product of Canada” labelling guidelines? Q2 – Will Canada use retaliatory measures/tariffs against the final rule? Q3 – Is the United States meeting its WTO obligations?

R.1 - Canada supports enabling consumers to make informed choices and have access to affordable food.
The “Product of USA” labelling can only be used for animals born, raised, slaughtered and processed in the U.S.
In Canada, the guidelines allow the use of “Product of Canada” labelling for cattle that have spent a period of at least 60 days in Canada before slaughter.
Canada has had guidelines for the voluntary use of “Product of Canada” and “Made in Canada” claims since 2009, based on the Safe Food for Canadians Act and the Food and Drugs Act. These guidelines apply to all foods sold in Canada. R.2 - Canada was granted retaliatory rights by the WTO when we successfully challenged the U.S.’s 2008 mandatory country-of-origin labelling (COOL) measure.
The voluntary Product of USA rule is different than the U.S.’s mandatory COOL rule, which required all covered beef/pork products sold in the U.S. to indicate the country of origin.
Canada is reviewing the final rule carefully and is closely monitoring its impacts and implementation, including in light of the U.S. international trade obligations. R.3 - Government officials are analyzing the final rule in light of the U.S.’ obligations under the WTO and CUSMA.
The requirement is voluntary but will apply when a retailer decides to label a product with a Product of United States of America label.
While this is different than the U.S.’ mandatory COOL rule, we remain concerned with changes that could cause a similar detrimental impact on Canadian livestock and meat industries.

• On March 18, 2024, the United States (U.S.) government published a final rule on its voluntary Product of United States of America (PUSA) labelling requirements for meat, poultry, and egg products. The final rule is the result of a previously announced (July 1, 2021) “top to bottom” review of the regulations by the United States Department of Agriculture (USDA). AAFC is working on this issue in close collaboration with Global Affairs Canada (GAC) and the Canadian Food Inspection Agency (CFIA).

• Under the final rule, the authorized claims “Product of USA” or “Made in the USA” or a U.S. flag may be displayed on labels of U.S. Food Safety and Inspection Services (FSIS)-regulated products only if the product is derived from animals born, raised, slaughtered, and processed in the U.S.. The final rule also applies to processed products, which must meet the above-mentioned criteria, have all other inputs (except spices and other flavorings) grown and processed in the U.S. and also have the preparation and processing steps for the processed products, taking place in the U.S.. This is a significant departure from the current rule that allowed “Product of USA” or “Made in the USA” to be displayed on meat products that are “processed” in the U.S..

• Also in March 2024, the USDA published draft guidelines for the implementation of voluntary labelling of products with U.S.-Origin Claims. The guidance document and the option to use qualified claims (e.g. claims depicting specific step(s) taking place in the U.S. such as “slaughter and processed in the US”) do not address Canada’s concerns that the rule could lead to discrimination and segregation of animals and products.

• As of January 1, 2026, and going forward, establishments choosing to or forced to use the voluntary claim will have to comply with the new labelling regulations and have sufficient documentation in place to demonstrate compliance.

• This change could have an adverse impact on Canada’s meat and livestock sector because it would likely require traceability and segregation of Canadian cattle, hogs, and meat products throughout the supply chain. However, the voluntary nature of this rule makes it challenging to predict impacts to Canada given that it will depend entirely on uptake.

• The requirement would apply only when an establishment decides or is forced by an end-user to label a product with a PUSA label, which is different than the U.S.’s mandatory COOL rule, which applied to all covered related products sold in the U.S., and which Canada successfully litigated at the World Trade Organization (WTO) for beef and pork.

• Canada is working closely with industry and provinces to monitor the impacts on our meat and livestock supply chains. We understand that large retailers and processors in the U.S. are reviewing the final rule before making labelling decisions. With a compliance date of January 1, 2026, it could take some time before potential impacts materialize.

• The Government of Canada also continues to engage on this file at all levels with our U.S. counterparts. Unfortunately, the trilateral meeting originally scheduled to take place in Colorado at the end of March 2024, has been postponed. A new meeting date has not yet been set. Ongoing U.S. Bill and Canada’s Successful Challenge of Previous Mandatory COOL at the WTO

• In September 2008, mandatory COOL was implemented in the U.S., and had a significant negative impact on the Canadian cattle and hog industries.

• In December 2008, Canada (and separately, Mexico) initiated dispute settlement proceedings at the WTO on the COOL requirements for beef and pork. The WTO found, on four separate occasions, that COOL discriminated against imports of Canadian (and Mexican) livestock and was in violation of the U.S.’s trade obligations.

• On December 21, 2015, the WTO granted final authorization for Canada to retaliate up to C$1.055 billion annually (and Mexico up to US$228 million) on U.S. exports to Canada.

• On December 18, 2015, U.S. Congress passed legislation which repealed the COOL requirements for beef and pork.

• On March 2, 2016, the USDA published a Final Rule to amend the implementing regulations for COOL to reflect the repeal for beef and pork.

• Despite Canada’s WTO victories and the subsequent repeal of COOL for beef and pork, there continues to be attempts in the U.S. (i.e., in Congress, certain state legislatures) to introduce voluntary or mandatory COOL schemes that could restrict trade.

• Over the last two years, bills have been introduced in the U.S. Congress, in both the Senate and the House, to reintroduce mandatory COOL. These bills generally seek to direct the U.S. Trade Representative, in consultation with the U.S. Secretary of Agriculture, to develop a WTO-compliant means of reinstating mandatory COOL for beef. There are currently three proposed bills related to COOL in the current Congress.

• The Government of Canada remains concerned that the changes to the “Product of USA" labelling regulations for meat, poultry and eggs could have a detrimental impact on Canada’s livestock and meat industries (e.g. segregation of animals and discrimination vis-à-vis Canadian meat products). Negative impacts could extend to both sides of the border in terms of supply chain integration, supporting local/regional food systems, food inflation, and food security.

• Canada is disappointed that the rule does not reflect the unique and important bilateral trading relationship between Canada and the U.S.

• Canada is reviewing the final rule carefully and is closely monitoring its impacts and implementation, including in light of the U.S. international trade obligations.
• Canada continues to engage at all levels with U.S. officials to highlight the unintended consequences that the final rule could have on both sides of the border.
• It is important that producers, processors, and consumers, on both sides of the border, can continue to benefit from efficient, stable, and competitive markets.