Canada will likely be able to impose retaliatory tariffs against the United States by late summer or early fall, if Washington doesn't repeal its country of origin labelling rules.
The World Trade Organization ruled Monday that the American label requirements, known as COOL, violate America's trade obligations.
"In light of the WTO's final decision, and due to the fact that this discriminatory measure remains in place, our governments will be seeking authorization from the WTO to take retaliatory measures against U.S. exports," Agriculture Minister Gerry Ritz said Tuesday.
"We call on the United States to repeal COOL legislation and comply with its international obligations."
International Trade Minister Ed Fast said that Canada and Mexico will ask the WTO to authorize those retaliatory measures, but the process will take some months.
Canadian stakeholders support retaliation, he said.
"We are very serious about doing this," he said.
He said, however, he doesn't see this action sparking a trade war.
"The Canada-U.S. relationship is far bigger than one particular irritant," he said.
The labelling laws segregate Canadian and Mexican livestock and meat shipments from American production.
This damages the whole North American supply chain and is costing Canadian farmers, Ritz said.
He said Canada and Mexico will continue working with the United States to eliminate the laws.