The Canadian cattle industry estimates the labelling law has cost its members $400-million, while data suggest sales of live hogs to the United States has plummeted by more than 40%.

Representatives for the cattle and pork industries are urging the federal government to file a complaint with the World Trade Organization, saying the law "clearly" represents a non-tariff barrier that threatens the livelihood of Canada's rural economy.

"Ultimately it will kill our producers in Canada," said Jurgen Preugschas, chairman of the Canadian Pork Council and a hog producer from Mayerthorpe, Alta. "It is protectionism at its worst - without understanding what the ramifications are."

The crisis enveloping the domestic livestock industry comes as world leaders have pledged to rip down trade barriers in order to get trade flowing again and mitigate further fallout from the financial crisis. The World Trade Organization has predicted global trade volumes are set to shrink this year by 9%, the first such contraction since 1982.

Mr. Preugschas acknowledges that a trade challenge won't do much, as it will take years before a final verdict is reached. "But you have to do it to make a point that you can't willy-nilly come up with laws that violate trade agreements," he said.

The law deals with country-of-origin labelling, and was years in the making and introduced in stages - in the fall and then last month. It requires that labels on meat and other foods sold at U.S. supermarkets have labels that indicate from which countries the food originates. "It is not that country-of-origin labelling per se is problematic, rather it is the current regulatory framework is incompatible with U.S. treaty commitments," said an analysis prepared for the Canadian farm groups by U.S. trade lawyers.

The Conservative government initially looked at filing a WTO complaint but backed off - with the blessing of the Canadian sector - when the Bush administration made concessions that softened certain restrictions, in particular on ground meat.

But in February, the day after U.S. President Barack Obama visited Ottawa and talked about "growing trade" with Canada, his Agriculture Secretary, Tom Vlasick, issued a letter to the U.S. meat-packing industry suggesting it undertake additional "voluntary" measures that are not in the bill, including that labels be included on processed meats.

These measures, Canadian livestock producers say, exacerbate an already-trying situation, in which a limited number of U.S. plants will take their product, and only on certain days, because the majority of packers can't be bothered to segregate the Canadian livestock and prepare different labels. Further, it has created a glut of supply on the domestic market and, subsequently, lowered the price producers can fetch on the market.

The Canadian Cattlemen's Association estimates the U.S. law has cost the sector $400-million, or $90 per head of cattle, in price discounts and costs associated to finding packers that will take their cattle. Statistics from Agriculture and Agri-Food Canada indicate that for the period to March 21, the number of feeder and slaughter cattle headed to the United States has dropped 30% from the similar year-ago period.

"If having a healthy rural economy is important to Canadians, than this is a pretty huge issue," said John Masswohl, director of government and international relations for the cattle group.

Meanwhile, live hog exports have plummeted 43%, to 1.3 million. Current estimates from the Canadian Pork Council suggest hog exports will drop this year to 5.6 million, from 9.3 million last year. More than a quarter of the nearly $3-billion in pork-related exports, either live hogs or processed meat, head to the United States.

Mr. Masswohl said he believes a WTO trade challenge is inevitable, especially given the recent moves by the Obama administration to add new restrictions. "They are taking back the flexibility we gained."

Gerry Ritz, the federal Agriculture Minister, was not available for an interview Wednesday, but in recent weeks has expressed concern about what his U.S. counterpart, Mr. Vilsack, has in store.

"We thought we had a deal with the former administration that the final rule would be implemented in a way that was more friendly to Canadian live cattle imports," Mr. Ritz said March 19, following a meeting with Mr. Vilsack. "Certainly we discussed the nature of what it takes to constitute a [WTO] challenge and Canada will move forward when and at the time of our choosing."