The Canadian government has released plans to impose a 100% surtax on American wine imports in retaliation to US measures on meat and livestock.

Canada has requested that a meeting of the World Trade Organisation’s (WTO) disputes body on June 17 consider a Canadian request for "authorisation from the WTO to impose over CAD3 billion (US$2.4bn) in retaliatory measures against the US", said Canadian trade minister Ed Fast - covering wine, meat and a small selection of non-food products.

In a joint statement with Mexican ministers, Fast branded the labelling system "blatantly protectionist", and said the two governments would continue to call on the US to repeal recently-introduced rules on origin of labelling for imported meat and livestock. A repeal has been proposed at the US Congress, resisted by the US National Farmers Union, which - with 282 other organisations - wants the law retained.

Robert Koch, president & CEO of California trade body the Wine Institute, said: "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."

According to Koch, US wine producers export more than US$500m of wine to Canada and Mexico annually and Canada is now the single largest export market for US.wine. The retail value of California wine sales in Canada tops US$1bn annually.