WINNIPEG/ROME, Feb 15 (Reuters) - Canada has raised concerns with Rome about Italy's plan to require country of origin labels on pasta sold there, Canada's agriculture minister said on Wednesday about a move that is alarming Canadian wheat exporters just as a free trade deal gained European approval.
Rome sent a draft decree to the European Commission in December, seeking approval for labels on pasta sold in Italy that would identify where the durum wheat was grown and milled into semolina for pasta-making.
Canadian exporters and farmers fear the move would depress prices in Canada, the biggest durum exporter, as it would require Italian pasta makers to segregate supplies by country.
The European Union and Canada secured clearance earlier on Wednesday for their contentious free trade deal.
"We're working back and forth with our officials. Anything that would hurt the farmers, we don’t want,” Agriculture Minister Lawrence MacAulay told Reuters in Winnipeg, in what were the Canadian government's first comments on Italy's plan.
He said the impact on Canada would depend on how broadly Italy applies the plan, but the minister's spokesman confirmed later that Canada has "initial concerns."
European lawmakers have shown an increasing appetite for labeling due to consumer demands for information about food, and Italy has also said labeling would help its pasta industry better compete with foreign competition. Such labeling might, however, be considered disruptive to the single market, which EU authorities are charged with safeguarding.
The "protectionist measure" would create extra cost for Italian pasta-makers using Canadian supplies, resulting in lower prices for Canadian farmers, said Cam Dahl, president of Cereals Canada, an industry group whose members include farmers and crop exporters Richardson International and Cargill Ltd.
Canadian durum farmers last year grew their biggest-ever crop. Italy is Canada's biggest foreign durum buyer so far in 2016-17, as of December.
"More bad news stories just put more pressure on the entire agriculture industry in Canada," said Morgan Nunweiler, whose durum crop near Rosetown, Saskatchewan, was devalued by disease last year.
It is too early for the European Commission to comment, since it has up to three months to express observations after receiving the decree in December, a Commission spokesman said.
The labeling plan has generated mixed reaction in Italy.
Italian farmers group Coldiretti supports the plan. But pasta makers, while in favor of transparency, are concerned the labels would confuse origin with quality, said Luigi Cristiano Laurenza, secretary general of the Association of Pasta Manufacturers of the European Union (UNAFPA).
The decree also contains provisions that are only valid for Italy and could distort competition within the EU, he said.
Canada and Mexico won a similar labeling fight over the United States in late 2015.
The United States repealed country of origin labels on meat, after a World Trade Organization (WTO) panel ruled against the program.
MacAulay said he did not know if Ottawa was considering a similar complaint to the WTO, but said Canada's aim is to "keep trade flowing as freely as we can." (Reporting by Rod Nickel in Winnipeg, Manitoba, and Isla Binnie in Rome; Additional reporting by Philip Blenkinsop in Strasbourg; Editing by Matthew Lewis)