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Comment: Trade talk

When the industry gathers in Calgary tomorrow for the Canadian Beef Industry Conference trade will almost certainly be a hot topic of conversation.

Of course there will be plenty of discussion about traceability, sustainability, genomics and maybe even beef checkoffs, but it will be hard to escape the immediacy of the trade agenda.

It starts with the NAFTA negotiations that begin in August, right after the Calgary conference.

On the face of it the beef sector should have little to fear from retooling NAFTA based on the list of objectives put out last month by the U.S. Trade Representative (USTR). The first line alone says it all:

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“Maintain existing reciprocal duty-free market access for agricultural goods.” Check.

Provide more regulatory compatibility. Check.

Many of the U.S. goals for Sanitary and Phytosanitary Measures could be lifted right out of the Canadian Cattlemen’s Association (CCA) wish list.

For example, the U.S. wants to establish a mechanism to expeditiously resolve unwarranted barriers that block exports of U.S. agriculture products. As long as that goes both ways, who could argue? Check.

Establish enforceable rules to ensure science-based SPS measures are developed and implemented. Check.

The one thing the document doesn’t contain is any mention of country-of-origin labelling which brought a general sigh of relief from the cattle industry on both sides of the border. Not that anyone is taking that as a final position. The CCA will be closely monitoring the negotiations looking for any scent of COOL as the talks progress.

Testifying before the U.S. House Committee on Agriculture in late July National Cattlemen’s Beef Association CEO Kendal Frazier took a similar tact, warning the Congress against using NAFTA negotiations to resurrect failed policies like COOL

Noting that it is difficult to improve on duty-free, unlimited access to Canada and Mexico, and recognizing the USTR supports this policy, Frazier said the message from the bulk of the U.S. beef industry remains the same: “Please do no harm and do not jeopardize our access.”

NAFTA has been a classic example of what a trade agreement should do: raise the GDP and incomes of every nation involved. So there will be plenty of anxiety on all sides until this new agreement is wrapped up.

Before that happens the Canada-European Comprehensive Economic Trade Agreement (CETA) will be implemented on September 21. For most producers it will be a non-event.

Canada has gained 35,000 tonnes of duty-free quota for fresh and chilled beef and veal and 15,000 tonnes for frozen product to be introduced in six installments over five years in addition to the 11,500-tonne duty-free quota that is already in place. Unfortunately, the EU is still insisting on imports of certified non-implanted beef. The protocol required to raise EU worthy beef can be found on the CCA website (www.cattle.ca). It’s long, involved and begins with the calf and as a result the volumes involved will likely remain limited.

The cattle also must be processed in a plant approved by the EU and pass all the health and safety requirements for bacterial growth, without the use of two carcass washes applied in larger North American meat plants to combat E. coli.

The CCA, Canadian Meat Council and the government are assembling a package of information to submit to European regulators to convince them of the safety of beef produced the North American way. But it could take another year before they even file their first request. Of course, European beef will have to meet our North American standards for bacteria to be imported into Canada at any price.

In short, the EU will remain a lucrative, specialty market for the few willing to pay the price to serve that market.

With no great expansion in trade from Europe many are wistfully banking on the negotiations with 10 other countries to revive a Trans-Pacific Partnership (TPP) without the U.S. Without the TPP, the CCA and other members of the Canadian Agri-Food Trade Alliance fear their position in Japan will be weakened even further. Australia has already signed an agreement with Japan and the EU has concluded its negotiations for a Japan-EU agreement.

There is some cautious optimism in the trade for TPP 11, but as this is being written there are still plenty of hurdles to clear. A big one is the desire of the Trump administration to sign bilateral trade deals with some of the 11. To us in North America Japan was always the big prize from the TPP; in Asia it was the U.S. It’s a much smaller deal now.

China is also offering Asian countries a different regional agreement.

Of course, we have our own China-Canada free trade agreement in the works, but there doesn’t seem to be any rush on this one. Meanwhile the CCA is pressing Ottawa to gain equivalent access for Canadian beef in China to the Americans who can now import boneless, bone-in and chilled beef as well as some offal products.

You have to wonder if Canada has enough trade experts to keep up to the workload this fall.

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Gren Winslow is a past editor of Canadian Cattlemen.

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