The Canadian Cattlemen’s Association (CCA) held a busy and productive semi-annual meeting in Winnipeg, Man. in August. Much of the discussion and debate around the board table focused on addressing factors that may be preventing some producers from expanding their herds to take advantage of current market opportunities. While drought and extreme dry conditions remain a very real issue for some producers in parts of B.C., Alberta and Saskatchewan, recent rainfall across a broad swath of Western Canada has alleviated the situation somewhat for many others. The precipitation is too late for crops but good for pastures and later-seeded cereals. The CCA continues to urge those who manage the programs to make decisions in a timely manner to allow producers to make timely decisions that are best suited for their operations.
The CCA was pleased to host a contingent of North American cattle association allies at the semi-annual meeting. Representatives from the U.S.-based National Cattlemen’s Beef Association (NCBA) and Nebraska Cattlemen’s Association, and Mexico’s Confederacion Nacional de Organizaciones Ganaderas (CNOG) were in attendance. In addition to supporting the CCA’s fight against U.S. mandatory country-of-origin labelling (COOL), the national associations are part of the Five Nations Beef Alliance, ensuring consistent messaging on beef access to the negotiators of the Trans-Pacific Partnership (TPP). Canada needs a TPP agreement to ensure Canadian beef producers can improve access to Japan and other growing markets in Asia. The CCA intends to be at the next, and hopefully final, round of TPP negotiations, which are expected to occur in late fall. The CCA attended the most recent round of negotiations in Hawaii, where TPP members fell just short of reaching an agreement due to the complexity of the negotiations.
There’s been a small development in the U.S. COOL case currently in the arbitration process at the World Trade Organization (WTO). The U.S. recently submitted its estimate of costs related to COOL arbitration at a nominal US$91 million. The dollar amount is related to the U.S. government’s requested arbitration, following Canadian and Mexican requests for arbitration, which the U.S. found “excessive.” Recall that Canada has requested authorization to impose tariffs on more than C$3.1 billion per year of U.S. exports. Mexico is requesting authorization for over US$713 million in retaliatory tariffs.
A hearing will take place in Geneva in the middle of September for the arbitration panel to hear arguments from Canada, Mexico and the U.S. on their respective calculations. The CCA notes that the U.S. estimate ignores any valuation related to segregation of cattle, transportation issues or price suppression in the Canadian market. Given that the WTO has already found these issues to be at the core of the COOL violation, the CCA feels confident that our calculations will be strongly considered by the arbitrators.
The CCA calls on the U.S. to fully repeal the red meat requirements of the COOL legislation before the arbitration process is complete and tariffs can be put into place. At that time, the Government of Canada will decide when the tariffs go on, how high they will be, and under what conditions the tariffs will be removed.
CCA’s Mexican and U.S. allies shared their perspectives on the U.S. COOL case at the semi-annual meeting. CNOG legal representation Alejandro Gomez said Mexico wants nothing short of full repeal. Mexico is prepared to retaliate and will defend the US$713M year figure at the WTO. Instead of publicizing a list of possible retaliation targets, CNOG and Mexican officials have approached individual U.S. congressional leaders and hand delivered lists of items for retaliation.
In the U.S., understanding that the only way to avoid retaliation is for the Senate to follow the lead of the House of Representatives, Senator Pat Roberts recently put forward legislation that repeals COOL once and for all. The U.S. Senate was unable to make the required legislative change to repeal COOL prior to its summer recess, which commenced August 7.
NCBA Associate Director of Legislative Affairs Kent Bacus said it is important for the entire U.S. Senate to understand that if they don’t support Senator Roberts and vote to repeal COOL, then retaliation is imminent. If retaliation does occur, then those senators who did not stand with Roberts and vote for full repeal will be held accountable for the many American jobs lost to retaliation.
In addition to COOL, Congress must also take action to avoid a government shutdown on October 1 and Congress must also address a potential default if they fail to increase the debt ceiling this fall. In previous situations the threat of defaulting on the debt and a potential government shutdown created a toxic environment and crisis mode inside Washington, D.C.
COOL is a priority in Canada as well, with a federal election on October 19. The CCA has issued its election priorities document and in it requests that the Government of Canada keep up the momentum of retaliation. The document also outlines a number of issues that can help create the operating environment for beef cattle herd expansion in Canada, such as fully funding programs that help producers manage risk, investing in infrastructure, secure access to high-value and growing markets, policies that ensure the competitiveness of Canadian producers, investment in research and sustainable practices and access to sufficient labour.
The CCA election priorities document is available on the CCA’s website at www.cattle.ca and I encourage producers to read it.