The end of 2014 is fast approaching but there’s no slowing down for the Canadian Cattlemen’s Association (CCA). The Canadian cattle industry remains fluid and dynamic with much activity in the areas of trade and market access, and the CCA is at the table working on behalf of Canada’s 68,500 beef operations.
November and December saw CCA officials travelling to meet with U.S. cattle industry allies to ensure they remain motivated by the potential of retaliatory tariffs to lobby U.S. politicians to fix U.S. mandatory country-of- origin labelling (COOL).
I met with representatives from Minnesota, Nebraska, Colorado and Montana in Regina at a round table organized by the Saskatchewan Stock Growers Association on November 25. Along with CCA director of government and international relations John Masswohl, I next visited Iowa and Nebraska where we were asked to present to the Iowa Cattlemen’s Association and Nebraska Cattlemen’s meetings. Earlier, Masswohl had travelled to Kansas, along with CCA director Doug Sawyer, and had also been to Washington, D.C., and Washington State.
These missions are important as these states rely on importing both feeders and fed cattle from Canada to keep their feedlots and packing plants operating at efficient levels. We still see divisions between U.S. cattle producers who support COOL and those who recognize COOL for the long-term threat that it represents to their businesses. Our presence is intended to help those on the fence recognize that we are stronger working together than forcing retaliation and I can see that we are making a difference towards that.
The CCA also plans to attend a meeting of state agriculture and rural legislators (SARL) and the American Farm Bureau (AFB) meetings in January. AFB’s position is that they support COOL but feel it needs to be WTO compliant. We will make sure they understand that Canada is serious about imposing tariffs on a wide variety of U.S. agriculture and processed products if the discrimination against our livestock is not eliminated. We hope they will adopt a more proactive position in support of Canada’s position.
At this stage, the CCA is interested in the right fix as opposed to a fast fix. This would involve the U.S. making an appropriate resolution to COOL that is acceptable to Canada and Mexico in order to avoid retaliation.
These various meetings are timely following the November 28 decision by the U.S. to appeal the World Trade Organization (WTO) Compliance Panel ruling of October 20, which found that the U.S. has failed to bring its COOL program into compliance with its WTO obligations. The appeal is the U.S.’s final procedural option before Canada can exercise its right to retaliate, and the CCA remains focused on eliminating the unfair discrimination on U.S. imports of cattle (and hogs).
Efforts like these keep the COOL reform momentum building in the U.S., including with groups that will be impacted by the retaliation that will follow if the WTO again rules in Canada’s favour on this latest appeal. The CCA believes the U.S. will lose their appeal — a move which we view as a stall tactic. While this process is expected to take several months, with a decision perhaps as early as the spring of 2015, the CCA believes it will be faster than many of its U.S. opponents anticipate.
The impact of COOL on the combined Canadian cattle and hog sectors was estimated in 2012 to be about $1.1 billion per year; however, the impact has increased since the U.S. Department of Agriculture (USDA) amended the regulation in 2013. The CCA will continue to work with the Government of Canada on the COOL file until it is fully resolved, including preparing to impose tariffs on U.S. exports selected from the June 2013 list of targeted commodities, including beef.
The Government of Canada announced the conclusion of the ratification process of the Canada-Korea Free Trade Agreement (CKFTA) in both Parliaments, a milestone that puts Canada and South Korea on track to bring the agreement into force on January 1, 2015.
Having the CKFTA implemented by January 1 was a critical objective for the Canadian beef sector as it enables Canada to keep pace with its U.S. and Australian competitors from a tariff reduction perspective. The CCA is pleased that the CKFTA will be in place on time to restore a competitive position for Canadian beef in the Korean market.
In 2002, Korea was a $40 million market for Canadian beef and its fourth-largest export destination. In 2013, with a growing tariff disadvantage relative to U.S. beef, Canada exported $7.8 million. In 2014 exports will be up $4.7 million from the previous year. Korea is still a promising market with growing consumption. It’s estimated the new market access will result in gains realized over a number of years as Canadian production rebuilds.
Trade deals like the CKFTA are important because they provide the ability to get every piece of the animal to the highest value market, and that’s what maximizes the price that Canada’s producers receive for their cattle.
In other interesting news, the CCA announced a new partnership with Viewtrak Technologies to expand the Beef InfoXchange System (BIXS). This partnership will help bring BIXS to the next level and I look forward to watching the progress.
Dave Solverson is president of the Canadian Cattlemen’s Association