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Politics Hamper Market Access

A North American view of the meat industry. Steve Kay is publisher and editor of Cattle Buyers Weekly

The prolonged and often violent street protests against U. S. beef have definitely delayed Korea’s agreeing to accept Canadian beef again

Politics and trade sure make awful bedfellows, as the North American beef industry well knows. Since BSE in 2003 shut off global markets for Canadian and U.S. beef, the governments of both countries have struggled to balance a push for market access with standing firm on sound science. All too often, politics has been a decisive factor as to whether markets reopen or remain closed. Throw in this year’s country-of-origin labelling and the recent Russian ban on Canadian pork and it’s little wonder Canadian officials have virtually taken up residence at the World Trade Organization.

Getting beef back into South Korea has been more difficult than herding cats. The U.S. finally regained entry last year but that nearly brought down the Korean government. The prolonged and often violent street protests against U.S. beef have definitely delayed Korea’s agreeing to accept Canadian beef again. With Canada’s BSE status and numerous BSE safeguards in place, Canada can justifiably say its beef is safe. But politics continue to trump science so Korea keeps dragging its feet. Canada has lodged a complaint with the WTO and continued in May to air its grievances with Korea. All that country would concede was that it plans to hold additional talks.

The WTO in 1998 ruled against the European Union’s 1986 ban on Canadian and U.S. beef produced with implants. But the EU for years has made it clear it will not rescind the ban. It would rather pay additional duties on certain exports to both countries than concede. The WTO ruling allowed the U.S to impose US $117 million of tariffs. The U.S. then began the process of persuading the EU to let more U.S. beef into the EU without any duty.

Little progress occurred until the Bush Administration in its last days threatened “carousel” tariffs, i. e., to rotate the tariffs among other goods. This got the EU’s attention because it would have to defend its hormone ban to even more European exporters. But the Obama Administration came to the EU’s rescue. It needs EU support for its enlarged efforts in Afghanistan and its attempts to tackle the global economic crisis, among other matters. So beef became a political pawn. The Administration has agreed to withdraw the threat of carousel tariffs. In return, the EU has agreed to more than double the amount of beef the U.S. can send tariff-free. This led some in early May to talk of a settlement to the long-running dispute.

Nothing could be further from the facts. The expanded access applies only to non-implanted beef — the hormone ban remains rigidly in place. Second, the EU is insisting that beef comes only from carcasses not subjected to carcasses washes. Every packer in the U.S. uses a number of washes to reduce the possibility of pathogen contamination. How ironic that the EU so distrusts implants but is prepared to accept beef that might contain deadly bugs. Few packers will be bothered to attempt to get EU plant approval. So the expansion of the tariff-free quota is largely an empty gesture.

If only the same amount of energy had been put into getting more beef into Japan. It’s also regrettable that the U.S. abandoned science in the pursuit of market access in relation to the hormone ban and the use of carcass washes. This has set an unfortunate precedent for attempting to persuade Japan to lift its age restriction on U.S. beef imports, or attempting to persuade Korea and other countries to accept bone-in U.S. beef. It is increasingly clear that market access comes at a price.

Cattle Buyers Weekly covers the North American meat and livestock industry. For subscription information, contact Steve Kay at P. O. Box 2533, Petaluma, CA 94953, or at 707-765-1725, or go towww.cattlebuyersweekly.com

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A North American view of the meat industry. Steve Kay is publisher and editor of Cattle Buyers Weekly.

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