House Passes Trade Legislation

Working into the early morning hours, members of the House passed a final agreement on major trade legislation this weekend 215 to 212. A conference report was sent to the House late Friday night, July 26, and approved before dawn on Saturday morning. The legislation will likely be on the Senate floor this week, as senators are planning to vote on this bill before leaving for summer recess.

National Cattlemen’s Beef Association members and staff have been very involved in the advancement of this legislation.  It is the primary way to level the playing field around the world and successfully negotiate tariff reduction in Japan, Korea and other markets, reduce beef production subsidies and eliminate European Union beef export subsidies.

“Chairmen Baucus and Thomas, the president, Ambassador Zoellick and Secretary Evans are to be commended for their strong leadership and sense of compromise under the difficult election- year political climate” said Wythe Willey, NCBA president.  “Without their tireless work and the administration’s aggressive proposal to level the playing field for U.S. agriculture, this legislation would never have been adopted.” 

”It’s plain and simple, common sense,” explains Chuck Lambert, NCBA’s chief economist.  The future prosperity of the U.S. beef industry depends on our ability to sell abroad and that rests on giving the president this authority. For the past eight years, we have not had the ability to advance our international trade capacity and U.S. beef trade surpluses have declined. Today’s poor market conditions reflect this. There is a huge opportunity to increase demand for U.S. beef internationally, and as international demand for beef products rise, the prices paid to cattlemen will increase.”

Since the lapse of Trade Promotion Authority in 1994, the U.S. beef industry has been sidelined while other countries have brokered trade deals. While we have been delaying, other countries have been negotiating better access for their exports, according to Bush administration officials.

“We need to understand that trade is not instant gratification for cattlemen, but an intelligent, promising long-term market development solution for our industry. It’s easy to get caught up in only looking at imports and not looking at the total trade picture,” explains Jim Peterson, chairman, Joint International Markets Committee.  “In today’s economy, NCBA members understand the value of international trade and that we are not going to repeal past trade agreements  We are fully supplying U.S. consumers, and the major room for expanding beef sales is to the millions of emerging middle-class consumers abroad. This solution cannot be overlooked.”

U.S. beef exports have increased more than five-fold since the mid-1980s when the Japan Beef-Citrus agreement was negotiated.  Most of that increase can be attributed to markets that were opened or tariffs that were reduced through negotiations subject to Trade Promotion Authority-like negotiation authority.   The beef industry trade deficit is much less today than it was prior to the late 1980s.  Today we export nearly as much as we import and we have posted a trade surplus on a dollar basis every year since 1991 for beef and beef variety meats.

During 2001, U.S. beef exports declined to $3.4 billion from the 2000 record $3.6 billion as gains from the Uruguay round of World Trade Organization negotiations have been achieved and no new agreements have been negotiated.  U.S. beef exports are primarily sent to markets that have been opened through negotiations subject to Trade Promotion Authority.  The only way to remove additional  barriers to U.S. beef is to have U.S. negotiators fully empowered with TPA.

The conference report that passed the House will now be sent to the Senate, and Majority Leader Tom Daschle (S.D.) has indicated that he bring it to the floor for approval later this week.  NCBA members will continue grassroots efforts to encourage final passage in the Senate.

The conference report may be downloaded by going to the following web site and clicking on H.R. 3009:  <http://commdocs.house.gov/reports/107/index.html>   

Producer-directed and consumer-focused, the National Cattlemen’s Beef Association is the trade association of America’s cattle farmers and ranchers, and the marketing organization for the largest segment of the nation’s food and fiber industry.