NCBA TO SEEK ALTERNATIVE SOLUTIONS TO INTERNATIONAL TRADE DISPUTES

Meeting via conference call, dues members of the NCBA Executive Committee today voted 9 to 5 to not support the Ranchers-Cattlemen Action Legal Foundation (R-CALF) petition requesting the U.S. government file a countervailing duty case against Canada. Because no motions were made, the Executive Committee did not vote on R-CALF petitions requesting that the U.S. government file anti-dumping cases against Mexico and Canada.

"Fair trade is vitally important to the future of the U.S. beef industry and its importance becomes greater during the poor market conditions we’re enduring now," said NCBA president-elect George Swan.

"Trade issues between our neighbors to the north and south, however, must be addressed in a fair, aggressive, expedient and efficient manner. We feel ongoing efforts to resolve these issues bilaterally, especially when the threat of legislative actions are forcing the Canadian and Mexican governments to respond, must be fully exhausted before employing multi-year, multi-million dollar lawsuits," said the Rogerson, Idaho, cattleman.

Although it is unusual for a matter of this nature to be considered outside its normal policy-development process, NCBA’s International Markets Committee met by conference call October 9 to consider the R-CALF petitions, but voted 69 to 17 against recommending NCBA support.

Committee chairman Dana Hauck, Delphos, Kan., outlined several factors that led the International Markets Committee to its decision:

• To win, the petitioning U.S. industry must show (1) that the subject imports are being either dumped or unfairly subsidized; and (2) that the imports are causing or threatening the domestic industry with material injury. The remedy provided by both laws is the imposition of an offsetting duty on the import at the time it is brought into the United States, but provides no direct relief to U.S. cattlemen.
• Devaluation of the Canadian dollar has reduced the price of Canadian cattle in terms of U.S. dollars. The Canadian dollar has devalued from approximately $.82/US in 1989, when the U.S./Canadian Trade Agreement was signed to approximately $.67/US.
• NCBA asked outside legal experts to examine potential benefits, costs and risks associated with the R-CALF request. Filing antidumping and countervailing duty cases would likely cost more than $1 million each, take 7 to 14 months to resolve and stand less than a one in two chance of success.

"We did not see merit in the R-CALF request at this time when the risks and the costs are so high," Hauck said. "We feel aggressive efforts already under way are the best alternatives to resolve the issues and to maintain good relations with important trading partners."

Hauck cited implementation of revised rules on October 1 to allow U.S. cattlemen to ship more feeder cattle into Canadian feedlots. The rules waive specific animal testing requirements in order to make cross-border shipment of live cattle more accessible to U.S. cattle producers.

"This is a perfect example of how diligence and hard negotiations can result in fair trading practices," he said. "This success was the result of coordinated efforts of state and national industry representatives, Montana and Washington state officials, U.S. government officials and Canadian officials."

Swan noted that Mexico has been a long-term supplier of feeder cattle to U.S. cattlemen and is now our second-largest and fastest growing export market for U.S. beef.

"We co-sponsored with the Mexican cattlemen a symposium for retailers and distributors to increase demand for beef in Mexico and worked with USDA to provide GSM-103 credit guarantees for Mexican cattlemen to purchase U.S. breeding cattle following severe drought. NCBA will continue to work with the Mexican cattle industry and government officials to assure that this vital two-way trade continues.

"We have made significant strides in trade issues with Canada and Mexico," Swan said. "We prevented cattle from Australia entering the U.S. through Mexico, beef exports have increased to Mexico, and we made progress in getting country-of-origin labeling on beef imports considered by Congress."

Swan said NCBA priorities now include:

• Work with USDA and Congress to determine possible options on rescinding U.S. quality grades on Canadian imports and implementing country-of-origin meat labeling on imports.
• Work to assure that Mexican feeder cattle meet U.S. animal health standards.
• Expand the movement of more cattle north to Canada.
• Ensure that the Canadian Wheat Board practices do not provide cost of grain advantage to the Canadian livestock industry.
• Host a trade team from Mexico to increase understanding of U.S. feedlots, packing plants and border inspection processes.
• Expedite rulemaking that will allow Canada to recognize Disease Free Regions in the U.S. that can ship cattle to Canada.
• Ensure harmonization on animal drug issues.