Democrats Vow to Reopen NAFTA

[farmers_son]

Clinton and Obama vow to reopen NAFTA
Both Democrats make commitment in final debate before next week's crucial primaries

February 27, 2008

WASHINGTON -- Both Barack Obama and Hillary Clinton would withdraw the United States from the North American free trade agreement with six months notice after becoming president, unless the deal were completely renegotiated.

The Democrats made the commitment yesterday at the final debate before next Tuesday's Texas and Ohio primaries.
Both candidates have been highly critical of the trade deal, saying it has cost thousands of Americans their jobs.

Asked whether she would inform Canada and Mexico that the U.S. government was activating the six-month opt-out clause under which any country can leave the deal, Ms. Clinton replied: "I've said that I will renegotiate NAFTA, so obviously we'd have to say to Canada and Mexico that that's exactly what we're going to do; ... we will opt out of NAFTA unless we renegotiate it."
Mr. Obama agreed with Ms. Clinton's stand. "I will make sure that we renegotiate in the same way that Senator Clinton talked about," he said. "I think, actually, Senator Clinton's answer on this one is right. I think we should use the hammer of a potential opt-out as leverage.

[per]

That leaves about a year and a half to convince them otherwise farmers_son. Either that or distinguish our product as different and unique and separate ourselves from our addiction to the USA. How many roadblocks do the Americans need to throw up before you get the hint?

[farmers_son]

It seems to me that you are talking about two different things…beef and cattle. The BIG C people several years ago correctly pointed out that we market cattle not beef. I believe I am correct in saying that our only practical export market for live cattle would be the United States. Beef is another matter but as long as I get paid for live cattle and as long as those live cattle are priced in the United States minus a basis then I am very interested in the U.S. market.

I am sure you recall the bad old days following BSE when live cattle access to the United States was blocked. Our local packers were not passing along the exorbitant profits they were making exporting our Canadian beef at world prices to the United States while only paying the Canadian live cattle producer just enough to keep the Government of Canada from looking into their books. There is no reason to believe it is any different today. Our small domestic marketplace with only two major packers does not ensure fair pricing of live cattle within our borders. We can differentiate the Canadian beef product, I hesitate to say our beef product, until the cows come home but without competition for live cattle we, as live cattle producers, will not realize any benefits from those domestic efforts. Without competition the marketplace fails.

If you want to talk addiction, President Bush has already declared the U.S. is addicted to energy. And Canada is their number one pusher. That certainly puts Canada in an enviable position when it comes to trade with the U.S. and our continued live cattle access to their markets. Indeed that is exactly why our dollar is so strong right now, the world recognizes the strength of our economy as it recognizes the weakness of the U.S. economy. It is an election year in the U.S. right now but no matter who ends up President common sense will need to prevail at some point. It is unquestionably in the United States’ interest to maintain very strong trade ties with Canada and Mexico, both important and even crucial suppliers of energy, to provide the U.S. with its next daily energy fix. Live cattle trade with the U.S. is important to both Canada and Mexico and live cattle trade will continue as long as we have oil and gas to lubricate the trade wheels.

Bottom line, the U.S. needs our cattle and beef just like they need our oil and gas.

[rkaiser]

Your bottom line is Bull Shit, as is most of your post.

The USA will supply it's Oil and Gas and protein needs from the cheapest supplier they can find.

That cheapest supplier just so happens to be our gutless Canadian comrades.......

[grassfarmer]

Farmers_son, I think the thing you misunderstand about BIG-C was that although they pointed out "that we market cattle not beef" they intended to change that hence producer owned packing plants etc. Remaining tied to a US live cattle market minus basis is a sorry excuse for a future at best. Unfortunately it seems the ABP/CCA are only interested in the U.S. market.
You highlight the profit taking antics of the packers enhanced by the opportunity offered by BSE - why then does ABP consistently refuse to support producer resolutions to tackle the problem?
Someone suggested to me last week that what should have happened was ABP and/or CCA should have launched a class action lawsuit against the packer cartel, got them in court, their books opened and punitive action taken against them if they were proven to have un-fairy profited from price fixing or anti-competitive activities. The legal costs would likely have been around $1 million. ABP alone has a $13 million budget so we could have undertaken this.
How many million have we @#%@&^ away fighting R-CALF etc to get the border open? And that was money wasted - the border opened the day the packers wanted it to open and no amount of posturing by R-CALF or Cdn groups influenced that one bit.
As you say " Without competition the marketplace fails." why then has ABP worked hard, and spend checkoff dollars, to maintain exactly that status quo - opposing at every opportunity plans by producers to own their own processing capacity to increase competition within the marketplace?

[per]

That is what I do not understand farmers_son, why you do not care past live cattle and what is happening farther down the value chain. Many producers take their product all the way to the box and sell beef. Makes me wonder why the ABP changed their name from cattle to beef. Someone back then must have understood that cattle and beef are somehow related. No matter how far down the value chain you are interested in traveling what happens at the end still Matters. America is our closest market and especially those only interested in live cattle trade would be interested in it. It is not the only market however and some of the other possibilities must be explored. Even if that means we shift our attention from live trade to a box. I will not even mention the range of labels we could stick to the outside of the box if we were able to think outside of the box. Our American friends do not seem to want us in their sandbox. It is frustrating to continue to have to stretch those who are so stuck in status quo. The Americans are addicted to beef and gas just as we are. They will procure it when and where they get the best buy. If you want to be the lowest price seller, it is your preferred market. I want better for my family than to be the bottom seller. You can bet that as in the past water and oil will not be used as a lever in negotiating beef in any trade talks. I’m sure you are aware of the growing South American cattle herd. The US will source the cheapest beef. Up until now we had been the bride but Argentina and Brazil were the bridesmaids. That could change very soon. Why throw that in there? To point out that we had better come up with an alternate to total US dependency.

Bottom Line-

-Beef is every Cattleman’s business

-Live cattle trade to the US after BSE hasn’t been much help to the bottom line.

-The one area of consistent profitability on my ranch is at the very end of the value chain. (in the box)

-If the US can find it’s commodities cheaper elsewhere, they will.

per

[kato]

I'm surprised they would bother renegotiating NAFTA. They only adhere to the parts they like now.

MCOOL is in contradiction to NAFTA. That hasn't stopped anyone from ignoring the fact that they signed the treaty.

What's the point of having trade agreements where you can pick and choose which parts you are going to live up to?

[Superbad]

Canada's ferocious NAFTA growl

One of Thursday's spiciest Democratic campaign
controversies has been the report out of Canada,
citing unnamed sources, that an Obama campaign
official told the Canadian government not to worry
about the senator from Illinois' anti-NAFTA
"rhetoric." It wasn't "serious," he reputedly said.

The Obama campaign and the Canadian
government are both vigorously denying that any
such conversation took place. How the World Works
is inclined to believe them if only because it defies
comprehension that a campaign as well run as
Obama's would do anything so stupid. (Dirty trick,
anyone?) Understandably, the Clinton campaign
was delighted to hear the news, even though there
is a paucity of evidence that Hillary Clinton's
commitment to renegotiating NAFTA is any more
sincere than Obama's. But that didn't stop
machinist union president and Clinton surrogate
Tom Buffenbarger instantly proclaiming that
"working families cannot trust a candidate who
telegraphs his real position to a foreign
government and then dissembles in a nationally
televised debate."

Buffenbarger, avid campaign followers will recall, is
the fellow who called Obama "Janus, the two-faced
Roman god of ancient times" and dismissed his
supporters as "latte-drinking, Prius-driving,
Birkenstock-wearing, trust fund babies."

But all this focus on whether the Obama campaign
actually fumbled the NAFTA ball in such a
spectacular fashion misses the real point, which is
the opportunity for a refresher course in U.S.-
Canadian trade relations.

Question: Who is the largest supplier of energy
resources to the United States?

Answer: Canada.

Canada exports more crude oil to the United States
than any other nation, including Saudi Arabia. All of
that oil, along with a gusher of natural gas, comes
free of any kind of export controls or tariffs,
courtesy of NAFTA. In fact, the United States
consumes almost 100 percent of Canada's energy
exports.

Which undoubtedly puts Canada in the driver's seat
should a new president of the United States decide
he or she wanted to "renegotiate" NAFTA.

David Emerson, Canada's trade minister, took some
pains to remind Hillary Clinton and Barack Obama
of U.S. dependence on foreign (Canadian) oil on
Thursday, according to a Globe and Mail story a
reader kindly forwarded to me.

Americans' privileged access to Canada's massive
oil and gas reserves could be disrupted if
Washington cancels the NAFTA accord as
Democratic presidential candidates threaten,
Canadian Trade Minister David Emerson warned
yesterday.

"There's no doubt if NAFTA were to be reopened we
would want to have our list of priorities," he said.

In other words, if you Yankees think you can wave a
magic wand and "renegotiate NAFTA" so as to be
more beneficial to Americans at the expense of
Canada's interests, think again, because we'd be
happy to close off the oil spigot and sell our crude,
to, oh, I don't know, China.

Don't mess with Canada!

-- Andrew Leonard

[DiamondSCattleCo]

I really wish I could believe that Eastern politicians would even remotely back cutting off the US's supply of crude and energy if they decide to "renegotiate" NAFTA. Over the past few decades, Canadian politicians have shown a decided lack of balls when it comes to negotiating deals with the US, and I suspect we'll see the same trend continue, especially with the American wannabe in power.

[jensend]

if our politicians did try to tie oil and gas to beef the petroleum industry in canada would be the biggest objectors. farmers_son totally misreads the possibility of this as well as any goodwill from americans. he's living in a fools' paradise and prospering!

[farmers_son]

What I said was "It is unquestionably in the United States’ interest to maintain very strong trade ties with Canada and Mexico, both important and even crucial suppliers of energy, to provide the U.S. with its next daily energy fix. Live cattle trade with the U.S. is important to both Canada and Mexico and live cattle trade will continue as long as we have oil and gas to lubricate the trade wheels."

The U.S. does not buy our oil and gas or live cattle and beef as a gesture of good will. They are looking after U.S. interests. When the U.S. border was closed to Canadian live cattle imports there was genuine economic hurt in regions of the U.S. that needed Canadian live cattle to maintain the viability of U.S. packing plants.

The U.S. cattle industry would be predicted to shrink just like the Canadian cattle industry is predicted to shrink due to pressures of U.S. ethanol policy. The U.S. really does need our beef and live cattle and that need will increase in the coming years. Canada is ideally positioned geographically, politically and economically to meet that need.

[per]

So I guess we just sit around and do nothing because all we have to do is wait and the Americans will solve all of our market issues right after we threaten to shut off the gas tap.

[perfecho]

Often the term is "Let's shut off the taps".....but I don't think we own the taps anymore.... or our steel mills....or our packing plants....and the list goes on.

[farmers_son]

No one is saying we should do nothing. What I am saying is the U.S. is an important market, the worlds number one importer of beef and live cattle, and we are ideally positioned to serve that market.

Certainly part of Canada's advantage selling live cattle and beef to the U.S. is the NAFTA agreement. If the U.S. decides to renegotiate the NAFTA agreement it does so in light of a much greater need for Canadian energy in 2008 than when the CUSTA agreement was negotiated in 1989.

See Impact of CUSTA/NAFTA: A Canadian Perspective – James Rude

http://www.farmfoundation.org/chicago/rude.pdf

Exports to US: Red meats - The major change in border measures was the elimination by bothcountries of their respect meat import laws on bilateral trade. It can be argued that the US meatimport law was seldom imposed and was more of a minor annoyance. Pre-CUSTA tariffs wereminor (2¢/lb. on beef with fresh and frozen pork free, with some escalation of tariffs onprocessed products). So the North American red meats market was already largely integrated prior to CUSTA. Other factors have affected the growth in Canadian exports, especially for beef. The elimination of WGTA reduced feed costs on the prairies, and since 1995 western Canadian beef slaughter has increased by 50%. As well, foreign direct investment and industry rationalization have left two large beef processors in Alberta. These companies, IBP and Cargill,have furthered North American beef integration with their investments

End of Paste.

I would add that if the U.S. renegotiates NAFTA the reason behind it will not be oil or gas or beef or jobs. It will be water.

[per]

Can't disagree with the water part farmers_son. You might note I mentioned that earlier. All I am after is a multi directional plan because so far plan A has been ineffective. That is what we are all proactively pursuing. An alternative to the status quo just in case it isn't going to work. Plan A plus plan B might even = C.