Question

[topper]

I was just wondering if anybody could tell me why the border can be opened to boxed beef with a stroke of the pen but in order for it to open to live cattle there has to be this prolonged rule making period? Somehow this doesn't seem right to me so I was wondering if any of the agri-ville crew knows the answer.

[rusty1]

The answer is quite simple. It's called trade sanctions, power controll, getting even, etc. Both NAFTA and WTO regulations absolutly prevent the closure to borders with no scientific evidence.
Howeven Canada has maintained closed borders to certain countries like Japan (even thhough we import little more and a wheel barrel full of Japaneze meat)an d others. No I'm afrain it all has to to with the balance of trade, and when we are afraid to poke a sleeping bull dog we wait.
Also to remind you of our beloved PM who shot ourselves in the foot with his irrestonsible remarks.

[rsomer]

It seems that one of the reasons we were allowed to export boneless cuts to the U.S. under permit was so that American hunters could bring back the deer they had shot in Canada into their country.

The Canadian boneless cuts that were allowed to be shipped into the U.S. under permit were considered very low risk as there were no bones which could potentially carry BSE prions. Live cattle were considered to be higher risk than the boneless cuts even though BSE had never been detected in young animals. To allow live cattle into the U.S. required a change to the U.S. regulations which then required public comment through the rulemaking process. I have pasted some questions and answers that I believe will help answer your question.

http://www.usda.gov/news/releases/2003/08/qa0281.htm

Q. What is the legal authority for the permitting process? Is there a need for rulemaking?
A. The Department has regulatory authority to issue permits allowing ruminants and ruminant products to enter the United States from Canada, under prescribed conditions, if doing so will not endanger U.S. livestock or poultry (9 C.F.R. § 93.401(a)).
If the Department decides to make changes to the underlying regulation, we will follow the regulatory process, including the opportunity for public comment. Before we take action, the Department will ensure that there is a strong scientific justification for doing so. All actions taken by the Department will be based on sound science.

Q. How does the permitting process change the risk of BSE occurring in the United States?
A. Our experts have thoroughly reviewed the scientific evidence and determined that the risk to public health is extremely low. We feel that the Canadian system of beef production and processing has been and continues to be based on a strong foundation of preventive measures to keep BSE from spreading. Canada has also taken numerous actions, including an effective feed ban in the 1990's, an aggressive surveillance program, and a heightened awareness at ante-mortem inspection for central nervous system disorders to minimize the risk of BSE.
In addition, the U. S. has had a strong system of preventive measures in place since 1997. We have had a feed ban in place since 1997 that, according to a Harvard Risk Assessment, has been the U.S.’s most effective means of BSE prevention. The U.S. has continued to expand the BSE surveillance program as well as strengthen efforts on feed ban compliance. We are currently evaluating all of our safeguards to ensure that they reflect the most recent science.
Other countries such as Japan that have found recurring cases of BSE did not effective preventive programs in place until after a case of BSE was found.

Q. Can you explain the justification for allowing such products as boneless beef in from Canada?
A. The USDA Transmissable Spongiform Encephalopathy (TSE) Working Group continues to reassess the information that they had been working on for some time prior to the Canadian case regarding the identification of products that present low risk for carrying the BSE-infectious agent. Based on peer-reviewed research, muscle cuts do not appear to transmit infection. Whole muscle boneless cuts of beef from countries in the same risk category as Canada do not contain the types of nervous system tissues that could carry the BSE-infectious agent.

[rusty1]

Topper don't let rsomer "baffel you with 2/3rds BSE "BS". Here's a classic example of beauicrates hodwinking us with retoric. The facts are there for the open minded and truly seeking. Here's 2 quotes from a couple of folk in the know that dare to be counted and dare to be outside the establishment. I might add that our beef politicians hired a American legal firm in Washington to fight our battles there. That ota really work well.

Please read through the following.

Risk Issue Chronicles, No. 5:
BSE Risk in Canada: Finally, the Penny Drops
July 22, 2003
©William Leiss 2003


“One stinking cow,…”
Alberta Premier Ralph Klein, 14 July 2003

Here I contend that Canadian politicians have been misleading the public about the issues surrounding Japan’s policy on continuing to refuse imports of Canadian beef. We have been told that Japan’s policy is contemptuous of “science” and is unfair trade protectionism, and that the Japanese position is manifestly unreasonable. These are all, I contend, blatantly unfair claims. Our politicians and media commentators have not presented the issues fairly to us.

Canada’s longstanding policy is to ban imports of beef from all countries “not known to be free of BSE.” This ban includes some countries which have reported only a single case of the disease in their herds a full two years ago.

The bottom line is this: Japan’s refusal to admit Canadian beef, following the discovery of a case of BSE in our country, is entirely consistent with the policy that Canada imposes on all other countries for its own beef imports. Thus our ridiculous complaints against Japan are simply a case of rank hypocrisy.


GOTTLIEB & PEARSON
International Trade and Customs Lawyers
2020 UNIVERSITY STREET, SUITE 1600, MONTREAL, QUEBEC, CANADA H3A 2A5

Re: BSE Trade Options
Our File No.: 9959-2
Dear Ms Holm:
This is to follow up on our recent discussions about international trade law implications
of actions by Canada's trade partners following the discovery of an isolated case of
bovine spongiform encephalopathy (BSE) in Alberta in May 2003. In particular, you
were concerned about the U.S. action in closing its borders to imports of Canadian beef
and beef products.
As I indicated during our discussion there is a strong prima facie case to be made that the
U.S. ban is a violation of Canada's rights under both the NAFTA and the WTO. Under
both NAFTA Chapter 7 provisions on agriculture and the WTO Agreement on Sanitary
and Phytosanitary Measures (SPS Agreement), such an import prohibition (bar, ban or
restriction) must be based on a scientific risk assessment and must minimize anynegative trade effects if implemented.
Based on publicly available material, including statements by the U.S. Secretary of
Agriculture that the Canadian beef does not present any risk to consumers, and based
on Canada's actions to address the matter, in the context of internationally accepted
practices, Canada and/or Canadian suppliers of beef have a strong prima facie case.
Any U.S. rationale based on concerns that Canada's imports would harm access to
Japan (and other markets) for U.S.-origin beef is not a valid defense under either the
NAFTA provisions or the SPS Agreement.
In the alternative, Canada should consider closing its borders to U.S. and (other)
imports in order to protect its new, more stringent BSE-related rules introduced this
summer. In the current context, Canada should not be in the innocuous position of
having higher BSE-related standards than the U.S. while not having reciprocal access to
its market. The NAFTA does permit parties to introduce higher standards than those of
its partners or international standards if they are scientifically justified.
While the domestic industry can petition the Canadian International Trade Tribunal to
recommend that the government take safeguard action, this and any NAFTA/WTO
challenge of U.S. (and other) import bans would be at the discretion of the federal
government.
Private parties do have a "right of action" under investor state provisions of NAFTA
Chapter 11. In the current BSE-related context, a Canadian entity with an investment in
the U.S. (or Mexico) whose investment is expropriated as a result of the U.S. ban has the
right to seek compensation equal to the fair market value of the investment.
Chapter 11 arbitration panels have determined that access to another NAFTA party's
market can be considered property interest. However, the case could not be based on
loss of market access from Canada, but on the lasting or long-term removal of the
ability of property owners to make use of those rights in the U.S. or Mexico.
As the attached chart demonstrates, there have been a number of these cases and the
awards can be significant.
I hope that the above is of some assistance. While this reflects our views with respect to
the trade law implications of the current BSE-related matter, this should not be
considered a legal opinion. If you wish us to prepare such an opinion or address any of
the above issues in more details, please let me know.
Yours truly,
GOTTLIEB & PEARSON
Per: Michael G. Woods
MGW/lapAtt.
GOTTLIEB & PEARSON

[cowman]

The Japanese have laid it out very clearly: test every animal. Just like they do.
In the Oct. 23 issue of the Western Producer Ken Rosaasen(ag economics UofS) says "Now, five months later, there has been no definite plan outlined to increase the Canadian testing rate for BSE" What kind of garbage is this? Is this how our country reacts? A lot of talk and no action? Smoke and mirrors and BS?
Why is it that the elk and deer industry test every animal slaughtered but the beef industry can't even increase testing? Do you ever wonder if the patients are running the asylum?

[cowman]

Oh, one other thing. Rusty 1, what were those irresponsible remarks Chretien made? Was it the one about how if the Americans weren't always interfering in other nations economys they might not be so universally hated? Or the one where he questioned whether we should be slaughtering Iraq until we knew if they had weapons of mass destruction?
Seems to me old Jean might have just been right on those two?

[rsomer]

cowman: I also noted Professor Rosaasen's comments in the Producer. I think Ken Rosaasen has been checking out your posts in Agriville because he has restated all the points you have made concerning more testing of BSE. Great minds think alike. :--) He based his opinion that more testing would benefit the industry on his first point that the integrated North American market for beef was a myth. No one can argue the point that there wasn’t a North American beef market after May 20. But if there isn’t a North American market aren’t Canadian producers left holding the bag? Our packing industry is owned by Americans, far too many feeder calves are owned by the packers, we don’t have made in Canada price discovery or a Canadian futures commodity market for beef. If there is not a integrated North American market for beef I would suggest that there is not a viable Canadian beef industry anymore and that there has not been a viable Canadian beef industry since the 1970s since beef trade switched from east/west to north/south, certainly not after Canada Packers and Lakeside were replaced by Cargill and IBP/Tyson Foods. The integrated North American beef market, which would be more correctly called the integrated NAFTA beef market collapsed on May 20 creating a crisis for the Canadian beef producer. Really, the single case of BSE created a crisis for NAFTA. Do we give up on harmonizing our food safety and quality standards with our NAFTA partners or do we go our own way and try to create an independent Canadian beef industry with independent standards, more like the EU and Japan. Given that NAFTA is our only viable market for beef, and non NAFTA exports are just fluff, the choice to continue working to harmonize our beef industry with our NAFTA partners seems clear. The focus should not be on creating independent testing standards for a Canadian industry but instead working to make sure that a NAFTA beef industry can be viable.

[cowman]

Well, thank you rsomer for not completing the quote!! Very diplomatic.
Everything you say is true about the North American market. I guess what I am trying to say is the party is over and we need to get away from the Americans!
And I know that isn't a pretty picture.
It means about one in every four of us needs to go out of business. Hey, and maybe that means I'll be one of the four.
We've had our little dance with the devil and it was fairly good while it lasted!
I have to ask you do you like being pushed around by the American elephant? Do you like having their industry leaders telling us how we must run things? Personally I'm sick of Americans telling us we are some sort of retard cousins and we need to get in step with them. They have the money therefore they call the tune?
What is that? Are we their slaves? Well maybe not just yet! Tell them to take their market and stick it where the sun don't shine!

[ValueChainFX]

The capability of testing every animal is there! The interest to test every animal is there! The people with the technology, equipment and recognized know how are there! It is simply a matter of the political will and producer will to make it happen.

I have been very busy in the last while and have not been in agri-ville as often as I was before, but can tell you anyone that feels the only market in this world of ours is south needs to open an atlas! There are protein markets all over this globe and many buyers tired of dealing with the Cargills and IBP's!

Quote who you may but the bottom line here is we are in a business that depends on you the producer and a buyer at the end of the line! When the BSE thing hit us the producer had a 70% drop in their prices while the rest of the agri-business had a 17% price drop .... does this mean anything? When they say cut out the middle man we need a big knife to do it! If you are still listening to the experts ... give your head a shake, we need hands on expertise to take us out of this and move into the future. At the end of an article I was reading the other day this little ditum struck me as so true! I quote this for you now

"For advice we can listen, to the experts or the cults, But it's up to the individual, to live with the results."

End quote

For all those sitting on the fence I hope you can enjoy the view. The rest of us are going to make something happen in spite of those that say it can't be done!

[rsomer]

cowman: I believe you have changed my thinking on this. It is becoming increasingly difficult to defend a North American or NAFTA market for beef. If you are saying Canadian beef producers should concentrate on the domestic beef market even though it means a reduction in our beef herd rather than depend on a North American market which is a myth, I would say you may be right. Here is what I have been thinking.

When Canada gave up the Crow Benefit or WGTS in order to increase value added activity on the prairies we replaced grain exports with beef exports. In fact what happened was we replaced exports that could be easily stored in the case of a trade disruption with a perishable product. As a result we became very vulnerable to any and every political whim of our trading partners. In contrast the U.S. produces roughly the amount of beef they can consume domestically while continuing to subsidize the export of grains which can be easily stored.

And what is even worse we are the worlds second largest exporter of live cattle, behind France. But Canada is not one of the world’s nuclear powers like France and the United States. As a nation we just do not have the international political clout to be exporting huge volumes of a perishable product beyond our borders. We would always be vulnerable to a trade disruption if not from the United States than from Japan or Korea or whichever foreign country decided they wanted to pick on Canada in order to make a political point. Of the worlds major beef exporting countries, only Canada and Australia export significantly more beef than can be consumed domestically. But Australia has sufficient packing capacity to slaughter all of their production as well as the ability to store their live cattle on grass if necessary. The Canadian industry, in contrast, was completely dependent on the North American market which as Ken Rosaasen pointed out, was a myth. And if the North American beef market is a myth then NAFTA is a myth. With the benefit of 20/20 hindsight, we obviously cannot have a viable beef industry based on large volumes of exports that are well in excess of our domestic needs.

If it is true that we cannot depend on a North American market and that NAFTA is a myth then the Canadian industry certainly needs to reshape itself. Canada allowed U.S. ownership of our packing industry partly as a means of guaranteeing access for our product to the U.S. market. It didn’t work, the U.S. was still able to target live cattle which were owned by independent and vulnerable small producers and bring the Canadian industry to its knees in order to make a political point. Without sufficient "made and owned in Canada" packing capacity to slaughter all of our beef production we cannot choose exports to market our excess production. And targeting our industry towards exports without having freezer storage capacity for one years exports in reserve is sure to lead to strategic failure for our industry in the long term.

I am thinking where was the Harvard Risk Assessment for Canada’s beef industry? And I guess where my head is now I am thinking NAFTA doesn’t work and won’t ever work. NAFTA can’t ever work as long as there are politicians. I am now thinking that harmonizing our industry with the U.S. industry is naive and will lead to certain strategic failure. Furthermore I am thinking exporting 50% of our production of a perishable commodity like beef is madness. I do think that BSE testing by itself only offers solutions if we produce solely for our domestic needs. If we wish to export we also need sufficient packer capacity within our borders to slaughter all our production and storage capacity for one years exports. I think you and Professor Rosaasen are right, that NAFTA is a myth.

Like ValuecChainFx I think the time to sit on the fence has passed and that changes need to be made, but before we look to exports we need to make sure we have a viable domestic industry.

[pandiana]

I feel very comfortable with the logic you have used to make your conclusions, rsomer. I too would like to re-examine benefits under NAFTA as I cannot see any real benefits for primary producers and resource industry. Manufacturing maybe.

With our dollar reaching new heights our troubles are compounding with even more loses projected for agriculture.

But, on a realistic level, what can we do? As cattle producers (or grain, for that matter) we all seek the highest return on our production. Are we willing to voluntarily support a local industry if we must take less when we are already on the brink of disaster?

Yes, I think we need a made in Canada industry!

Yes, I believe we may have to test all our cull cows and bulls in order to get them sold at a realistic price!

Now lets try and figure out how to do this. When do we start lobbying!

[cowman]

rsomer: How true about the crow rate! That was the death knell for the grain industry. The excuse was the crow was not legal under the international rules...never mind that the Americans and Europeans were subsidizing their farmers at a much higher rate!
So we all sowed down the grain land and bought cows. Or mortgaged the farm and built a pig barn! The days of export grain were really over. And we did all right for awhile. Never mind that land that could have grown a good crop of grain was now being used like the garbage grass lands. And so we end up where we are today with a product no one will take?
Who is to blame? Is it the farmer who got tired of being ripped off on his grain and saw an opportunity to go into livestock and maybe survive? Or is it an inept government who could only see that they could cheap out and get out of their obligations? Why did they bow down to the Europeans and the Americans? Is there any politician in Canada with a backbone? Who will stand up to this insane Global Market thing? In case they didn't know it they are supposed to stand up for Canadians not sell them down the river!

[ValueChainFX]

We are already lobbying the government and have been for two years to get off their tush and work more for the producers! The government is not willing to do what they have been put in place to do, (In my opinion) because they have their little expert bureaucrats telling them information that is just not true!

Although we have been forced to go through the cumbersome process of dealing with these less than cooperative government folks, we have been working on our own strategies that among other things are building relationships with people in the countries we want to export to. These people have the ability to lobby their own government to assist them in bringing in Canadian product.

Also we have a strong producer movement from across Canada at the moment building momentum for a national grass roots group. The government seems to be stepping back a little as our numbers grow.

I guess we keep moving forward one step at a time and leave the doors open so we don't tick anyone off (at least publicly) and we will reach our goal sooner rather than later!

[cowman]

Our federal government is not going to do much for sure. I hate to rip them completely because quite frankly they do some good in spite of themselves! I do believe the Canadian inspection agency is probably one of the better departments in all of government! At least they have the guts to stand up to the Americans and CCA over the health of our cow herd(the blue tongue thing). And I have to give VanClief credit for backing the vets up! And it would have been a lot easier to roll over and let the Americans have their way.
But basically Value Chain, you are right. We need to solve this problem, not the government. The quote about the experts and the cults is right on! Never put your faith in an "expert", if they are so expert why aren't they doing it???
It's pretty easy to give advice when you aren't paying the bills! And the bottom line is you and I must pay the bills!

[ValueChainFX]

cowman the article that quote came from basically said the same thing! The most desired experts are those that are actually working hands on!

I have been called a hands on expert in meetings with government by the government expert, and had those same people say in other meetings that because I am working hands on they required their consultants to verify or redo some reports (they actually gave us a list) When we talked to one of their experts we were told the costs was $1400.00 a day to verify or review our work!

>>>>> I'm in the wrong business!!!! <<

Or the right business doing it the wrong way!! Go figure!