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    Hoodwinkedagain

    THE HOLM TEAM Economics.
    R.R. #1, HP-8, Bowen Island, B.C., Canada V0N 1G0 Phone: (604) 947-2893
    Fax: (604) 947-2321
    email holm@farmertofarmer.ca
    December 9, 2003
    Deputy Premier Shirley McClellan
    Minister of Agriculture, Food and Rural Development
    Province of Alberta

    Dear Minister McClellan;
    RE; USING NAFTA TO OPEN THE US BORDER TO CANADIAN BEEF

    First of all, I apologise for my delay in getting back to you. Several weeks ago, when in Edmonton, I promised your secretary I would send you a briefing note on this issue upon my return to British Columbia.

    At the invitation of the Alberta Women’s Institute, I was in Alberta November 14 to 18 to speak to farmers in central and northern Alberta on the Farmers’ Resolution to Exempt Water from the NAFTA. At the end of each talk, I was asked to include a short presentation on the BSE/NAFTA issue (why Canada should be using NAFTA to open the border to Canadian beef).

    As an Agrologist and agricultural economist, I am concerned that continued closure of the US border to Canadian beef will have severely negative effects on industry structure and performance. . Given the extreme market concentration pre and post farm gate (feed, packers), continued closure of the US border to Canadian beef imperils the independence of our ranchers and feedlot operators – the backbone of Canada’s beef industry. And that’s not good for public policy, which has as its objective the economic, environmental and social sustainability of communities. Also a farm journalist, I have written several columns (attached) in an attempt to untangle the rhetoric.

    As international trade lawyer Michael Woods, (Gottlieb & Pearson) confirms in his letter of September 15, 20003 (attached), Canada has a “prima facie” case under NAFTA Chapter 20 to request a panel ruling against Washington’s continued closure of their market to Canadian beef.

    Further, NAFTA panel rulings (Pope and Talbot) suggest grounds for a Chapter 11 (investor-state) action by ranchers, feed lot operators or other industry participants who have suffered economic damage as a result of Washington’s expropriation of their market share to the benefit of American industry players.

    Strategic decision-making for agriculture depends on good information in the hands of farmers. A NAFTA Chapter 20 challenge is clearly one option, and it is of concern to many that this information is not getting out to ranchers. (One industry spokesman actually suggested they were “keeping a lid on it” because they were afraid that if Canada played the NAFTA card, the Americans would retaliate by implementing country of origin labeling for beef. This is dealing from a very weak position; Canada’s ranchers and Canada’s communities deserve a more enlightened and assertive defense.)

    Your October 24th response on behalf of Premier Klein to questions raised by David Zradicka concerning invoking NAFTA to defend Canada’s ranchers is similar in tone and content to that of BC Agriculture Minister John van Dongen (“…Canada’s cooperative approach is making progress and at this time offers greater chances of success…”), Agriculture Minister Lyle VanClief (“…It is a significant victory for Canada to have been able to re-open trade so quickly…”) and former Ontario Agriculture Minister Helen Johns (…we’re lucky – Washington could keep that border closed for years…”).

    (So similar, in fact, are the responses, one could be forgiven for assuming a spin campaign by Ottawa, which despite lip service to markets, continues to pick economic winners and losers based on politics, not policy; effective because few Canadians understand NAFTA well enough to object…)

    Before I left Edmonton, I spoke with your office to inquire whether there was an opportunity to provide you with a personal briefing on this issue. I believe that was the day the provincial legislature opened for its Fall Session, and you — predictably — were booked well into the evening! So with apologies for the delay in getting back to you, a belated response to the points raised in your letter of October 24th:


    McCLELLAN: “…at this time we do not see justification under international trade rules for retaliatory action against the US.
    RESPONSE:
    Calling for the convening of a NAFTA Chapter 20 Panel ruling can hardly be considered to be “retaliatory action against the US.” Chapter 20 is the agreed-upon arbitrator of conduct under the NAFTA and its panel rulings are a process both Canada and the US have jointly agreed to support.

    McCLELLAN: In closing its border to Canadian beef and cattle… the US has acted consistently with the guidelines of the World Organization for Animal Health Office of International Epizootics (OIE).”
    RESPONSE:
    Non-NAFTA countries may rely on OIE protocols to defend restrictions on Canadian beef. NAFTA countries may not; they are held to a “higher standard.”

    The OIE protocols were based on “precautionary principle”. Despite the protestations of Canada’s environmental community, NAFTA does not recognize “precautionary principle” but relies, instead on sound science and risk assessment.

    Scientific standards and risk assessment trump precautionary principle for NAFTA countries, and Canada was cleared by a panel of international experts last June 26th.
    (Several weeks later, US Secretary of State for Agriculture Ann Veneman publicly confirmed the safety of Canada’s beef supply.)

    McCLELLAN: “…In fact, in re-opening its border to imports of some Canadian beef, the US has departed from the standard treatment given to every other country with BSE and has given Canada what could be considered “special treatment.”
    RESPONSE:
    Canada is not “every other country” – we are a NAFTA country. NAFTA is about “special treatment.” And we’re not getting it.

    McCLELLAN: “…The US has gone further and has begun its internal rule-making process to consider opening its border to imports of live cattle from Canada. This process is expected to be complete in early 2004.”
    RESPONSE:
    Washington’s “internal rule making process” to “consider” live cattle imports requires gazetting, receiving public comment, etc. etc.

    The time line for this process is fully in the hands of Washington. As Minister Lyle VanClief notes in his letter of November 26th:
    “…The published rule has a 60-day comment period, during which interested parties can make submissions. Following their comment period, the USDA will need time to fully review the submissions. A final rule may then be issued in which the US could decide to reopen the border to live cattle and other Canadian products affected by the ban.”

    In an US election year, increasing market access for Canadian beef is a low priority. Under NAFTA Chapter 20, agricultural products enjoy a 215-day fast track. Had Ottawa called for a panel ruling on Canada day, the border would be open in a few weeks time.


    McCLELLAN: “…The US has also joined Canada and Mexico in asking the OIE to consider changing its guidelines so that countries with adequate animal surveillance and BSE control measures are not automatically shut out of global markets if BSE is discovered in their cattle herds.”
    RESPONSE:
    Canada’s trade rights are vested in NAFTA, not OIE protocols under WTO.

    While easing BSE restrictions for all countries may be a worthwhile pursuit, it is the LEAST expeditious route for Canada.

    Canada’s rights are vested in NAFTA and should be defended under NAFTA.

    McCLELLAN: “…Given the way in which the US has cooperated with Canada in resolving the BSE crisis, trade retaliation by Canada at this time is problematic in that it could end all progress in further opening the US market.”
    RESPONSE:
    Canada did not have a “BSE crisis” – we had one positive test.

    The US did not cooperate with Canada; Washington is actively transgressing their obligations under NAFTA.

    It’s not “trade retaliation” to defend the NAFTA rights of Canada’s ranchers to protect their market share from expropriation by Washington to the benefit of US industry players.

    Effective negotiating strategy means playing all our cards (including the 215 day NAFTA Chapter 20 one that says “while we continue to try to do this nicely, the clock is ticking…”) to provide essential leverage and control the time line.

    McCLELLAN: “…A win is never assured and the costs in terms of litigation, potential retaliation and reversal of progress in opening markets could be exceedingly heavy.”
    RESPONSE:
    Chapter 20 calls for a panel to rule on the black and white wording of the NAFTA; there is no lack of clarity on what the Americans should have done, nor on what they have done. If the American border was not fully reopened in response to a Chapter 20 ruling, Canada could retaliate with punitive tariffs against sensitive US sectors (e.g. prescription drugs…)

    McCLELLAN: “…I believe the diplomatic approach has the best potential for now to bring the needed results in further opening markets…”
    RESPONSE:
    Ottawa’s failure to defend Canada’s ranchers and feed lot operators in the face of the millions of dollars being lost daily as a result of Washington’s failure to open the US border to Canadian beef consistent with its NAFTA obligations may well be actionable by the provinces and the industry.

    Hopefully, when Canadian Prime Minister Paul Martin and US President George Bush meet at their upcoming international conference in January, the US border will be opened to Canadian beef as a show of détente. If not, Canada’s beef – and lamb and goat – ranchers and the communities that depend upon them could be twisting in the wind for a long time.

    This is not acceptable on a public policy level.

    I trust this information will be of assistance to you in your efforts to defend the interests of Canada’s farming sectors. Please feel free to call me if you would like to discuss further any of the above.

    Yours sincerely,
    Wendy R. Holm, P.Ag,

    c.c.: David Zradicka, Calgary, Alberta
    Mr. Harvey Cenaiko, MLA, Calgary-Buffalo
    The Honourable John VanDongen, BC Minister of Agriculture
    The Honourable Lyle Vanclief, Federal Minister of Agriculture
    The Honourable Ralph Klein, Premier of Alberta

    #2
    Rusty 1: This lady seems to have all the answers about the legality of NAFTA, however NAFTA seems to be sort of a joke! The Americans seem to do whatever they want no matter what NAFTA says. Consider the softwood lumber thing? The US has imposed a deal on Canada that apparently violates all the NAFTA rules?
    Watching the news last night, there was a story about how Canadian, German, and French companies would not be allowed to bid on jobs for the reconstruction of Iraq! Now mind you Canada is putting up $300 million for that reconstruction! Paul Martin commented that, that didn't seem very fair...and they had some idiot from the White House say Martin better watch himself and what he said!!!
    This White House idiot went on to add that if Canada got on board and sent some troops to Iraq(to get slaughtered instead of the American soldiers?) then they MIGHT reconsider letting Canadian companys bid!
    Is this fair? I think that Canada should just say fine, we'll keep our $300 million at home and spend it here...and Oh, by the way, clean up your own mess in Afganistan! Bring our soldiers home!

    Comment


      #3
      Personally I can't love liberals and hate them at the same time.
      Seems to me that 300 million is a bit of an insult. Is't Alberta spending way more than that on the cow program.
      The libeals probably figured that 300 million should get Bombadier an admitance to make billions. The US isn't fooled.

      Comment


        #4
        Come on Cowman - I'm surprised at you're mixed love's. $300 million is pocket change to the big power brokers. We spent (i've lost track) 1Bill. on gun control.

        However I agree, that the producer should not be paying for the National Id Program. The local bakery in off $10,000 in the month of October. (That's alot of dough) The car dealer fromwhich I buy my trucks and the town he lives in is down by 70% from last year. He dosn't know if he will survive. And you know the stories are many.

        I really don't understand why our CCA, ABP, and all the other producer groups across Canada don't just snub their noses at the CFIA (Feds) and tell them, "We are not participating in the National ID program, until the nation steps up to the plate."

        Comment


          #5
          Well Rusty it is pretty hard to defend our federal governments spending habits! They could teach most drunken sailors a thing or two on blowing the cash!
          Hey maybe they could take that $300 million and build us some packing houses out here in the west? Give IBP and Cargill some competition?
          Or maybe build some soup kitchens and homeless shelters? You know, maybe take care of our own before we go playing the big rich country helping out the oil rich Arabs? Maybe instead of rebuilding Iraqi infrastructure we could fix up some of our own roads?
          When they brought in the ID program they had a lot of producer meetings. In retrospect it was a good idea...believe it or not I actually supported it(with some reservations)! Carl Block was the guy spearheading it around here and he was a man of integrity who believed in what he was doing. He took a lot of heat and he wasn't getting anything out of it. When I asked him why did the cow/calf guy have to pick up the whole tab he agreed it was a problem and not very fair, but it was the only way it would get done, as the federal government refused to do their job of food safety! So we ended up paying for the tag and the labor or in other words once again we carried the ball for all the parasites that live off us!

          Comment


            #6
            As far as paying for the cattle ID system goes why shouldn't the producer pay the $3 or $5 or whatever. Lets face it if you can't afford that off a $6-$800 calf maybe you should be looking for another job. It's not a big cost as long as we are paying for the tag only. UK farmers have always paid for eartags and now it is being proposed that they should pay for the entire tracking system ie the passport system which will be a lot of money as it covers wages, offices and computers. Now THAT would be a bad deal and worth fighting!

            Comment


              #7
              And I would ask you "Why should we be paying the $3 or $5 or whatever?" Food Safety is a Government responsibility and they are paid very well for it.
              No $3 for a tag won't break me. But do you see we have started down a slippery slope by accepting the government off loading their costs? Which leads eventually to what the UK producer is facing?
              It's like Churchill said about Hitler when he invaded Chechoslovakia...We either stop him here or we'll have to fight him on the beaches of England!

              Comment


                #8
                Cowman, I would say that we should pay for the tags because the calves are born on our ranches/farms. We want to sell a product so it's our responsibility to identify it as ours -feedlots are only adding value to the product at a later stage as are retailers of beef. It's like a factory producing any other product - would they expect the Government to pay for packaging and putting barcodes on their product?
                P.S.I think the Churchill comment was actually related to Poland ;0)

                Comment


                  #9
                  Perhaps you are right. No matter what, it is a done deal and it won't change. Those are the rules and if I can't live with them, then tough! Never mind that my calves leave the farm healthy! Then go into a feedlot where they are mixed with who knows what. Then to a packer where the immigrant workers don't know the first thing about sanitation or hygiene. I suspect most diseases happen between the farm gate and the store shelf? But the rules say it is my problem? So I pay.
                  And soon we will have a rule saying blue tongue and the other disease are okay. When my cows get it who will be left holding the bag? It will be my problem. Not the feedlots, not the packers, not the retalers, not the government! I get fairly sick of always getting stuck with the bills for things that benifit everyone else.

                  Comment

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