What does everybody think about this?
Feeders ponder NAFTA challenge
Source: Western Producer
Alberta feedlot operators are considering a trade challenge against the United States for damage caused to the Canadian cattle industry by the closure of the U.S. border. Feedlot operators Rick Paskal, John Vander Heyden and Cor Van Raay and former Canadian Cattlemen's Association general manager Charlie Gracey were in Washington, D.C., last week discussing with American government and cattle industry officials a Chapter 11 challenge under the North American Free Trade Agreement. It would be the first time in the history of NAFTA that Canadian cattle producers have launched such a challenge. For a challenge to be successful, the Canadians would have to prove the border closure changed from a health issue into a political issue and caused financial harm to Canadian cattle producers.
"What options do we have? We just feel these people have caused us literally millions of dollars through their actions there," said Paskal, who runs a feedlot near Picture Butte. "We don't feel we can hang on that much more."
Under a Chapter 11 investment challenge, Canadian producers must prove the American action is harming a Canadian's investment in the U.S.
Paskal said the feedlot operators believe they have a winning case because Americans are violating NAFTA's phytosanitary rules by not basing border decisions on international animal health guidelines. The feedlot operators also argue that they have made a substantial investment in the U.S. cattle market.
"We would not have built this industry in Canada to anything near where it was if we didn't have access to the American marketplace," he said.
"We're saying our access to the marketplace is our investment in the United States."
Peter Clark, an Ottawa trade consultant, said Chapter 11 challenges can be arduous.
"These things are not fast, they're not cheap and the United States follows what I would call the scorched earth policy of fighting it. Before you go into it, you better realize you're going up against every resource that the United States government can throw at you."
Clark estimated it would cost $5-$10 million and takes years to fight. Jack DeBoer, a feedlot operator from Monarch, Alta., is watching the plans closely.
"At some point it's no longer a health issue, it's protectionist. As producers we've lost an awful lot of money."
However, DeBoer said he is not sure if the time is right.
"We don't want them to start moving all their resources over to the challenge instead of getting the rules in place. It's got to be timed right."
Hugh Lynch Staunton, vice-president of the Canadian Cattlemen's Association, said when his group investigated the possibility of a Chapter 11 challenge, it was given low odds on winning it and cautioned against the action. At best it would divert resources away from working toward a negotiated solution, he said, and at worst it would be considered a hostile act.
Feeders ponder NAFTA challenge
Source: Western Producer
Alberta feedlot operators are considering a trade challenge against the United States for damage caused to the Canadian cattle industry by the closure of the U.S. border. Feedlot operators Rick Paskal, John Vander Heyden and Cor Van Raay and former Canadian Cattlemen's Association general manager Charlie Gracey were in Washington, D.C., last week discussing with American government and cattle industry officials a Chapter 11 challenge under the North American Free Trade Agreement. It would be the first time in the history of NAFTA that Canadian cattle producers have launched such a challenge. For a challenge to be successful, the Canadians would have to prove the border closure changed from a health issue into a political issue and caused financial harm to Canadian cattle producers.
"What options do we have? We just feel these people have caused us literally millions of dollars through their actions there," said Paskal, who runs a feedlot near Picture Butte. "We don't feel we can hang on that much more."
Under a Chapter 11 investment challenge, Canadian producers must prove the American action is harming a Canadian's investment in the U.S.
Paskal said the feedlot operators believe they have a winning case because Americans are violating NAFTA's phytosanitary rules by not basing border decisions on international animal health guidelines. The feedlot operators also argue that they have made a substantial investment in the U.S. cattle market.
"We would not have built this industry in Canada to anything near where it was if we didn't have access to the American marketplace," he said.
"We're saying our access to the marketplace is our investment in the United States."
Peter Clark, an Ottawa trade consultant, said Chapter 11 challenges can be arduous.
"These things are not fast, they're not cheap and the United States follows what I would call the scorched earth policy of fighting it. Before you go into it, you better realize you're going up against every resource that the United States government can throw at you."
Clark estimated it would cost $5-$10 million and takes years to fight. Jack DeBoer, a feedlot operator from Monarch, Alta., is watching the plans closely.
"At some point it's no longer a health issue, it's protectionist. As producers we've lost an awful lot of money."
However, DeBoer said he is not sure if the time is right.
"We don't want them to start moving all their resources over to the challenge instead of getting the rules in place. It's got to be timed right."
Hugh Lynch Staunton, vice-president of the Canadian Cattlemen's Association, said when his group investigated the possibility of a Chapter 11 challenge, it was given low odds on winning it and cautioned against the action. At best it would divert resources away from working toward a negotiated solution, he said, and at worst it would be considered a hostile act.
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