Billings, Mont. -- In a letter sent Friday that contains trade data compiled by the U.S. Department of Agriculture (USDA), 17 R-CALF USA officers, directors and committee chairs informed Agriculture Secretary Tom Vilsack and U.S. Trade Representative Ron Kirk that unless Canada and Mexico can demonstrate that the U.S. country-of-origin labeling (COOL) law has reduced the value of their combined exports of live cattle and beef to the U.S. by more than $1.3 billion, those countries cannot even claim that COOL has caused them any economic harm. Both Canada and Mexico have challenged the U.S. COOL law in a complaint filed with the World Trade Organization, with Canada's most recent complaint filed Oct. 7, 2009, and Mexico's filed Oct. 9, 2009.
R-CALF USA's letter contends that economic harm must be measured from a balanced trade relationship and explains that the reason Canada and Mexico cannot begin to measure an economic harm "is because these combined countries continue to enjoy the unmitigated, windfall spoils emanating from an imbalanced trade relationship with the United States, to the tune of $1.3 billion annually."
The charts and data in R-CALF USA's letter demonstrate: 1) during the past five years, the U.S. accumulated a $6.6 billion deficit in the trade of live cattle, beef, beef variety meats and processed beef in its trade relationships with Canada and Mexico, representing an annual average loss in domestic cattle sales of $1.3 billion; 2) the U.S. imported nearly $1 billion in slaughter cows, bulls, steers and heifers from Canada and Mexico in each of the past two years, which represents a direct one-for-one replacement for nearly $1 billion per year in domestic cattle sales and serves to reduce the demand and price of domestic cattle.
"U.S. cattle producers are now suffering the severe consequences of a long-term trade imbalance in which we import each year from Canada and Mexico more than $1 billion more than we export to those countries," wrote R-CALFUSA CEO Bill Bullard. "To make matters worse, our global trade deficit is even greater, amounting to $1.6 billion in 2008. This is unsustainable and it is causing tens of thousands of U.S. cattle farmers and ranchers to exit the industry. COOL is the only available tool the U.S. cattle industry has to even begin to rebalance the lopsided trade relationships with Canada and Mexico because neither USDA nor the U.S. Trade Representative (USTR) have taken any affirmative steps to mitigate the untenable and prolonged trade imbalance with these two countries.
"For the first nine months of this new Administration, we have witnessed: 1) record financial losses for independent U.S. cattle feeders; 2) rapidly falling cattle prices for hundreds of thousands of U.S. cattle backgrounders, stockers and cow/calf producers; 3) near-record beef prices paid by U.S. beef consumers; and, 4) no action on the part of USDA or USTR to take any effective steps to mitigate the horrific losses sustained in Rural America due to untenable trade policies that include the failure to protect our U.S. cattle herd from disease," the letter points out.
In closing, the letter makes a strong appeal to Vilsack and Kirk: "It is not enough that you have jointly stated that you intend to defend COOL against Canada's WTO complaint. We need both of you to begin defending the interests of this nation's cattle farmers and ranchers by restoring their opportunity to be profitable in the U.S. cattle industry. U.S. cattle farmers and ranchers do not have deep enough pockets to withstand the persistent economic drain caused by failed trade policies, and time is fast running out."