Billings, Mont. ?? In formal comments filed this week, R-CALFUSA urged the Office of the United States Trade Representative (USTR) to reject the proposed free trade agreement (FTA) with Colombia (U.S.-Colombia FTA). A notice and request for comments on the proposed FTA was published in the Federal Register by USTR in July, with comments due September 15.
R-CALF USA's comments state that the U.S.-Colombia FTA should be rejected because the FTA ??completely ignores the unique characteristics of the U.S. cattle industry and likely would harm farmers and ranchers, consumers, and the rural communities all across America that are economically dependent on a vibrant U.S. cattle industry. ? The group argued that the U.S. lacks a national trade policy and the U.S.-Colombia FTA, like previous FTA's and trade policies, would disadvantage U.S. cattle producers.
With the benefit of numerous charts, R-CALF USA's comments show that domestic cattle prices were depressed during the nine-year period when U.S. beef exports were rapidly rising to record levels, and only after the U.S. border was closed to Canadian cattle and beef due to disease problems in 2003 ?? and after U.S. beef exports fell to a 19-year low ?? did domestic cattle prices rebound. The group asserted that this empirical evidence dispels the industry-led myth that increased exports automatically translate to higher, more sustainable prices for U.S. cattle producers. In its other charts, the group demonstrates that U.S. cattle producers already are overwhelmed by a substantial global trade deficit in cattle and beef, and an even larger trade deficit with the 17 countries that already have FTA's with the U.S. ?? FTA countries have generated a U.S. trade deficit that exceeded $2 billion annually for the past 5 years.
??The result of current trade policies is a U.S. cattle industry in crisis ?? a shrinking, unhealthy industry that will not long support independent family farmers and ranchers who are being driven out of the industry by the tens of thousands each year, ? the comments stated. The group asserted that historical data show that the U.S.-Colombia FTA likely would worsen the U.S.' already unacceptable trade deficit in cattle and beef because Colombia is a low-cost producing country with a sizable herd of 27 million cattle ?? comparable to Australia's herd size of 28 million cattle ?? and Colombia has significant production potential.
R-CALF USA cites numerous examples, and includes several charts, showing that beef imports from Australia have increased significantly since 1997; that the small country of Chile, which had been a net importer of U.S. beef for 18 years and with a herd size of fewer than four million cattle, nevertheless was able to dramatically ramp-up beef exports to the U.S. following the U.S.-Chile FTA, causing the U.S. to incur a beef trade deficit with that country of nearly $3.4 million in 2007. The group's charts show also that the U.S. has maintained a sizable deficit for the past 15 years with Canada and Mexico under the North American Free Trade Agreement (NAFTA), with the deficit running well over $1 billion annually in each year since NAFTA's 1994 implementation, with the exception of just two years, 1997 and 2003, when the deficit fell slightly below $1 billion.
R-CALF USA also counters the argument that Colombia is not likely to ramp-up exports to the U.S. due to current foot-and-mouth disease (FMD) restrictions. The group states that in 2003 ??when the U.S. lifted FMD restrictions on Uruguayan beef, that country, with a cattle herd size of less than 13 million cattle, significantly ramped-up beef exports to the U.S. and was able to drive the U.S. trade deficit more than $400 million deeper by 2005. ??The U.S.-Colombia FTA contains no provisions to address import surges likely to occur after FMD restrictions are lifted and it would be irresponsible to support an FTA without them, ? said R-CALFUSA CEO Bill Bullard.
In addition to its concern that the U.S.-Colombia FTA would worsen the ongoing trade deficit, which R-CALF USA contends is a leading cause for the currently depressed U.S. cattle prices, the group cited several additional shortcomings of the FTA that render it unacceptable:
- There has not been an explicit evaluation of the likely impacts of trade liberalization on upstream cattle producers and USTR has not considered the cumulative impact of FTA's that liberalize beef trade.
- The effect that Colombia's cattle-producing subsidies would have on U.S. cattle producers has not been analyzed.
- The FTA fails to include special rules to address the perishable and cyclical nature of cattle and beef including a price-based safeguard to protect cattle prices from price-depressing import surges.
- The FTA fails to include adequate rules of origin to prohibit cattle from countries such as Brazil and Venezuela from being slaughtered in Colombia and the resulting beef shipped to the U.S. duty free under the FTA.
R-CALF USA's comments concludes by stating that ??the U.S.-Colombia FTA will further the ongoing destruction of the U.S. cattle industry by further eliminating the opportunity for family farmers and ranchers to maintain economically viable farming and ranching businesses across America. ?
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