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CEO Invited to Testify at ITC Hearing on Trans-Pacific Partnership Free Trade Agreement March 1, 2010 Washington, D.C. – At the invitation of the U.S. International Trade Commission (ITC), R-CALF USA CEO Bill Bullard will testify at a hearing tomorrow (Tues. – March 2) to gather input for ITC’s investigation on the probable economic effect of duty-free imports of a U.S.–Trans-Pacific Partnership (TPP) Free Trade Agreement (FTA). Besides the U.S., there are seven other countries included in the TPP: Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore and Vietnam. The ITC expects to submit its report to the U.S. Trade Representative (USTR) by June 2, 2010. R-CALF USA, in its extensive 49-page written pre-filed brief, requests that the ITC recommend to President Obama that the TPP be summarily rejected, and also recommends that the U.S. begin immediately to establish a practicable national trade policy, with clearly defined goals and objectives, that likely will result in increased economic opportunities for U.S. small businesses, including U.S. cattle farmers and ranchers. “More specifically, we believe the U.S. should establish a trade goal to facilitate the restoration and rebuilding of the contracted U.S. cattle industry, and to achieve this goal, the U.S. must formulate a strategy that seeks to balance the disparate economic interests between the beef commodity industry and the live cattle industry,” said R-CALF USA CEO Bill Bullard. “Also of concern is the fact the TPP will give New Zealand duty-free, unlimited access to the U.S., and New Zealand has been building its cattle herd while the U.S. herd continues to contract. The U.S. currently has no FTA with New Zealand, yet New Zealand is the fourth largest exporter of beef to the United States.” R-CALF USA is offering the following recommendations to assist in the development of such a national trade strategy: * Specifically Assess Trade Impacts on the U.S. Cattle Industry: Cattle producers are the sector most likely to experience income, output and employment losses due to ongoing liberalization of U.S. cattle and beef imports. The U.S. should employ a partial equilibrium model to explicitly evaluate the likely impact of beef and cattle trade liberalization on upstream cattle producers, and take into account the market concentration and contracting practices in the beef packing industry, as well as the perishable nature of live cattle and the cyclical nature of the live cattle industry, in making its assessment. * Address Global Market Distortions That Disadvantage U.S. Cattle Producers: Tariffs in the rest of the world on beef average 85 percent while those in the U.S. are just 2.5 percent (26 percent on above quota imports). There also are massive subsidies by the European Union and large subsidies by Brazil, Australia and Canada versus essentially none from the United States. In addition, state trading enterprises for grains in exporting countries distort competition by making grains available to foreign cattle producers at prices that are not market driven. * As required in the Trade Act Of 2002, special rules must be included in all trade agreements to recognize the perishable and cyclical nature of cattle and beef, be applicable to both cattle and beef, be automatic in application, and should include “snap backs” of tariffs to previous levels when beef and/or cattle prices fall to a particular trigger level. * Designate cattle and beef as like/kind products, and recognize that beef is imported in two distinct forms: pre-slaughtered beef (live cattle) and post-slaughtered beef (beef). * Prevent trans-shipment of foreign cattle in exporting countries by modifying rules of origin to require that beef be derived from animals born, raised and slaughtered in the country of export. * Cease the practice of ratcheting down U.S. health and safety import standards to accommodate more imports: Importing countries must be required to meet U.S. health and safety standards, which standards must now be strengthened following recent actions that have effectively weakened restrictions designed to prevent the importation of livestock diseases and pests and unsafe food. * Require all imported livestock to be permanently marked with a mark of origin to aid in foreign animal disease tracebacks after importation (remove livestock from the U.S. Department of Treasury’s “J-List”). * Correct currency manipulation by trading partners that have taken action to under-value their currencies vis-à-vis the U.S. dollar to gain an unjust trading advantage. * Cease the practice of allowing foreign countries access to the U.S. market before the U.S. is allowed access to foreign markets. * Amend the North American Free Trade Agreement (NAFTA) to provide U.S. cattle producers relief from price-depressing cattle and beef imports. R-CALF USA’s written testimony describes: 1) the current state of the U.S. live cattle industry – its structure, participants and productivity; 2) the historical trade deficit in cattle and beef and its impact on the economic viability of the U.S. cattle industry; 3) the unique characteristics of the U.S. cattle industry that make it particularly vulnerable to supply increases – a consequence of increased imports; 4) the probably impact of providing duty-free treatment to imports under the proposed TPP – impacts to both cattle producers and consumers; and, 5) the specific reforms needed to address the U.S. trade deficit in cattle and beef and reforms to achieve a practicable, national U.S. trade strategy. “It’s critically important that we help the USITC recognize that the U.S. live cattle industry is a distinct industry segment within the U.S. beef supply chain, and that a clear demarcation point exists between the live cattle industry and the beef commodity industry (packers and retailers),” Bullard pointed out. “This demarcation point is so profound that often there’s an inverse relationship between economic prosperity in the live cattle industry and economic prosperity in the beef commodity industry, and it is R-CALF USA that exclusively represents the thousands of farmers and ranchers across 46 states who breed, birth and raise live cattle for breeding purposes and beef production. “These live cattle are subsequently marketed to beef packers that transform live cattle into the commodity beef, which is then further processed and/or marketed to other entities within the beef commodity industry, which include processors, wholesalers, distributors and retailers,” he said. # # # R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is a national, non-profit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. R-CALF USA represents thousands of U.S. cattle producers on trade and marketing issues. Members are located across 47 states and are primarily cow/calf operators, cattle backgrounders, and/or feedlot owners. R-CALF USA directors and committee chairs are extremely active unpaid volunteers. R-CALF USA has dozens of affiliate organizations and various main-street businesses are associate members. For more information, visit www.r-calfusa.com or, call 406-252-2516. |
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