NCBA links Canada trade with opening foreign markets
passed an 11-point directive that ties the reopening of live cattle
trade with Canada to other unresolved trade issues, such as the
reopening of Japan, South Korea and Mexico to US beef.
This directive will put pressure on the US department of agriculture (USDA), which has proposed reopening the border to imports of live Canadian cattle under 30 months on 7 March 2005, to find a solution. The department is still locked in negotiations to open other foreign markets to US beef exports.
Such an achievement would be a welcome relief for North American beef processors, who have suffered from the closure of lucrative foreign markets.
"The first quarter was extremely difficult for us this year," said Tyson chief executive John Tyson last week. "Continued market restrictions for beef, as well as a lack of live cattle supplies combined to impact our earnings."
Key markets, such as the lucrative billion-dollar market in Japan, have been closed to US beef processors following the country's first case of Mad Cow Disease in 2003. The US has been pressuring Japan to resume imports of American beef, but talks have continually stalled over Japan's insistence that the United States follow it practice of a blanket test on all slaughtered cattle, or adopt an equivalent measure.
The two sides struck a deal in October 2004 to resume limited imports of American beef from cows younger than 21 months old into Japan. But those plans have been delayed by a dispute over how to determine the age of cattle, and local media reports have predicted the ban is likely to stay in place until at least the spring.
In addition, the beef trade with Canada was suspended after the first case of bovine spongiform encephalopathy was discovered in a Canadian cattle herd in 2003.
In a conference call, Tyson said that the reopening of global beef trade would be one of the best means of kick-starting the industry again. "It will get better if we can get supply associated with the re-opening of the Canadian border," he said. The NCBA will now have to work to resolve a list of conditions before trade with Canada is resumed. These include the assurance that all Canadian firewalls to prevent BSE, specifically adherence to their feed ban, are functioning properly.
In addition, the movement of Canadian cattle into the United States must be managed to minimise market disruptions. Fed cattle imported for immediate slaughter must be certified to be less than 30 months of age at the time of importation.
But most pressure will be on the US government, which must now reach an agreement to re-establish beef and beef byproduct trade with Japan, South Korea and Mexico, and apply economic sanctions if necessary.
The NCBA's 11-point directive was passed unanimously and upheld in the recent annual membership meeting. The directive will be part of a mail ballot sent to all NCBA members on 17 February.
