USCA (March 3, 2010) U.S. Cattlemen’s Association (USCA) Executive Vice President Jess Peterson testified today before the U.S. International Trade Commission (USITC) on behalf of ranchers across the country.
The USITC had requested testimony on the probable economic implications of a potential U.S. Free Trade Agreement (FTA) with Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore, and Vietnam - the seven countries that the United States has identified with which they will engage and negotiate the Trans-Pacific Partnership (TPP) Agreement. Specifically, the USITC was asking for the potential economic effect of providing duty-free treatment for imports of products from the seven TPP countries on both U.S. competitive products, their industries, and U.S. consumers.
Following are highlights of USCA’s written and oral testimony:
“With only four percent of the global population, the United States is the world’s leading producer and the world’s leading importer of beef, importing nearly two times more beef than the next leading country when including live cattle imports.
“This comes as no surprise and until the trade distortions that have caused these huge beef and cattle imports into the U.S. are addressed, no consideration should be given to eliminating U.S. tariff rate quotas (TRQ). The U.S. has sacrificed significantly in international trade when it comes to agriculture. It is time we level that elusive playing field. TRQ’s are truly U.S. ranchers’ last line of defense against many of the damaging trade practices we have experienced.
“It also comes as no surprise that the U.S. is the largest beef importing country, since we have the most open borders in the world due to low tariffs and generous TRQs for beef. TRQ’s, or over-quota tariffs, face only a 26.4% tariff. By comparison, tariffs elsewhere in the world average approximately 85%. Coupled with highly restrictive TRQs and non-tariff barriers, these high tariffs in other countries force excess global supply into the relatively open U.S. market. The U.S. should be striving for harmonization of these tariffs.
"When viewing the proposed TPP countries, several tariff and non-tariff issues arise. Notable is the situation in New Zealand where one company controls more than 90% of the country's milk production. It has been reported that New Zealand exports 60% of its beef to the U.S. for a return of $800 million per year. The U.S. is a very valuable outlet for beef of dairy origin, both bulls and cows, which New Zealand would otherwise have difficulty selling internationally. With this being noted, both U.S. cattle producers and dairy producers are undercut by absorbing the price reduction caused by this situation.
“The U.S. has lower sanitary and phyto-sanitary standards (SPS) for imports than many other countries, especially those concerning bovine spongiform encephalopathy (BSE). These low standards have made the U.S. a dumping ground for beef from the countries that have experienced BSE problems. Food Safety and SPS issues continue to be problematic for our industry, as some countries comply with OIE standards, while others ignore them either for cultural reasons, or too often use them as trade barriers. The USITC October 7, 2008 release reported, ‘U.S. beef processors and beef cattle ranchers lose billions of dollars in export opportunities each year because of animal health and food safety measures in other countries that are inconsistent with international standards and vary by country.
“U.S. trade laws should not be weakened. Strong, meaningful and timely dumping and countervailing laws and remedies are important to ensure U.S. producers are not disadvantaged by injurious dumping, subsidies, and import surges.”
“Special Rules for Perishable and Cyclical products was a negotiating principle of the 2002 Trade Act, but this has not been pursued in the Doha talks or FTAs since that time except for a U.S-negotiated quantity-based and price-based beef safeguard in the U.S.-Australian FTA. This safeguard was also limited to certain beef products and failed to recognize the diversity of beef products produced from cattle and their combined impact on the value of cattle. The U.S.-Australian safeguard was a discretionary safeguard, which fails to recognize the importance of a timely mechanism with a perishable product like beef. We encourage TPP negotiators to incorporate an automatic trigger which recognizes the specific problems that perishable products face when markets collapse. Timely safeguards are also critical to remedying industry-specific problems that we experience in a perishable, cyclical industry like ours and must be applicable to all sources, not just particular countries.
“Exchange rates and the attempts of government programs to intervene and alter a country’s currency values distort trade flows which puts U.S. cattle producers at an unfair advantage.
“The United States should also work to remove the multiple tariff, non-tariff, and subsidy-based distortions that undermine U.S. ranchers and inhibit a competitive market for beef and cattle.
“Rules of Origin are becoming increasingly important. Countries like Peru and Chile offer a route for other South American countries to potentially by-pass their trade obligations to the U.S. by trans-shipping or further processing in TPP countries to mask the true origin.
“Transparency and accessibility to prices and volumes of imported beef products as well as cattle are critical to U.S. cattle producers being competitive as evidenced by the daily reporting of volumes and market prices in our own domestic industry. Often times, import and export data is useless because it is outdated by the time U.S. producers receive it.
“The U.S Cattlemen’s Association appreciates the ITC’s commitment to ensuring the well-being of our nation’s cattlemen and beef producers and the opportunity to provide these comments. Too often, trade distortions that artificially suppress domestic prices are looked at in a short term relationship by reducing costs to consumers. However, over time such actions may reduce domestic production, which compromises not only our national food security but also the inherent ability U.S. producers hold to provide significant levels of production for a growing global population.
You may view USCA’s testimony at www.uscattlemen.org. |
