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Overcoming North American Trade Hurdles

Barry Carpenter

2014 Global Meat Trade Exports in Million Tons

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

30

25

20

15

10

5

0

Poultry

Pork

Beef

USDA-FAS: 2014 Livestock and Poultry: World Markets and Trade

Beef Statistics

USDA-FAS: November 2013 Livestock and Poultry: World Markets and Trade

Livestock Marketing Information Center, Data Source: USDA-FAS

Source: USDA-FAS, CattleFax

Source: USDA-FAS, CattleFax

Pork Statistics

Globally, pork is expected to reach near record highs

USDA-FAS: November 2013 Livestock and Poultry: World Markets and Trade

Livestock Marketing Information Center, Data Source: USDA-FAS

Lamb Statistics Globally

Main world exporters are New Zealand and Australia, by a large margin

United States Minimal Exports are down 6% Most exports go to Mexico and Canada

Canada Minimal Top 3 export markets are Thailand, France and US

Mexico Net importer Export mainly to US and Russia

Data Source: USDA-FAS

Broiler Statistics

USDA-FAS: November 2013 Livestock and Poultry: World Markets and Trade

Livestock Marketing Information Center, Data Source: USDA-FAS

Trade Agreements and Groups NAFTA

Canada, US and Mexico Started January 1, 1994 Worlds largest free trade area

450 Million people 17 Trillion in goods and services

Trade Agreements and Groups US-Canada Regulatory Cooperation Council

(RCC) Created February 4, 2011 Working on reducing trade

hurdles between US and Canada Joint Action Plan released December 7, 2011

North American Trade History

Hurdles and Challenges Overall major hurdles and challenges in all

areas Streaming trade processes Eliminating re-inspection at borders Country of Origin Labeling (COOL)

Hurdles and Challenges: Policy and Government

Certification and border inspection needs to be streamlined

Common meat nomenclature

Hurdles and Challenges: Policy and Government – COOL Timeline

2002 – Made mandatory in Farm Bill

2008 – Amendments to address key problems

2009 – Final rule takes effect

2009 – Mexico and Canada file official complaint with WTO

2011 – Panel finds in favor of Mexico and Canada

2012 – WTO finds US out of compliance

2012 – May 23, 2012 compliance date set

2013 – USDA proposes and finalizes rule with no significant changes

Hurdles and Challenges: Policy and Government – COOL

Hurdles and Challenges: Policy and Government – COOL

Hurdles and Challenges: Policy and Government – COOL

Hurdles and Challenges: Policy and Government – COOL

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Hurdles and Challenges: Policy and Government – COOL

Beef Increased Processing Costs in the US Establishments running

imported cattle Increase $45.50 - $59.00 a

head Establishments running only

US beef Increase only $1.50 a head

Pork Increased Processing Costs in the US

Establishments running mixed origin hogs Increase $6.90 – $8.50 a head

Establishments running only US hogs Increase only $0.25 a head

Hurdles and Challenges: Policy and Government – COOL

If US does not comply, September – December 2014 WTO retaliation proceedings continue

and retaliation against US is authorized

Hurdles and Challenges: Policy and Government – COOL

Possible WTO punishments: US Taxpayer compensation to

Mexico and Canada The authorizations of trade

sanctions against the US Mexico and Canada have voiced support in favor of this punishment

Hurdles and Challenges: Animal Health A common protocol for disease outbreaks

needs to be developed Recognized zones for disease control Mutual veterinary services Method to ensure both countries are protected from disease

Still allow bilateral trade in disease free zones

Hurdles and Challenges: Animal Health A common protocol for

veterinary drug plans needs to be developed Align Maximum Residue

Limits and tolerances Develop method to

inform each other about newly introduced drugs

While maintaining each countries ability to make decisions on new products

Hurdles and Challenges: Meat and Food Safety

Have equivalent meat product inspection system Common approach to food

safety Align food safety systems

while protecting human health

Open sharing of information Government oversight

HACCP Data

Microbiological Chemical residue

Hurdles and Challenges: Meat and Food Safety

Testing practices and procedures Same food safety laboratory accreditation criteria Same of acceptable testing regulations Reliable evidence of test results

Canada lags the US in terms of rapid pathogen testing methods

Hurdles and Challenges: Meat and Food Safety

Mexico is behind US and Canada in food safety and system sophistication January 2014, Mexican

government announced that they will provide $50 million to abattoirs and processers

Hurdles and Challenges: Cultural

Hurdles and Challenges: Cultural

Conclusion: Big Picture Major hurdles facing North American

trade: Country of Origin Labeling

Hurting trade in Mexico, Canada and US Against WTO regulations Unnecessary as it is not improving food safety of

meat products

Conclusion: Big Picture Streamlining all processes and

regulations Multiple regulations from each

country is confusing and difficult to follow

In some cases, the same test is conducted multiple times by each country, which is unnecessary

Eliminating re-inspection Waste of money by both

countries conducting the same inspection

Unnecessary

Conclusion

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Thank you!

Questions?