Win, lose or draw, the challenge being mounted by the American cattle industry against imports will affect the way Canada negotiates in the next round of world trade talks, say officials.
Canada will be trying to negotiate new international rules to govern anti-dumping cases.
“The government has agreed that this is an issue it will take to trade talks to try to negotiate rules which recognize cyclical industries,” said Dennis Laycraft, general manager of the Canadian Cattlemen’s Association.
One of the complaints under investigation in the United States is that Canada has dumped beef and cattle across the border – sold at less than production cost.
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Trade officials say it is a charge on which Canadian cattle and other commodity exporters may be vulnerable, as are exporters in other countries.
“American law ties dumping directly to selling below cost of production,” Ottawa-based trade consultant Bill Miner said in a March 19 interview.
“I’m not sure that’s the case in other countries but it is American law and that’s what we are facing. So I think we may be vulnerable.”
Laycraft said in an interview from Calgary it is a difficult issue to defend. Cattle prices rise and fall and sometimes, prices dip below production costs.
“In any commodity with cycles, there will a problem,” he said. “It’s a technicality that could put any trading country in jeopardy.”
In the short term, the job of the CCA will be to defend itself against both countervail and anti-dumping actions under way in the U.S.
At the CCA March annual directors’ meeting in Ottawa, trade issues dominated.
The industry and the federal government are working closely to try to counter American arguments that cattle and beef exports are both dumped and subsidized. “The federal government has put as much time and effort into this as I’ve ever seen,” said Laycraft.
But a longer-term strategy will be needed in the next round of World Trade Organization talks beginning in November to try to write international rules that deal with the issue.
Miner suggested one solution could be to define anti-dumping as selling below domestic prices, rather than cost of production. But he also warned it will not be an easy issue to negotiate.
“There are rules already but attempts to change them are difficult,” he said.
