THE initiation of a North American Free Trade Agreement challenge to the U.S. government’s continued ban on Canadian cattle is a welcome development in the BSE crisis. It’s one of few apparent options available to cattle producers, feedlot owners and many in the cattle industry who seek compensation for losses incurred since the U.S. border closed to live cattle.
The action would be strengthened if the Canadian government chimed in with another complaint under a different section of NAFTA, but so far no industry group has asked it to do so.
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The challenge, initiated by a group of cattle producers and feedlot owners under chapter 11 of NAFTA, marks the first time individuals rather than corporations have taken a government to court under the deal. The initiating group has dubbed itself the Canadian Cattlemen for Fair Trade and at last count included 84 members.
It charges that the continued closure of the U.S. border to Canadian cattle has cost them at least $150 million and it demands that much in damages. The total could grow if more parties join the challenge.
Under chapter 11, people from a NAFTA country can seek damages if they invest in another NAFTA country and incur losses caused by a trade action.
Until recently, Canadian cattle organizations advised against taking aggressive legal actions against the U.S. in efforts to prevent American anger that could delay a border opening.
Now Alberta Beef Producers has announced plans to provide up to $200,000 in support of the trade challenge. The National Farmers Union has offered moral support. The Canadian Cattlemen’s Association hasn’t yet announced its position on the matter.
With U.S. presidential and congressional elections set for November, there will be no early easing of border restrictions. Since it will take a few months after the election for new U.S. officials to be sworn in, Canadian cattle producers are staring at a date no earlier than January or February 2005.
The NAFTA challenge is properly reserved as a weapon of last resort but it’s still part of the arsenal – a part Americans have few qualms about using against Canadian producers. North Dakota wheat growers, northern state cattle producers and U.S. hog producers have all initiated damaging trade actions against Canadian producers.
U.S. interests defend themselves by saying they are not against Canadian farmers, but rather are against certain government policies and/or bad trade deals. Such explanations make challenges sound more palatable, but the damage felt on this side of the border is nevertheless severe.
The fact is, when U.S. producers see an ebb in the flow of money, they tend to blame outside sources, often with less provocation than the Canadian cattle industry has faced since the BSE crisis began.
U.S. negotiation tactics since their own cattle and beef exports were affected by BSE provide further justification for the Canadian NAFTA challenge.
The Technical Framework report of the U.S.-Japan BSE Working Group shows the U.S. is undermining Canada’s markets in Asia by differentiating between Canadian and U.S. beef products rather than negotiating as a part of an integrated North American industry.
This tactic is employed even though a harmonized North American cattle trade intricately tied through the free flow of beef and cattle across borders has been the reality for some time.
Some Canadians express worry that the NAFTA challenge will attract repercussions from our American neighbours.
But perhaps that view does not give enough consideration to recent history and to the litigious nature of American society.
In fact, under the U.S. system it seems demands are not taken seriously unless the maximum rule of law comes to bear.
That said, there is need for caution. The Americans have a key advantage when it comes to trade. We need their markets far more than they need ours. A serious escalation in cross-border trade battles must be avoided.
Yet in view of the cool, legalistic attitude that Americans seem to take on these matters, they may well wonder why Canadian producers haven’t taken NAFTA action earlier.
It is time for a Canadian-led NAFTA assault to challenge American government decisions that are based on politics rather than science.
The alternative is to send the message that it is OK to cast aside mutually agreed-upon rules for short-term political gain.
