Manitoba’s beef producers were initially alarmed by reports in late April that NAFTA was on the chopping block in the form of an executive order to withdraw from the trade agreement.
Dissatisfaction with NAFTA was among Trump’s talking points during his 2016 election campaign along with the Trans-Pacific Partnership, which he signed an order to withdraw from soon after taking office in January.
Brian Lemon, Manitoba Beef Producers general manager, said NAFTA talks are a concern for his organization, but they curbed their alarm during the hours it looked like the U.S. might withdraw.
“What we’ve learned from the short 100 days of the Trump administration is not to react too quickly and not to react to initial statements,” he said. “Certainly we heard it and certainly we recognized sort of instinctively almost what sort of impacts pulling out of NAFTA might have, not only for the cattle industry and probably not only for the agriculture industry, but for the Canadian economy. The U.S. is our largest trading partner, there’s no denying that. Having a good solid and reliable trading relationship with it is important to our economy; it’s important to agriculture and it is important to the cattle industry.”
The province estimates that Manitoba exported $16.3 billion worth of products to the United States in 2015, far above second-place China at $1.1 billion.
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The Manitoba beef industry is well integrated with its southern neighbours, Lemon added, particularly in the northern states along the international border.
Open to discussion
Both the Manitoba Beef Producers and Canadian Cattlemen’s Association (CCA) have said they are open to a NAFTA renegotiation.
A list of industry priorities has been submitted to the federal government, CCA president Dan Darling has said.
Among those priorities, both the Manitoba Beef Producers and Canadian Cattlemen’s Association hope to see current branding/tattooing requirements at the border end.
Under current regulations, non-slaughter cattle must be identified with a “C^N” brand, “CAN” tattoo to the left ear or “be permanently and humanely identified by any other alternative method approved by the USDA before the shipment reaches the port of entry into the U.S.,” according to the Canadian Food Inspection Agency.
Cattle and bison certified for slaughter in the U.S. do not require identifying marks.
Other key issue the beef industry has flagged all centre around eliminating barriers to trade.
“There are huge opportunities to harmonize regulations, to harmonize even availability of veterinarian drugs,” Lemon said. “There’s all kinds of opportunities around those sorts of issues that would make our producers more competitive with U.S. producers.”
Border inspection stations are also on the list of things the beef industry would see eliminated.
The issue affects both beef and pork markets heavily, Darling said.
“Especially if you’re taking fresh product, fresh beef or fresh pork, it’s only got so much shelf life and the time it takes to get through these inspection places and the fact that they’re now exposed to air and everything else, the general rule of thumb is that if you send 11 loads down, one of the 11 is coming back because you won’t have time to get it on the shelf,” he said.
Lemon further noted that Manitoba beef interests largely coincide with the industry throughout the rest of the Prairies and Manitoba Beef Producers will join other industry representatives if NAFTA talks go ahead.
“When it comes to any sort of NAFTA renegotiation, should that happen, certainly we’re going to be at the table and we’re going to be fighting to be at the table to ensure that our interests are presented and recognized as part of any negotiations,” he said.
NAFTA and herd growth
Added to the discussion is the provincial goal to grow Manitoba’s cattle herd from 485,000 to pre-BSE levels, about 750,000. The announcement was made by provincial Agriculture Minister Ralph Eichler in 2016.
“If we’re going to do that in a sustainable way, we need to make sure we have credible, reliable markets, so the opportunities to sell cattle into the U.S. system is an important piece of whatever potential we have to grow the herd,” Lemon said. “Putting more calves on the ground without having a market for them is very short sighted.”
It is his hope that a NAFTA renegotiation might lead to increased cattle movement into the U.S.
Many beef producers may also remember COOL, the U.S. country-of-origin labelling law that was the basis of an eight-year legal battle between the United States and Canada between 2007 and 2015.
While a separate issue from NAFTA’s possible renegotiation, Lemon acknowledged the possibility of other restrictive legislation under the current administration.
“We’re seeing sort of a growing nationalism or nationalistic perspective out of the U.S. and not just related to cattle, but more generally… We’re certainly recognizing that there is a real opportunity that there will be future efforts similar to a COOL to try and feed that nationalistic movement in the U.S.,” he said.
Will CETA make up the difference?
The answer is no, according to Darling.
“To us, they’re two very different issues,” he said. “The European market is a market that we are in right now on a small scale. The numbers we throw out, we’re only guessing what that market could really turn into, whereas with NAFTA we already know what the U.S. market is for us, so for us right now, the NAFTA right now is a bigger deal than CETA is.”
The incoming trade deal between Canada and the European Union is still working through regulatory issues that limit access to European markets, particularly in terms of antimicrobial treatments such as citric acid, diluted peroxyacetic acid and lactic acid used in food processing.
The Canadian Cattlemen’s Association reports that supporting data on citric and peroxyacetic acid use is being prepared for the European Food Safety Authority. The body gave the green light for lactic acid use in beef carcasses, cuts and trimmings and recycled hot water in carcass decontamination in 2011, although recommendations have only partially been adopted by the EU, the CCA has said.
“We view the techniques that Europe uses and what they want us to do as making a less safe product, so we’re not about to change what we’re doing but until they agree to the process that we’re doing, there’s not going to be much more beef product going into the EU than is going in there right now,” Darling said.
Critics of the deal have also pointed to the European regulations on added growth hormones, an issue that may cut out a significant portion of Canadian beef eligible for the EU.
CETA allows for 65,000 tonnes of duty-free beef and veal exports per year, phased in over six years.