Leaders from the United States, Mexico and Canada discuss trade policy
Guest speakers on a recent Beltway Beef podcast, hosted at the 2022 Cattle Industry Convention and the National Cattlemen’s Beef Association (NCBA) Trade Show Feb. 1-3 in Houston, Texas, discuss the importance of free trade agreements and the current relationships between the U.S., Mexico and Canada.
NCBA Senior Director of International Trade and Market Access Kent Bacus was joined by Counselor for Agricultural Affairs at the Embassy of Mexico in the U.S. Luis Martinez and Counsellor of Agriculture and Fisheries at the Embassy of Canada in the U.S. Gizem Eras.
NCBA policy on trade
Bacus shares the importance of trade policy for cattle producers in the U.S.
“When we look at trade policy, we are looking for opportunities to maximize the total value of our cattle, both in the markets and as beef products,” says Bacus.
He says trade policy ensures producers are able to sell products to the highest bidders in the world. Bacus recognizes international trade as a crucial aspect for U.S. cattle producers’ success.
“While 85 percent of what we sell is going to be to American consumers in our domestic market, where we dominate, we do have to find a way to sell the rest of those cuts,” Bacus says.
He mentions Mexico and Canada traditionally serve as good markets for U.S. trade, but exports to Asian markets have tremendously increased in recent years. Bacus notes this is something for NCBA and producers to keep in mind.
“We really try to focus on keeping good lines of trade with our North American trade partners, whether it’s through live cattle or beef, but we are also trying to look at other opportunities out there,” Bacus shares.
He says removing tariff and non-tariff barriers takes subjectivity out of trade policy and makes it more objective.
Objective trading helps “foster entrepreneurial spirit and encourage our people to be creative in how we sell our products and to where we sell our products,” adds Bacus.
2021 beef export numbers
Total 2021 U.S. beef export numbers are worth celebrating.
According to Bacus, U.S. beef exports will exceed $10 billion, which he notes, “Is a phenomenal record when you break this down. About $400 per head attributed solely to exports.”
Bacus adds exports were closer to $3 or $4 billion 10 years ago and accredits part of the rise in export dollars to the growing demand for beef overseas, especially in Asia.
He also mentions the removal of non-tariff trade barriers, which allows producers to sell to more customers in America and overseas.
“We have good trade policy which allows us to not be held back by enormously high tariffs, which we’ve seen in some of these markets before,” he adds.
Trade with Mexico and Canada
Eras acknowledges the importance of beef-related trade relations between the U.S., Mexico and Canada.
“Canada is a trading nation – one in five jobs in Canada depend on trade. In agriculture, this is no different, including in the beef sector,” she notes.
She mentions having predictable trade rules allows producers in all three countries to be successful in selling products.
“Looking at eliminating those trade barriers is key for us to ensuring a predictable trading environment remains key,” says Eras.
Martinez says 70 to 80 percent of general exports from Mexico are destined to the U.S. and Canada, with beef being an extremely important export. He notes cattle trade with the U.S. has been on Mexico’s agenda for a long time.
“Cattle trade comes all the way from the 1800s, so we have a long history there,” Martinez shares.
Bacus says the U.S. is increasing live cattle imports to Mexico and Canada.
“Live cattle exports from Mexico are trending down, but live cattle imports from the U.S. into Mexico have been increasing steadily,” adds Bacus.
This year is forecasted to be the first year in trade history that the U.S. is exporting as many live cattle to Canada as importing from Canada, he shares.
“I think this speaks to the strength of some of our trade policy. As Americans, we can market our cattle in three countries and sell our beef products in all three countries,” says Bacus.
Bacus mentions product labeling is a concern shared by all three countries.
“One of the biggest issues between our countries is over Country of Origin Labeling (COOL),” he shares.
NCBA has concerns over COOL proposals from Congress, which may not be trade compliant and may “risk a potential trade war,” Bacus notes.
He shares NCBA is working to find “real solutions to provide product differentiation for American beef and the U.S. market by working with the U.S. Department of Agriculture to find voluntary, trade compliant solutions to labeling products of the U.S.”
Eras mentions Canada is following the issue of mandatory COOL very closely.
“We firmly oppose any mandatory COOL which may be put out there,” she says. “We appreciate working with NCBA and ensuring everything is compliant in this regard.”
Eras worries COOL restrictions could negatively impact the beef industry in Canada, with how integrated the industry is.
“We are so integrated –the animals and the products cross the border a number of times before it ends up at the tables of consumers,” she shares.
Relations between countries
Bacus feels NCBA must continue building relationships with customers and competitors.
“We need to be able to communicate. When problems arise, we need to be able to trouble shoot them,” says Bacus.
He acknowledges the struggles COVID-19 brought to trade. Restrictions on travel and threats of border closures make working together more important than ever for these countries.
“When you have problems in the supply chain, it creates problems for everyone,” Bacus says. “It was important for us to work together to make sure any issues were resolved as quickly as possible so commerce was not impeded, so customers have access to all our products.”
Eras appreciates the partnership between NCBA and Canada.
“We work very closely with NCBA on promoting international trade obligations, it’s a great partnership we have,” she mentions.
Bacus says NCBA will continue to work with Mexico and Canada to address supply chain issues impacting the countries.
“Even though we are competitors, we are also allies,” Bacus concludes.
Kaitlyn Root is an editor for the Wyoming Livestock Roundup. Send comments on this article to firstname.lastname@example.org.