American COOL Redux: No Kumbayah But Why Not Just Comply?

Canadian Beef JPEG     In November of this year it will mark my 29th year of writing this column.  That means that every week for the last 29 years I have sat down on Thursday night to write about different aspects of agricultural economics.  Over that time I’ve seen tremendous change and what we argue about today is so much different than what we argued about 29 years ago.

There are a few constants over that time with variable farm revenues being one of them.  However, that will never change, in fact, it will be that way in 29 million years.  It’s simply the nature of agricultural economics that it happens. However, if there has been one constant over that 29 years it is being the back-and-forth, to and fro between us as Canadians, and our American friends.

From a Canadian perspective, there is no question Canadians are always navel gazing when it comes to looking at the United States.  They are our greatest trading partners and we are theirs.  Even though China has taken over the top role in the agricultural realm, we are always right there.  However, from a Canadian perspective we always have something to say about our American friends.

Often, it can be uncomplimentary.  Simply put, when you are beside a country over 10 times larger than us, they tend to dictate what happens on this North American continent.  So in trade matters the United States generally gets what they want and sometimes it is that Canadians expense.  I’m not bitter about that; the advantages of being beside the United States are so much greater than any negative.

So this week when I learned that Canada had filed a request with the World Trade Organization to put $3 billion in revenge tariffs on US products over US COOL regulations I took pause.  Do we really want to go there?  I have made the statement in the past that the only recourse any Canadian agriculture minister has when we have a dispute with our American friends is to go to the WTO.  When the COOL legislation came into place it was stunning in its impact on Canadian livestock.  We all felt it was so wrong especially at a time when we had a free trade arrangement with our American friends.  WTO was the way to go and after several years the WTO dispute settlement body will consider Canada’s request on June 17th.

This may be the end of COOL.  If there has ever been a commercial for how difficult it can be to deal with our American friends on a trade issue this might be it.  It was wrong from the beginning and now the WTO has proved that it is wrong and an American debate still rages on what they should do now?  Of course my question is, why not just comply?

Of course there is really no good answer to that question.  Our American friends are not used to losing on this continent, especially when it comes to economic issues.  Our Canadian government said that our livestock industry has lost approximately $3 billion.  Mexico has had similar losses to scale.  Maybe it’s time for the US House of Representatives and the Senate to repeal COOL.

The Canadian agriculture minister Gerry Ritz has been beating the drum on this a little bit to publicly for me.  He has talked about Canadian retaliation many times, something, which is not usually brandished about.  Simply put, it’s not Canadian.  I don’t think he feels the same way about Canadian dairy and poultry products.  With an election coming in October much of the vitriol coming from our Canadian Minister of agriculture is simply political posturing.

The Canadian federal election in October is a very significant event when it comes to our agricultural policy moving forward.  It’s true, with our perceived victory at WTO over COOL; the Conservative government will trump that right up to election day.  However, when it comes to the Trans Pacific Partnership or TTP, you won’t hear a thing about our poultry and dairy markets being opened up to foreign imports.  That will come after the election because it will be incredibly damaging to whoever brings it up first.

Politics will always be part of any debate within agricultural policy.  It is what it is.  However, beef cattle born in Canada but raised and slaughtered in the US versus beef cattle born raised and slaughtered in the United States really should make no difference.  At the end of the day, it’s all beef and we should just enjoy the taste of it.

So let’s hope we can put all of this behind us.  Lets hope there will be no trade retaliation.  Over the last 29 years the US R-Calf people have contacted me in very vitriolic manners many times.  Let’s put an end to that too.  There is no need to sing, Kum Ba Yah.  It’s simply time to move on.  That true continental beef market will be good for everybody.