Americans Argue Over COOL: Canadian Farmers Must Adapt

In Canada many people are thinking, how can one man make such a difference?Â The man of course is Barack Obama and the difference of course is the kinder and gentler United States.Â Even when he said this past week, “I screwed up,” it was like a Calgary “Chinook” on a cold February day.

Needless to say, I was a fan of George W. Bush.Â I’m sure some of you just lost your appetite over that one.Â However, just like Sarah Palin, I thought he was panned too many times by a media, which now is fawning over Barack Obama.Â Needless to say, all of this means nothing in Canadian farm country unless the rubber hits the road.Â In other words, consistently irritating Canada US border issues need to be cleared up.Â Canadian hogs and cattle are set to cross that border in increasing numbers.

It is truly a paradox.Â The Canadian US border means so much to Canadians but doesn’t really register on most American’s radar screens.Â Putting myself in American shoes for a moment, that’s always been a bit hard to understand.Â With Canada being the US’s biggest trading partner, you’d think it would resonate.Â However, it clearly doesn’t.Â Call it apathy if you want, but in essence whatever it is, it often causes problems, which backs up on Canadian farms.

The COOL regulations proposed in last year’s farm bill has been one of those problems.Â Simply put, with American meat processors required to label pork and beef from their “country of origin”, suddenly there was a “non-tariff” barrier to trade.Â American processors, who had always bought Canadian pork and beef, would now have to potentially segregate, raising their costs substantially.Â The default mechanism, of course is not to buy Canadian pork and beef.Â That is exactly what has been happening.Â It’s backed up into Canadian farm country.

Of course the question is what is the right answer to this?Â From a Canadian perspective, we hunker down behind the North American Free Trade Agreement (NAFTA) and look for our continued “inherent traditional right” to export to our American friends.Â However, from an American perspective that doesn’t quite add up.Â Our American friends have always had an isolationist bent in their society and it lives to this day.Â For instance the latest $900 billion stimulus bill currently in the US Senate has been hung up the last few days, because President Obama and others want the “buy American” stipulations changed to reflect trade obligations.Â Nonetheless, many of our American friends disagree with that, and the fight continues.

Last month the final USDA “COOL” rules were modified to allow a greater flexibility on the label for meat from Canada and Mexico.Â The Canadians withdrew their WTO complaint, but they kept their powder dry.Â The Obama administration is currently looking at the COOL requirements once again.Â We’ll see if US agriculture secretary Tom Vilsack changes the rules once more.

There are heated opinions on both sides of the border.Â For instance some of the most vitriolic criticism I’ve ever received regarding this column have been from Montana and North Dakota.Â I have a deep respect for American R-Calf members because they defend themselves and their industry vehemently.Â They certainly have taken a few strips off me through the years when I defend Canadian livestock interests.Â So the stakes are high and the present political environment doesn’t change any of that.

In a perfect world none of this would happen. If “free enterprise” reined we’d have none of this.Â However, this world it what it is.Â For instance do American consumers win with these proposed rules?Â Does it cause more unemployment in American circles?Â At the same time, does the Canadian livestock sector, long weaned on that big welcome American market have to adjust both now and in the future based on this new found American protectionism?

In my mind it makes sense to play within the rules of international trade agreements.Â However, we all know that is imperfect and when it comes to the last Doha round, down right impractical.Â That’s why in this case NAFTA is so important.Â Needless to say, in the end that won’t matter as much as Canadian farmers will want it to.Â Our American friends like to win and on this continent they always do.Â Making the second best arrangement with an American government is always a Canadian government’s first option.

The examples of that are legion, PEI potatoes, Canadian beef post Mad Cow, Ontario corn countervails, and the list goes on and on.Â With President Obama currently reviewing the COOL requirements and American livestock groups mobilizing, don’t expect that to change now.Â Living on the same continent with our American friends is a luxury.Â Canadian agriculture has surely benefited.Â However, in 2009 and beyond don’t ever expect an unimpeded seamless ride into their market.Â Those days are over, but our agricultural economic adjustment will continue into perpetuity.

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