Gilles Stockton
By Gilles Stockton | 9/11/2017
The discussion over the future of NAFTA is heating up. The commodity organizations deny any problems in the existing agreement and demand no changes, a position no doubt dictated to them by the global Big Ag corporations. The reality that I lived through tells a different story.
Right from the beginning of NAFTA in 1994, Canadian cattle started to be dumped on the US market depressing prices. I don’t need my intuition to tell me that this was true, because it was a finding by the trade authorities that came to light only as a result of legal action taken by R-Calf. Earlier, while NAFTA was in the process of being ratified by Congress, Senator Max Baucus assured me, to my face, that he would fix any problems that arose. Neither he nor Congress, nor the then existing or future Presidents did anything to stop the dumping of cattle in our market.
It was not until 2003 that we got some relief in a backwards sort of way, when a BSE (mad cow) infected cow imported from Canada was discovered. Countries that imported beef from the US banned imports and we in turn stopped live imports from Canada. And guess what, the cattle market jumped twenty five percent (25%) overnight. This showed that not only were Canadian cattle being dumped on our market, they were being dumped in a coordinated manner by the beef packers to control prices paid for cattle. In other words, Canada was one big pool of captive supply cattle, that was being used to manipulate our market.
We could not stay with that happy situation. Using the NAFTA regulations as an excuse we reopened cattle imports from Canada, even though it was clear that they had not eradicated BSE. In essence, we voluntarily adopted Canada’s disease status resulting in more beef on our markets, a continuation of blocked exports to Asia, the risk that an American consumer would contract a fatal brain disease from eating beef from Canada, and of course, lower cattle prices.
In the meantime, Congress, after intense demand from cattle producers and consumers, passed Country of Origin Labeling (COOL). It took more than a decade for the labeling to become a reality as COOL implementation was blocked by the Big Packers, their captive organization the NCBA (National Cattlemen’s Beef Association), Republican Congressional leaders, and the governments of Canada and Mexico. Eventually a NAFTA tribunal declared COOL to be trade illegal and the Republican dominated Congress happily rescinded COOL all together.
So what has NAFTA brought to US cattle producers:
- The manipulation of domestic cattle prices through dumping and enhanced captive supply.
- The introduction of a dangerous disease and the continued negative economic consequence of sharing that disease status even though we had successfully stopped BSE from contaminating the US herd.
- The interference of an international body on an issue which should be our exclusive sovereign right to inform consumers of beef where their food originated.
- A trade deficit of more than $10 trillion over the life of NAFTA
From the perspective of US cattle producers, NAFTA clearly needs to be reformed, if not rescinded altogether. This does not mean that other segments of agriculture and other industries have not had a more positive experience. Montana’s wheat farmers may have had a better situation over all, but I have read articles that suggests that the market for wheat has been all one way – into the US. Somehow Canada manages to keep US wheat out of their market and out of using their market infrastructure.
It bothers me that the NCBA and the Farm Bureau have declared totally in favor of NAFTA as it currently stands, when it is clear that big problems exist. We need better representation then that if this country’s independent cattle producers are to survive. Reinstating COOL would be a good start. This would reestablish the principal of our national sovereignty and allow consumers the choice of supporting American producers.
What COOL will not do is stop the use of Canadian cattle as part of the captive supply manipulation which is killing our markets. That, however, is something we can do all by ourselves by passing the Captive Supply Reform Act. Not only will the Captive Supply Reform Act require packers to publicly bid on domestic fat cattle, it will apply to Canadian imports.
