Impaired Free Trade
Actually is there anything that is truly free other than the air we breathe? Isn't there always a catch somewhere in there when we speak of 'free'? There is free and there are freedoms and and there is that not-so-old adage of no free lunches. And when countries seek to advantage themselves (primarily) by hammering out free-trade agreements, setting down legal parameters and priorities, what to do when one of the partners is clever enough to circumvent, powerful enough to get away with it?
Grin and bear it, one supposes. And really, who can blame them for attempting to protect their own against the inroads of outsiders? Human nature coming into play as it always does. Despite attestations to the contrary, it always does. When the world's leaders met in an effort to present a united front against the global economic downturn they all gave lip service to the need for co-operation, and to resist the evil of protectionism.
Wink-wink. Anyway, here we are once again, re-visiting, as it were, the North American Free Trade Agreement. As in someone's getting shafted again, and it isn't the Big Boy, it's his little brothers. And let's face it, there will always be a way for any group determined enough to wiggle out of any agreement, legalities aside, by clever manipulation.
We're speaking here of the United States, and its partners in trade - free trade - Mexico and Canada. Getting, of course, the short end of the stick that the U.S. uses as a cudgel from time to time. The Consumer Federation of America insisted Americans would be better served if they knew where their food came from. "The bottom line is some people want to buy from American producers" went the line.
So something called Country of Origin-Labelling was devised, with application to packaging of fresh beef, pork, lamb, goat and chicken. It originally came up under the previous Bush administration, and Canada thought it had a special deal that might alleviate the burdens that implementation of COOL would represent to the Canadian beef and hog industry.
Wrong. Because COOL was implemented last month, and henceforth that law requires all labels on supermarket packages of meat and other foods to list all the countries of origin. Concerns erupted, it was explained, in the wake of dairy-product contamination with melamine, coming out of China. Consumer advocates claim this will greatly aid consumers to make informed choices.
Livestock producers and industry experts feel consumers don't really care all that much about derivation of the product. They're more sensitive to pricing. And there will be additional costs relating to handling that will do damage to the meat industry. "I just think retail customers are not going to care, so retailers are not going to care, so packers are not going to care" according to an economist for a livestock consulting company.
Beef and pork companies who buy cattle and hogs from producers who may have acquired them elsewhere again, including from Canada or Mexico are hugely affected by the new paperwork required to highlight country of origin. Canadian and Mexican cattle and hogs have traditionally been marketed to the U.S. where they're fattened and slaughtered in American meat plans.
Now both countries are seeing those markets evaporate because the largest processing corporations in the United States have decided to stop buying overseas hogs and cattle, or are in the process of phasing out the purchases. Resulting, thus far, in a 50% drop in business for foreign products into the U.S. Canada and Mexico have both decided to take their case around these new restrictions to the World Trade Organization.
NAFTA was, of course, implemented fifteen years ago for the specific purpose of facilitating trade and services between the three countries inhabiting North America. Concerns rest not only with Canadian and Mexican producers, but American ones as well. There are worries that this kind of outright protectionism will result in price discounting.
"I think the unfair trade practises are turning the integrated North American hog market in turmoil" said chairman of the Canadian Pork Council. Without the five to ten million Canadian hogs brought into the U.S. market each year, American pork plants may not have sufficient animals for efficient operation.
"Long term", he said, "it is going to end up shutting down some U.S. pork plants and putting more Americans out of work. Short term, it is going to put some hog farmers in Canada out of business." Agriculture economist Ron Plain at the University of Missouri is in agreement, predicting the closure of at least one American plant, the very plant that processes most Canadian hogs.
"It is protectionism at its worst - without understanding what the ramifications are", according to the chairman of the Canadian Pork Council. "...you can't willy-nilly come up with laws that violate trade agreements". "It is not that country-of-origin labelling per se is the problem; current regulatory framework is incompatible with U.S. treaty commitments", U.S. trade lawyers concluded.
There's a certain irony here. During the presidential electioneering campaign, candidate Barack Obama promised to open NAFTA to better serve the United States' interests and that of its workers. When, as president, Mr. Obama visited Ottawa in February, he spoke glowingly about "growing trade" between his country and Canada.
Well, that's how it goes, when a powerful country deals with others rather less able to fend for themselves in their reliance on the goodwill and co-operation of a neighbour. One who really isn't as dependent on trade as they are. For Canada and Mexico trade is critical; for the U.S. far less so.
But then it's difficult to predict how things will play out. Take, for example, traditional Canadian hair-pulling about American buy-outs of Canadian companies. Canadians shrill about American investment in Canada, claiming the country is being bought out by their neighbours. Well, surprise; Canada has posted its first direct investment surplus with the United States.
Despite an economy ten times that of Canada, direct Canadian investment in the U.S. stood at $17.1-billion over last year. The year before, the balance of investments saw the U.S. in a $62.1-billion surplus. "We are seeing the beginning of Canadian corporations being successful at expanding beyond their borders", said the University of Toronto's Joseph Martin.
Go figure.
Grin and bear it, one supposes. And really, who can blame them for attempting to protect their own against the inroads of outsiders? Human nature coming into play as it always does. Despite attestations to the contrary, it always does. When the world's leaders met in an effort to present a united front against the global economic downturn they all gave lip service to the need for co-operation, and to resist the evil of protectionism.
Wink-wink. Anyway, here we are once again, re-visiting, as it were, the North American Free Trade Agreement. As in someone's getting shafted again, and it isn't the Big Boy, it's his little brothers. And let's face it, there will always be a way for any group determined enough to wiggle out of any agreement, legalities aside, by clever manipulation.
We're speaking here of the United States, and its partners in trade - free trade - Mexico and Canada. Getting, of course, the short end of the stick that the U.S. uses as a cudgel from time to time. The Consumer Federation of America insisted Americans would be better served if they knew where their food came from. "The bottom line is some people want to buy from American producers" went the line.
So something called Country of Origin-Labelling was devised, with application to packaging of fresh beef, pork, lamb, goat and chicken. It originally came up under the previous Bush administration, and Canada thought it had a special deal that might alleviate the burdens that implementation of COOL would represent to the Canadian beef and hog industry.
Wrong. Because COOL was implemented last month, and henceforth that law requires all labels on supermarket packages of meat and other foods to list all the countries of origin. Concerns erupted, it was explained, in the wake of dairy-product contamination with melamine, coming out of China. Consumer advocates claim this will greatly aid consumers to make informed choices.
Livestock producers and industry experts feel consumers don't really care all that much about derivation of the product. They're more sensitive to pricing. And there will be additional costs relating to handling that will do damage to the meat industry. "I just think retail customers are not going to care, so retailers are not going to care, so packers are not going to care" according to an economist for a livestock consulting company.
Beef and pork companies who buy cattle and hogs from producers who may have acquired them elsewhere again, including from Canada or Mexico are hugely affected by the new paperwork required to highlight country of origin. Canadian and Mexican cattle and hogs have traditionally been marketed to the U.S. where they're fattened and slaughtered in American meat plans.
Now both countries are seeing those markets evaporate because the largest processing corporations in the United States have decided to stop buying overseas hogs and cattle, or are in the process of phasing out the purchases. Resulting, thus far, in a 50% drop in business for foreign products into the U.S. Canada and Mexico have both decided to take their case around these new restrictions to the World Trade Organization.
NAFTA was, of course, implemented fifteen years ago for the specific purpose of facilitating trade and services between the three countries inhabiting North America. Concerns rest not only with Canadian and Mexican producers, but American ones as well. There are worries that this kind of outright protectionism will result in price discounting.
"I think the unfair trade practises are turning the integrated North American hog market in turmoil" said chairman of the Canadian Pork Council. Without the five to ten million Canadian hogs brought into the U.S. market each year, American pork plants may not have sufficient animals for efficient operation.
"Long term", he said, "it is going to end up shutting down some U.S. pork plants and putting more Americans out of work. Short term, it is going to put some hog farmers in Canada out of business." Agriculture economist Ron Plain at the University of Missouri is in agreement, predicting the closure of at least one American plant, the very plant that processes most Canadian hogs.
"It is protectionism at its worst - without understanding what the ramifications are", according to the chairman of the Canadian Pork Council. "...you can't willy-nilly come up with laws that violate trade agreements". "It is not that country-of-origin labelling per se is the problem; current regulatory framework is incompatible with U.S. treaty commitments", U.S. trade lawyers concluded.
There's a certain irony here. During the presidential electioneering campaign, candidate Barack Obama promised to open NAFTA to better serve the United States' interests and that of its workers. When, as president, Mr. Obama visited Ottawa in February, he spoke glowingly about "growing trade" between his country and Canada.
Well, that's how it goes, when a powerful country deals with others rather less able to fend for themselves in their reliance on the goodwill and co-operation of a neighbour. One who really isn't as dependent on trade as they are. For Canada and Mexico trade is critical; for the U.S. far less so.
But then it's difficult to predict how things will play out. Take, for example, traditional Canadian hair-pulling about American buy-outs of Canadian companies. Canadians shrill about American investment in Canada, claiming the country is being bought out by their neighbours. Well, surprise; Canada has posted its first direct investment surplus with the United States.
Despite an economy ten times that of Canada, direct Canadian investment in the U.S. stood at $17.1-billion over last year. The year before, the balance of investments saw the U.S. in a $62.1-billion surplus. "We are seeing the beginning of Canadian corporations being successful at expanding beyond their borders", said the University of Toronto's Joseph Martin.
Go figure.
posted by Pieface | 6:01 PM
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