Thread: Canadian farmers COOL to US protectionism

Fighting COOL is the first priority for Canada

Canadian farmers COOL to US protectionism

Troy Media
Wednesday, September 9, 2009
By Dr. Milton Boyd

Struggling US livestock producers - hit hard by the recent economic downturn and the drop in demand for meat in the United States - have spurred recent trade protectionism measures, including country of origin labelling regulations (COOL), that essentially require US meat processors to segregate live Canadian cattle and hogs from US animals.

Any packages containing Canadian meat must be labelled as such, but this separate labelling has been costly for most U.S. processors who have consequently been unwilling to accept Canadian animals at all.

COOL has resulted in a tightened, protectionist border. Canadian hog exports to the U.S. for market pigs have dropped to 585,000 pigs from January through June. That compares to 1.4 million for the same period a year earlier—about a 60% drop.

At $100 per hog market value, this loss is around $81.5 million, or $163 million over a full year (not to mention a 30% drop in feeder pig exports). Also, slaughter-cattle exports are down 20% and feeder-cattle exports are down by 50%.

In May 2009, Canada requested a WTO consultation to object to the U.S. regulations. While the U.S. administration and Democrats in the House and Senate talk free trade, their actions have been the opposite and have restricted trade.

These restrictions are being championed by a small number of U.S. agricultural producer groups, primarily R-CALF and the National Farmers Union—U.S. agriculture groups who represent only a minority of farmers but who successfully lobbied the U.S. government to impose the COOL regulations.

Part of the dispute is related to the new U.S. secretary of Agriculture who has decided to aggressively enforce the country of origin labelling.

But this isn’t surprising, since Barack Obama and Hillary Clinton (currently the US Secretary of State) both stated in last year’s presidential debates they would consider renegotiating NAFTA and were supported by anti-trade groups. This is in contrast to the Bush administration that mostly let trade flow freely.

Keeping U.S. and international markets open for Canadian livestock is especially important for the financial survival of Canadian producers. They have been hit hard by high feed-grain prices driven up by U.S. ethanol policy, weak livestock prices, a strong Canadian dollar, “mad-cow diseaseâ€

An in-depth study of the effect of Smoot-Hawley on the Great Depression will reveal that it had no impact at all since at the time only 5% of the US economy involved foreign imports.

There's no reason at all to import pigs tariff-free or regulation-free or label-free when we have more American-grown pigs than we can eat. I'm sorry for the Canadians, since I never like to see anyone lose money, but our obligation is to protect the American Farmer, and the American Slaughterhouse, to the best of our abilities.

I support restoration of protected trade policies that balance our balance of payments, which means we need to regulate imports so that the amount imported is equal to the amount exported, and hopefully develop a surplus where we export more than we import.

And there is no reason whatsoever to cry for Canada with respect to protecting our trade because we had a -$78 billion trade deficit with Canada in 2008 which means they exported $78 billion more in goods to the US than they bought from the US in return. Something is very wrong with that picture and must be corrected. Same with Mexico and China and the rest of the countries we're subsidizing by destroying our own economy.

http://www.census.gov/foreign-trade/bal ... .html#2008

In 2008, we had a worldwide -$840 billion trade deficit in goods which means we imported $840 billion more in imported in foreign-made products than we exported in US made products. That is totally unacceptable, because that is $840 billion worth of US jobs, incomes, and money supply that we just laid on the bonfire of free trade for no valid reason at all.

You can see the demise of the US economy by looking at these historical foreign trade statistics:

http://www.census.gov/foreign-trade/sta ... /gands.txt

It's sad, it's tragic, it's unacceptable, and it must be reversed immediately.

Canada is in a much better economic situation that we are in presently.

Originally Posted by ELE

Canada is in a much better economic situation that we are in presently.

Yes they are indeed, ELE, because they have a trade surplus with the US. There's no reason for that. We should have a trade surplus with Canada instead of a $78 billion trade deficit.

Protectionism regulates our international trade. Free Trade gives away our economy. Under protected trade, we still do enormous international trading, but not to the point where it's sucking jobs and money out of our economy. Under protected trade, there will be variations in the balance of payments, some years about equal, some years a little surplus, some years with some countries a little deficit, so it ebbs and flows a little based on how the free market responds to the protective tariffs, quotas and regulations, but it protects our economy overall, which is vital to restoring economic and financial solvency to our economy condition.

If we balance just our deficit in goods, we'd create 30 million new jobs in the US. If we balance just our deficit in goods by $840 billion a year, the 2008 trade deficit in goods, we would eliminate underemployment, reduce broad unemployment from the current 16.8% to 1 to 3% and reduce poverty from over 13% to less than 4%.

Imagine how much that would change life in America for 30 million Americans and their families?

Then if we pass the FairTax and stop illegal immigration, they would go home with all their earnings free of federal income taxes, government spending would reduce by its natural course because there were be less people in need of assistance and publicly funded services, and wages, salaries and benefits would increase by their natural course. Under the FairTax, employers no longer pay federal income-based or payroll taxes, so they would not only have new strong markets to supply they would have all their earnings as well to pay improved wages and benefits to their workers.