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Global Export Markets- Global Competition? April 27, 2003

Global Export Markets- Global Competition? April 27, 2003. Phil Seng President, International Meat Secretariat President and CEO, U.S. Meat Export Federation. IMS. USMEF Structure. Public-private sector cooperation Multi-species Beef Pork Lamb Multi-segment

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Global Export Markets- Global Competition? April 27, 2003

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  1. Global Export Markets- Global Competition?April 27, 2003 Phil Seng President, International Meat Secretariat President and CEO, U.S. Meat Export Federation

  2. IMS

  3. USMEF Structure • Public-private sector cooperation • Multi-species • Beef • Pork • Lamb • Multi-segment • Producers & producer checkoffs/groups • Packers/processors • Purveyors/traders

  4. USMEF Strategy • Putting U.S. Meat On The World’s Tables, through: • Market Access • Market Presence • Buyer Education & Loyalty • Trade Support • Total Carcass Utilization • Industry/Product Image • Food Safety

  5. USMEF Worldwide St. Petersburg London Denver Moscow Tokyo Seoul Osaka Monterrey Beirut Mexico City Shanghai Guangzhou Taipei Caracas Hong Kong Singapore Sao Paulo

  6. Presentation Overview • Macro trends in the global meat sector • Prospects for the WTO Negotiations • New Trade Barriers • New Problems, New Solutions

  7. World Population Growth Source: FAO

  8. Average Per Capita GDP (World) Source: WEFA/DRI

  9. U.S. Meat Consumption Source: FAO

  10. World Beef Production Source: FAO

  11. Major Beef Producers 2002 Source: USDA

  12. Global Beef Consumption Source: FAO

  13. World Beef Trade Source: FAO

  14. Major Beef Exporters 2001 Source: WTA/FAO

  15. World Trade in Beef as a Percent of Production Source: FAO

  16. WTO Negotiations: US Proposal • Export Competition • Eliminate export subsidies and STE • Market Access • Reduce average agricultural tariff to 15% with no tariff exceeding 25% • Increase Tariff Rate Quotas by 20% • Domestic Support • Limit trade-distorting support to 5% of the value of agriculture production

  17. Proposed Tariff Reductions

  18. Proposed Domestic Support Reductions

  19. Export Subsidies Source: OECD

  20. The Impact of EU Export Subsidies EU Market Share in the Philippines Source: World Trade Atlas

  21. Tariffs Hinder Market Access • Japan: Largest market for U.S. beef • Beef tariff equals 38.5% • Japan Safeguard will raise tariff to 50% • USMEF estimates that U.S. beef exports to Japan grew 3% for every 1% drop in the tariff (1995-2000) • Korea: #3 Beef market • Beef tariff exceeds 40%

  22. Domestic Farm Subsidies Producer Subsidy Equivalent by Country, 1986-88 vs. 2001p Label indicates percent decrease from ‘86-’88 to 2001p Source: OECD

  23. WTO Agriculture Chairman Harbinson’s Proposal • Export Competition • Calls for the eventual elimination of export subsidies. Real debate is over how quickly • Market Access • Calls for a minimum 45 percent cut for tariffs over 90 percent- far short of the US proposal • Domestic Support • Fails to rectify the imbalance. It would bring total U.S. support down to just over $12 billion while the EU would be allowed to spend at least $32 billion

  24. Magellan Project:The Gains from Beef Trade • Estimates of Annual Producer Gains from Various Trade Scenarios • Free Trade: $4 billion • Cairns Proposal: $3 billion • US Proposal: $2.3 billion • EU Proposal: $1 billion

  25. New Trade Barriers • As traditional methods of protection fall, countries find other ways to protect their domestic industries • Unscientific sanitary standards • Hormone ban, disease restrictions, zero tolerance, residue testing

  26. Hormone Bans in 1990

  27. Hormone Bans in 2002:In Place or Potential Countries represent 40% of global beef eating population

  28. New Trade Barriers • Technical barriers • Burdensome paperwork, slow approvals, plant inspections, COOL • Anti-dumping measures • Traditionally used by developed countries • Developing countries starting to use

  29. As Tariffs Fall…Other Measures Rise Average Tariffs and Antidumping Measures (nontraditional users, 1987-1999) Source: Cato Institute

  30. New Trade Barriers • “Positive” Discrimination • Capitalizing on food safety fears

  31. Korea: Beef “Safe-to-Eat” Ratings Scale is1 to 5 with 5 being the highest

  32. BSE Reaction in Japan • According to a Fall 2002 survey of Japanese consumers, the primary consideration for purchasing beef is that it be domestic

  33. New Trade Barriers • “Positive” Discrimination • Capitalizing on food safety fears • Consumers tend to believe the worst about imported food • Competing on food safety harms all exporters

  34. Low Beef Demand in Taiwan • Beef Consumption in Taiwan is very low • 2.75 kg/person in 2001 • 1/3 of consumers do not eat beef Source: USMEF Research

  35. A New Approach • “Coopetition” • Cooperating to create a bigger pie, while competing to divide it up.

  36. Taiwan Beef Alliance: “Coopetition” • Goal: to increase overall beef consumption • “Rising tide raises all ships” • Joint effort with Australia and New Zealand • Campaign focused on nutrition in Kaohsiung

  37. Beef Alliance Logo & Slogan Focus on Nutrition: According to a 2001 USMEF Beef Consumer Survey, 93% consumers interviewed agree beef is “Healthy and Nutritious”. Slogan: Easily supplement iron starting with beef!!!

  38. Taiwan Beef Alliance • Campaign resulted in increased awareness of the nutritional benefits of beef • Partners expanding campaign in Phase II • Canada added as a partner country

  39. Concluding Thoughts • The world market for our products is growing • We have cooperated in opening these markets for half a century • We should continue to cooperate in non-traditional ways to “raise all ships”

  40. Concluding Thoughts • Consumer pressure to show livestock/meat produced/processed in a safe and hygienic manner • Consumers want judicious use of compounds, responsible application, Good Production Practices (GPP) and Good Manufacturing Practices (GMP) • Proof through traceability

  41. Australian FTA:U.S. Points of Contention • Debate surrounds Australian SPS measures • Beef not allowed for import until 30 days after slaughter • U.S. uncooked pork banned due to presence of PRRS in U.S. herd despite lack of scientific evidence to support the ban • Other U.S. agricultural products lack access • Prolonged risk assessments

  42. Australian FTA:Aussie Points of Contention • Australian beef exports to the U.S. constrained by tariff rate quota • Australia has filled TRQ last two years • Australian Feeder Cattle Imports • Country of Origin legislation

  43. Resolutions/Positive Outcomes • Science-based SPS measures • Elimination of U.S. Beef TRQ • Cairns/US proposals only call for increasing TRQs with eventual elimination • Eliminating U.S. TRQ would result in dramatic increase of market access for South American beef • Non-Oceanic countries account for less than 10% of U.S. beef TRQ

  44. U.S. Imports of Australian Lamb

  45. U.S. Imports of Australian Beef

  46. U.S. Exports of Red Meat to Australia

  47. Thank You • U.S. Meat Export Federation • www.usmef.org

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