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What Have We Learned From Cattle/Beef Disputes?

What Have We Learned From Cattle/Beef Disputes?. R.M.A. Loyns Linda M. Young Colin A. Carter. Cattle and Beef Trade Issues and Incidents. Value of U.S. Imports and Exports. Net Imports from Canada and Mexico, Cattle and Beef Pounds as % of U.S. Beef Supplies.

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What Have We Learned From Cattle/Beef Disputes?

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  1. What Have We Learned From Cattle/Beef Disputes? R.M.A. Loyns Linda M. Young Colin A. Carter

  2. Cattle and Beef Trade Issues and Incidents

  3. Value of U.S. Imports and Exports

  4. Net Imports from Canada and Mexico, Cattle and Beef Pounds as % of U.S. Beef Supplies

  5. U.S.-Canadian Trade in Live Cattle Note: January–November 1999.

  6. U.S.- Canadian Trade in Boxed Beef Note: U.S. Imports from Canada, January–November 1999.

  7. U.S.-Canadian Slaughter Prices, 1980-1998

  8. U.S. Cattle Trade with Mexico, 1988-1998

  9. U.S. Boxed Beef Exports to Mexico, 1988-1998

  10. US Trade Remedy Legislation • Section 701 Subsidization/CVD • Section 731 Dumping/ADD • USDOC/ITA • USITC

  11. Duty Imposition • Finding of subsidization or • Finding of dumping plus • Injury • volume of imports • effects on U.S. prices • effects on domestic producers

  12. The R-CALF Dispute • Petitions filed November 12, 1998 • Canada subsidizing cattle exports • Canada dumping cattle • Mexico dumping cattle • Investigations initiated December 1998

  13. R-CALF • Ranchers - Cattlemen Action Legal Foundation • “A grassroots non-profit corporation to initiate actions in retaliation to U.S. Trade Regulations and Trade Relief Laws” • Issues • depressed prices • imports • dissatisfaction with several groups and institutions

  14. Investigations • Live cattle for slaughter • October 1997 - September 1998 • Alberta, Saskatoon, Manitoba, Ontario • 30 Federal/provincial programs including CWB

  15. Mexican Action • Terminated January 1999

  16. Dumping Margins, June 30 and October 12

  17. Countervail Action on Canada • January: Probable injury • May: (0.389) subsidies de minimis • October: (0.77%) subsidies de minimis • CWB not subsidizing • Terminated • Costs

  18. AD Action on Canada • January: Probable injury • March/May: Costs/revenues analysis • June: Dumping margin • October 12: Revised • November 19: Final Determination

  19. …that an industry in the United States is not materially injured or threatened with injury, and the establishment of an industry in the United States is not materially retarded, by reason of imports from Canada of live cattle,…..,that have been found by the Department of Commerce to be sold in the United States at less than fair value (LTFV). (USITC, Determination and Views of the Commission. Investigation #731-TA-812 (Final)) ….I find that the domestic industry would not have increased its prices or its output and sales, and therefore its revenues, significantly, had the subject imports been fairly traded. Therefore, I find that the domestic industry would not have been materially better off if the subject imports had not been dumped. (Commissioner Crawford) Decision Wording

  20. Evidence on 701/731 Application • Schmitz, et. al, AJAE 1981 • tomatoes • Stiglitz, 1997. “Since it is relatively easy to show that a foreign firm has been subsidized in some way, the countervailing duty laws have become a populist sibling to antidumping laws.” • Bovard, 1991. “If the same antidumping laws applied to U.S. companies, every after-Christmas sale in the United States would be banned.”

  21. Evidence on 701/731 Application (continued) • Coughlin, 1991. “Overall, the evidence is that trade-remedy laws hinder rather than facilitate free trade. U.S. fair trade laws can be more accurately characterized as the bedrock for protectionism rather than the bedrock for free trade. As such, trade remedy laws need to be remedied by eliminating the bias toward protection of domestic producers.”

  22. Some Considerations • A well-functioning, open market was found to have generated unfair trade • R-CALF was played outside of NAFTA influences • Apriori economic evidence • USITC, 1993 and 1997 • Holder, USDA, August 1998 • Mintert, KSU, August 1998 • Brester and Marsh, MSU 1999 • U.S. producers were selling below cost • NCBA, reluctant, did not support cvd

  23. Further Considerations • CWB controversy: subsidy?? • who? timing? • Subsidization and the feeder market • Process costs • Market costs • Relations/trade harmony

  24. Conclusions

  25. Trade Remedy Laws vs. Harmony NAFTA first action protocol Economic Science Based Rules TR Laws, last resort Do we need protocol against frivolous and harassment actions liability for market losses and process costs more cross-border organizations and communication Achieving Trade Harmony

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