Submitted by Will Verboven Ahead of the Heard
It was a small news item, referring to a recent decision by the Canadian government to formally drop a long-standing trade dispute it had won against the European Union.
Almost no commentary has come from the Canadian cattle and beef industry on the decision – probably for good reason – as it is another defeat for Canada in this ongoing trade dispute. The dispute is almost 30 years old and was started by the EU when it prohibited the importation of Canadian beef raised with supplemental hormones. The ban had no basis in science and was a blatant non-tariff trade barrier to keep North American beef out of the highly protected and subsidized EU beef market. It took almost 20 years through a protracted WTO process to prove Canada and the USA right, but the EU still refused to comply even though retaliatory trade measures were granted to both countries. But then you probably know most of that sad story as it has been written about for many years. Crafty EU trade negotiators then decided to see if they could buy-off Canada and the USA. They offered the Americans increased beef quota access to the EU market if it was hormone-free. That worked for the US as they dropped their hard-won retaliatory rights and saw their beef exports soar from $10 million to almost $300 million. Canada did not drop its hard-won rights as it had begun the lengthy process for a free-trade agreement with the EU. I guess the idea was that such an agreement would resolve the beef dispute to everyone’s satisfaction. Little did our seemingly gullible government trade officials understand the determined treachery of nefarious EU officials.
The EU did offer Canada a similar deal to what the US agreed to drop or suspend their WTO retaliatory actions. Canada did agree but crafty EU bureaucrats placed a number of technical and marketing hurdles and traps in the agreement which effectively prevented any increase in Canadian beef imports. The Canadian beef industry was outraged with this EU deceitfulness but hoped that the EU/Canada free trade discussions would resolve the matter in Canada’s favour. That turned out to be wishful thinking. Canadian officials in their eagerness to reach an overall free trade agreement did not nail down the beef trade details and left them to be resolved by officials after the agreement had been signed. That has now become a sore point as EU officials, true to form, continued to thwart Canadian beef imports through many technical barriers related to processing and procurement. There appears to be no quick way to resolve this matter as the Canadian government seems loathe to trigger any dispute resolution protocol so soon after the treaty has come into effect. One suspects that in a desperate hope to mitigate the impasse the Canadian government offered to drop the original WTO trade decision that was in Canada’s favour. It may all have been a formality, but such a nice-guy approach has only emboldened devious EU trade officials (hence Canadian cattle industry silence on the decision). The trade impasse is so bad that Canadian cattle producers and large beef processors have no plans to gear up any production to increase exports to the EU. It just isn’t worth the hassle or cost, even if they did it would take two years for those specific EU destined beef exports to be ready. EU officials must be chortling in their victory.
But there is more – in the 1990’s Canada won a countervail trade action against subsidized Irish beef imports. The new EU/Canada free trade agreement now makes such trade action almost impossible. In fact, the agreement allows for unlimited and unfettered access to the Canadian market for EU beef. I expect that meat brokers are probably looking for opportunities to resume that Irish beef import trade. One ponders whether Canadian trade officials will allow Irish imports to resume considering all the quota and technical barriers the EU has erected against Canadian beef imports. I suspect they will – being that’s the Canadian boy scout approach to trade dealing. Giving up the WTO retaliatory rights granted to Canada by the WTO is a classic example of that approach. There is every danger that history will repeat itself soon when it comes to this issue. Ten years ago, the EU agriculture commissioner stated to your humble columnist that the EU would never allow more unrestricted access to the EU market by Canadian beef – so far that intransigence has proven quite true.