Edmonton Sun (Alberta, Canada) | By DOUG BEAZLEY | March 24, 2004
American ranchers say they're not planning any trade challenge of Ottawa's BSE bailout for the beef industry - unless it affects their domestic sales.
And the head of a U.S. cattle lobby admits that probably won't happen if the program remains a one-time payout to keep the Canadian industry from collapse.
"If Canada is providing some sort of domestic support that ends up affecting our industry, then yes, we'd consider taking action," said Bill Bullard, CEO of R-CALF USA.
"But if the subsidy ends before the border re-opens to live Canadian cattle, then we'd have to take that into account. If there's no impact on trade, there's no basis for a countervailing measure."
And any U.S. challenge of the bailout under the World Trade Organization (WTO) would be based on some shaky assumptions, said a University of Alberta trade expert.
"My view is that such a challenge would not succeed," said Rolf Mirus, director of the Western Centre for Economic Research. "How could it be considered a countervailable export subsidy if it's not targeted towards exports? Live cattle aren't being exported. If anything, it could be viewed as a social program, a temporary anti-poverty measure - which is protected under GATT (General Agreement on Tariffs and Trade) and the WTO."
But Mirus warns that U.S. commodity lobbies haven't been shy in the past when it comes to launching trade challenges on thin evidence.
The U.S. Department of Agriculture in particular tends to impose temporary import duties on the slightest pretexts, he said. "And this is an election year. Canada could fight it and win at the WTO - but we'd still have to pay the duties in the interim."
Meanwhile, cattle industry spokesmen say they have no quarrel with the portion of the bailout package going to feedlot owners as opposed to ranchers.
"First of all, the number of producers who kept their calves instead of sending them to feedlots last fall was up 60%," said Darcy Davis, vice-chair of Alberta Beef Producers. "By keeping more of their younger stock, they'll get more of the bailout.
"And feedlots are an essential part of the export system. We need them to operate and they can only take so many hits before they start vanishing."Edmonton Sun (Alberta, Canada):
