Agricultural News
R-CALF USA Testifies that Free Trade Agreements Harm U.S. Cattle, Sheep Industries
Tue, 17 Nov 2015 11:21:08 CST
In testimony before the U.S. International Trade Commission (ITC) Tuesday, R-CALF USA CEO Bill Bullard stated the impacts of the Uruguay Round Agreements and the free trade agreements (FTAs) the U.S. has entered with 20 countries are negative for both the U.S. cattle industry and the U.S. sheep industry.
Earlier this year Congress passed the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, also known as trade promotion authority (TPA) or fast track authority. The legislation requires the ITC to submit two reports to Congress on the impacts that trade agreements implemented under trade authorities procedures since 1984 have had on the U.S. economy. The first report to the House Committee on Ways and Means and the Senate Committee on Finance is due by June 29, 2016, and the second by June 29, 2020.
R-CALF USA's testimony was presented during the public hearing conducted by the ITC as part of its formal investigation regarding what impact the Uruguay Round Agreements and the FTAs implemented with 20 countries have had in various sectors of the U.S. economy since 1984.
Bullard said he welcomes the investigation and hope it will dispel the deep-rooted myths by the industrial meat complex that have caused independent cattle and sheep producers to support trade policies that actually harm their economic interests.
"The myths are trade deficits don't matter, imports don't matter, and exports are all that matter," Bullard said.
Bullard's testimony showed that since the mid-80s, the U.S. cattle industry has suffered a cumulative trade deficit of $46.1 billion in the trade of cattle and beef with the 20 FTA countries. "Net exports strengthen economies and net imports weaken them," he said adding, the persistent deficits suffered by the U.S. cattle industry has weakened it significantly."
He said that during the period under investigation, over half a million cattle producers exited the industry, the U.S. cow herd shrank to the smallest size in over 70 years, and domestic beef production from cattle born and raised in the U.S. has become stagnant.
His testimony cites economic modeling work by John VanSickle, Ph.D., University of Florida, indicating that every $1 decline in cattle prices caused by imports will have a $3.87 impact on total economic output and every million dollars in cattle or beef sales is associated with 43.5 jobs.
Based on VanSickle's modeling results, Bullard estimates that the increase in imports from 2013 to 2014 alone caused the U.S. cattle industry to suffer $3.1 billion in losses. "Our industry's $46.1 cumulative deficit caused a cumulative loss to producers of $225 billion that would not have occurred if we had balanced trade," he asserted.
Bullard told the ITC it should be self-evident that lower priced imports cause depressed domestic prices. He presented a chart showing how the U.S. sheep industry has succumbed to lower priced Australian lamb carcasses. "Our commercial sheep industry has been devastated by FTA trade and we now rely more on imports than our beleaguered sheep industry is able to produce."
Bullard does not dismiss the importance of exports to the beef industry, but he said they are not the controlling factor on the wellbeing of producers that the industrial meat complex wants producers to believe.
"Our cattle industry prices are ultra-sensitive to changes in supplies so the positive impacts of expanding exports are quickly overtaken by the negative impacts of even more expansive imports," Bullard said.
Bullard said the U.S. errored in several ways when it entered all of the FTAs currently in place.
"We prematurely lowered tariffs and we should never have lowered our health and safety standards; we should never have ceded our sovereignty by agreeing to abide by a non-judicial international dispute process; and we failed to include any automatic safeguards in any of the FTAs to reflect the import-sensitive natures of our domestic cattle and sheep industries."
For a copy of R-CALF USA's testimony and slide presentation to the U.S. International Trade Commission, click here.
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