Export Market Access

Status of the Agricultural Market Access Secretariat (AMAS) Spearheaded by CCA and other red meat organizations, the secretariat gained momentum through the Beef Value Chain Roundtable (BVCR) - co-chaired by CCA’s Executive Vice-President, Dennis Laycraft. In January 2009, Minister of Agriculture and Agri-Food, The Honourable Gerry Ritz, accepted the proposal and quickly moved on it.

The 25 key recommendations we developed with our partners for “Enhancing Canada’s Technical Market Access Capabilities for Agriculture,” provide a comprehensive roadmap for secretariat staff to aggressively and strategically work full-time to secure access to international markets. Collaborating closely with industry and government, AMAS’ trade experts will ensure cohesion of trade initiatives that effectively eliminate technical barriers and promote agricultural exports worldwide.

Quick progress has been made on the creation and roll-out of AMAS. CEO, Fred Gorrell, is laying groundwork for the secretariat he characterizes as belonging to industry and government.

US Country of Origin Labelling (COOL) and the WTO challenge Over the past year, Canadian cattle producers lost over $250 million due to lower cattle prices and increased costs since COOL came into effect.

In conjunction with the Canadian Pork Council, we developed the legal opinion in 2007 that supported the Government of Canada’s initiation of a World Trade Organization (WTO) case against the US on the discriminatory nature of the COOL requirements that went into effect fall 2008. As a result, some flexibility appeared in the final rule that went into effect March 16, 2009, yet the underlying COOL legislation remains discriminatory.

On November 19, 2009, the WTO established a Dispute Settlement Panel at the request of Canada and Mexico. The Panel will rule on COOL and determine whether it is in violation of the US’ trade obligations. The WTO process takes a long time to work through, but we believe no other option exists. We met with US officials in Washington several times, but sense no interest from lawmakers to resolve this issue. Since Canada is the best customer of the US, it is unfortunate that we need to take this step. A panel ruling from the WTO may motivate US lawmakers to resolve this problem.

Russia - Russia announced it will expand access for Canadian beef to include all beef from cattle Under-Thirty-Months (UTM) old and boneless beef from cattle Over-Thirty-Months (OTM) of age. Russia also agreed to continue a process aimed at achieving access for beef offal products by the end of 2009. The Canada Beef Export Federation estimates that Canada could export $32 million per year of beef, and a further $10 million for beef offals, to Russia.

European Union (EU) – The launching of negotiations toward a comprehensive free trade agreement between Canada and the EU this year is one of the most important, new trade initiatives in several years. CCA is seeking the full elimination of Europe’s prohibitive tariff on Canadian beef as well as resolution of technical issues. We are cautiously optimistic that this is achievable. While the negotiations are in early stages and it could take a year or more to complete, political support from the cattle industry will be needed throughout the process.

Japan - Canada is seeking to raise the age limit of beef from 21 to 30 months as a step toward full World Animal Health Organization (OIE) access with Japan. In early 2009, Japanese officials signalled that they would soon like to consider raising the age limit for Canada. They would prefer to consider a Japan – Canada – US arrangement, but so far the US has refused such a step, holding up access for both our countries.

The National Cattlemen’s Beef Association (NCBA) passed a resolution in January 2009, to support raising Japan’s age limit to 30 months as a step toward full OIE access. Unfortunately, the results of Japan’s national election in September 2009 appear to be delaying expansion of beef access for at least several more months.

South Korea - In early December, Prime Minister Harper, Minister Ritz and CCA President Brad Wildeman visited Korea on an Asian trade mission. Both Prime Minister Harper and Minister Ritz expressed our concerns to their Korean counterparts about the prolonged lack of access for Canadian beef into Korea.

The result of the firm stance taken by Canada is that Korea now appears to be looking for a solution.

CCA believes that Canada must continue its WTO Dispute Settlement Panel against Korea until commercially meaningful access for beef occurs. The formal WTO process commenced last spring and the Panel was established in the fall.

Hong Kong – On the same Asian trade mission, Hong Kong re-established full access for Canadian beef. In early 2009, Minister Ritz travelled to Hong Kong and reached an agreement on a phased approach for Hong Kong to expand imports of Canadian beef. That agreement was to culminate in December 2009 with near-full access (excluding certain bone-in products).

However, due to the positive performance of Canadian beef exporters over the past year and the resulting confidence of Hong Kong authorities, the Prime Minister’s mission provided the opportunity to “trade up” to virtually full beef access according to OIE standards.

Mexico – Canada has full UTM access to Mexico, but expanding to full OIE access faces entrenched opposition. We continue to work toward achieving this objective by encouraging our Mexican counterparts to sign a joint letter requesting full access to the Mexican market.

Colombia – In May, Colombia partially restored access to Canadian beef - the first South American market to do so since borders closed due to BSE. The agreement re-opens the market for a wide range of Canadian beef and value-added beef products, initially yielding annual export levels of nearly $6 million in beef and $1 million in livestock and genetics. Once implemented, the new Canada-Colombia Free Trade Agreement will further improve opportunities by eliminating Colombia’s 80% tariff on beef.

Panama – In August, Panama lifted BSE restrictions that were in place for six years. A free trade agreement (FTA) was signed between Panama and Canada, but no details of the agreement have been announced at the time of writing. CCA worked closely with the Government of Canada throughout the process.

Jordan – Jordan lifted their import ban, due to BSE, restoring full market access for Canadian beef and cattle exports into the country. The estimated value of Canadian beef exports could increase up to $1 million annually. Canada has also negotiated an FTA with Jordan that provides immediate duty-free access for beef. Saudi Arabia – Saudi Arabia announced the opening of their borders for Canadian boneless beef exports from Under- Thirty-Month (UTM) cattle. Canada and Saudi Arabia continue extensive talks; with the goal of full market access. Once full access is achieved, export levels worth nearly $6 million could be re-established.

Domestic Agriculture

Improving Business Risk Management Programs

We are closely following development of a national cattle price and basis insurance program after federal, provincial and territorial Agriculture Ministers directed their officials to develop a model for review at their next meeting. We continue to lobby aggressively for development of a national price and basis insurance program that is effective and affordable, in collaboration with governments and industry.

Federal Tax Decision Brings Relief to Disaster-Stricken Cattle Producers

CCA continues to press governments to deliver a comprehensive disaster program of tax deferrals, feed assistance, and land rehabilitation to allow producers to make effective management decisions. We welcomed the new federal tax relief for producers struck by natural disasters across the prairies in 2008 and 2009. Environment

CCA actively consults, analyzes and develops recommendations to government on the impacts of environment and climate change commitments. We firmly believe that the cattle industry is a significant benefactor to the overall environment - it should be rewarded not punished, in any new legislative change.

Animal Welfare

To ensure new international animal welfare requirements are based on sound science, CCA works actively on this through our relationship in the Five Nation Beef Alliance, rather than risk elimination of our industry through regulation.

Beef InfoXchange System (BIXS)

BIXS is the new, national voluntary data and information exchange system based upon an individual animal identifier tags. A cornerstone of the Canadian Beef Advantage (CBA) strategy, it facilitates information-sharing across the beef value chain.

Throughout 2009, BIXS development focused on designing, constructing and testing of the BIXS portal, program requirements and functionality. This included execution of a pilot project, in early 2009, which focused testing the system’s functionality at the feedlot to packer stage.

The successful pilot demonstrated that feedlot and slaughter data/information could be captured and uploaded to a central database, and viewable by project participants, according to unique Radio Frequency IDentification (RFID) numbers. With information gained from the pilot, work proceeded on final development of the system.

In early 2010, BIXS will roll out to Canadian cow/calf producers. During the initial stage, any feedlot planning to participate in BIXS is strongly urged to collect some of the basic, required information as cattle enter their feedlot. This includes recording the weight-in and date-in linked to the individual animal’s Canadian Cattle Identification Agency (CCIA) tag number, plus storing this information for upload later to complete your registration, once the full program launches.

Be sure to visit the recently-launched BIXS Website which provides access to the system and answer any questions regarding the feasibility and benefits of participating in the BIXS. Visit www.bixs.cattle.ca.

Keeping Producers Informed - Improving Communications

In our efforts to improve producers’ access to critical news and industry information to help their business, CCA continues to undertake major initiatives.

Revitalized CCA Website Evolves with Industry Needs Have you visited www.cattle.ca lately? It received a major facelift to improve delivery of time-sensitive news, events, projects and programs, adding tools to improve access to the federal government, market and trade information, plus research and development initiatives.

Real-Time News Available at Auction Marts

In fall 2009, we launched a unique, real-time news delivery system at auction marts in Alberta. It features news and events, plus market and trade information aimed at helping you stay upto- date on factors affecting your business.

Computer monitors linked directly to a central server deliver up-to-the-minute information from regional, national and international perspectives, including local content from the auction mart, plus market facts from CanFax and North American commodity markets.

After a two-stage pilot is successfully completed in Alberta, together with our provincial members, we plan to take the new system nationwide.

News Delivery Services - Direct to You

Stay tuned for more news and other important issues by signing up to CCA’s new ‘Action News’ services. The free service comes directly to you by email, mail or fax, depending on your preference. The service features our recently launched bi-weekly newsletter, “CCA Action News”. To subscribe, visit www.cattle.ca , or contact our Communications Team at 403-275-8558.

Moving Forward

Looking back on this report, it is obvious that CCA undertakes extensive work for the industry, at levels that require a national voice to achieve success. The decline in cattle numbers, plus the implementation of Bill 43 in Alberta will put a considerable strain on provinces; and subsequently on CCA. Remaining competitive with the US adds to this challenge. If we fall behind the US, we simply can’t continue at current industry levels, having lost some of our packing industry and feeding capacity. With our stringent regulations, more feeder cattle will be sent into the US at a great discount. This has the potential to create further, more severe border disruption.

In order to keep up, first and foremost, we need to continue our efforts to remain competitive with the US. Only through continuing our work to improve efficiency and reduce the excessive costs of regulatory burdens to even the playing field, can we achieve this.