R-CALF USA submitted a Statement for the Record yesterday (July 26, 2021) regarding the hearing scheduled for Tuesday, July 27, 2021, by the United States Senate Committee on Finance titled Implementation and Enforcement of the United States – Mexico – Canada Agreement: One Year After Entry into Force.
In its introduction, the cattle group states that while several sectors of the U.S. economy report benefits arising from the renegotiated U.S.-Mexico-Canada Agreement (USMCA), the agreement has failed the United States cattle industry.
Contained in the statement are charts depicting a significant beef and cattle trade imbalance the United States has with Canada and Mexico and it points out that the U.S. imports from Canada and Mexico about two and one-half times the value and about three and one-half times the quantity of beef and cattle that it exports to those two countries.
“The trade in cattle and beef under the USMCA is so out of balance that the United States cattle industry cannot benefit from beef exports to Asia or other parts of the world. This is because the United States’ world beef and cattle exports are insufficient in both value and volume to overcome the horrendous USMCA trade deficit,” the cattle group wrote.
Using 2020 trade data, the statement explains that the United States’ world trade balance in cattle and beef has only worked to reduce, but not overcome, the trade deficit it has with Canada and Mexico. For example, the group asserts the United States had a 2.2-billion-pound deficit under the USMCA that was only reduced to a 1.5-billion-pound world trade volume deficit, and the USMCA value-based trade deficit of $3.3 billion was only reduced to a $1.1 billion world trade deficit by trading with the rest of the world.
According to the group’s statement, “This means, at best, the United States engages in beef and cattle trade with the rest of the world to help mitigate its USMCA trade deficit.”
The group further asserts that undifferentiated beef and cattle imports from Canada and Mexico function as direct substitutes for U.S. cattle and beef and are causing the exodus of U.S. beef cattle operations, shrinkage of the U.S. cattle herd, and elimination of opportunities for aspiring cattle farmers and ranchers.
U.S. cattle producers “cannot be expected to prosper when multinational beef packers, processors and importers continually source greater quantities of undifferentiated beef and cattle from Mexico and Canada,” the group states.
The group urged Congress to move quickly and decisively to allow U.S. cattle producers to compete with the rising imports of beef and cattle from Canada and Mexico by passing new mandatory country-of-origin labeling (mCOOL) legislation to require all beef in U.S. commerce to be conspicuously labeled as to where the animal from which the beef was derived was born, raised, and harvested.