Trump Administration hasn’t said if new U.S.-Mexico trade agreement requires country of origin labeling
August 28, 2018
BILLINGS, Mont.— Today, R-CALF USA CEO Bill Bullard issued the following statement regarding President Trump's announcement that he has renegotiated the North American Free Trade Agreement in part by negotiating a new trade agreement between the United States and Mexico.
"We have fully supported the Trump Administration's plan to renegotiate NAFTA and while some of the details released today indicate the new U.S.-Mexico trade agreement will benefit some U.S. economic sectors, such as the auto industry and its workers by requiring a higher percentage of supply-chain parts to be sourced in the U.S. and Mexico, we don't yet know if the new agreement contains the critical requirement for country of origin labeling (COOL) on Mexican beef and beef from Mexican cattle.
"For decades the U.S. cattle industry has been unable to produce enough beef to meet domestic demand. This is because prior free trade agreements, particularly NAFTA, allow unlimited numbers of tariff-free cattle from countries like Mexico, where cattle are overproduced at a significantly lower cost. These lower-cost imported cattle displace opportunities for current and aspiring U.S. cattle producers to expand or start their herd.
"Because beef from these imported cattle can be sold as a "Product of U.S.A." in our domestic market, the multinational beef packers wallow in higher profits because their ability to source lower-cost cattle that produce lower-cost, undifferentiated beef that inflates their profit margins.
"Every time our industry's price-point signals an opportunity to strengthen our domestic industry, unlimited imports of cheaper cattle and undifferentiated beef enter the U.S. and drive that price-point downward, thus eliminating opportunities for U.S. farmers and ranchers.
"Since NAFTA, the U.S. imports on average 1.1 million Mexican cattle each year. This represents a lost opportunity for over 3,500 U.S. ranches with a herd size of 300 head each.
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"Our domestic live cattle supply chain shrank by 6.5 million domestic cattle since NAFTA and this U.S.-Mexico trade agreement should contain provisions to help our industry reverse this downward trend.
"We hope that a further release of details will show that COOL will be required for Mexican beef and beef from Mexican cattle."