With the exception of the War of 1812, tensions between the United States and Canada, who often boast of having the longest friendly land border on Earth, have never been so high. During the war, Canadians were nervous, and rightly so, about the American decision to invade Canada in an attempt to settle old scores with Britain. Today, with nearly 200 years of friendship under our belts, those tensions have resurfaced, although this time it is not over land or sovereignty issues, but trade.
The beef-trade embargo that has ensued since the discovery of Canada’s first case of BSE nearly two years ago is causing long-term and perhaps irreversible harm to many on both sides of the border. But to some U.S. cattlemen, it has had the opposite effect, with some producers bragging about record windfalls brought on by a tight and largely closed market. To some, every day the border is closed is like rolling sevens on the tables in Las Vegas.
But what might be lining the pockets of some in the short term will eventually bite their long-term backsides — as well as those in the cattle and beef industry in general. Anti-trade mentalities carry a very high price tag indeed, and the longer the border with Canada remains shut, the more damage we’ll see to the long-term prosperity of U.S. cattlemen and their unique way of life.
The border closure is causing long-term structural changes in the North American meatpacking industry. In response to the protracted U.S. border closure to live cattle and beef over 30 months of age, Canada has increased its meatpacking capacity by 27 percent in the past two years. And the Canadian government is putting tens of millions of dollars into further increasing domestic capacity. These are brick-and-mortar investments that will not reverse should the border reopen. As plants continue to shut down in the United States, and open in Canada, producers in the United States — particularly the upper Midwest — are going to find themselves as secondary or residual suppliers of cattle to Canadian packing plants once the border finally reopens.
From a producer’s point of view, this two-year boycott is completely changing the face of the industry, and the world in which they do business. The presence of the new Canadian packing plants will spur further expansion of Canadian cattle production, leaving Canada with far more beef than it can consume domestically. So we’re not only exporting packing jobs and economic growth to Canada, but also planting the seeds for the expansion of a Canadian cattle sector, which produces cheaper cattle and will be competing head-to-head with American cattlemen for expansion in a fairly static world market.
The refusal to abide by clear scientific findings that Canadian beef is as safe as U.S. beef and reopen our borders is also causing damage to the U.S. beef industry on the international stage. Countries like Mexico and Japan can’t understand why we refuse to import Canadian beef, calling it unsafe, when they employ the same BSE safety measures as we do. Either both are safe, or both are not. Which one is it? If we continue to cry foul about the safety of Canadian beef, the export markets in Asia and Latin America that are teetering on reopening to us will likely raise the same safety questions with us. America will be stuck with the reality that countries that close their doors to imports get doors closed in their faces to exports. With 6 billion consumers outside of the United States, we’re closing the door on our best ticket to economic prosperity.
The War of 1812 is often called one of the “forgotten wars” in American history. Unlike many other wars, there was no real long-term negative side — the United States rebuilt economic and political ties with both Canada and Britain that have lasted for decades. The current trade war, however, will likely leave a lot of economic victims in its wake — people who never knew that they were witnessing, some even inadvertently supporting, the dramatic down-sizing of the U.S. cattle and beef industry that had provided generations of their family members with both livelihood and a sense of pride and purpose.
J. Patrick Boyle is the president and CEO of the American Meat Institute. AMI, founded in 1906, represents America’s meat and poultry processors and packers.