Keeping trade open
As in all business relationships, sometimes the road to trading goods can get rocky.
Jamshed Merchant, Canada’s consulate general, visited Fort Dodge Thursday morning to meet with the agriculture committee for the Greater Fort Dodge Growth Alliance.
Merchant, whose office is in Des Moines, said he’s met with state officials and private businesses to understand the U.S. side of trade disputes and to tell Canada’s side.
Merchant said the mandatory Country of Origin Label issue is one of those roadblocks.
Merchant said Canada’s economic is expected to take a $1 billion hit if mCOOL is implemented. If it does, Canada and Mexico have said they will raise trade tariffs to make up for the dollar loss.
He said trading in pork is one of the biggest enterprises between his country and the U.S. He said pork producers in Manitoba and Saskatchewan import U.S. soymeal to feed sow herds and gestating hogs.
Weaned pigs from those territories are shipped to U.S. finishing operations, primarily to Minnesota and Iowa.
In turn, Canada imports U.S. pork products, since that country does not have enough slaughtering plants to meet its domestic pork needs.
The issue of mCOOL, Merchant said, creates unnecessary costs to their pork operators, by having to keep track of each weaned pig born in Canada that comes to the U.S.
In 2009, Canada and Mexico appealed to the World Trade Organization, saying COOL, not mandatory at that time, was an unfair trade practice. The WTO agreed.
The farm bill that was approved by the U.S. senate on Tuesday and scheduled for President Obama’s signature on Friday left the mandatory COOL language intact.
“So we are going back to the WTO and say, ‘Nothing has happened. In fact it’s worse.'”
He said the WTO would likely authorize Canada and Mexico to set the tariffs in amounts to equalize what they see as an economic setback to their producers.
“We hope it doesn’t come to that,”?Merchant said. “We hope we can find a solution.”