050609 Cattle Industry Split Over Central America Trade

June 11, 2005

Helena, WA - A pending trade agreement with Central America drew cheers and jeers Thursday from cattle industry leaders who remain split over its potential benefits to U.S. beef producers.

Leo McDonnell, president of R-CALF United Stockgrowers of America, called the Central America Free Trade Agreement a threat to American-raised beef and warned it could make the United States a ‘‘dumping ground for major beef-producing countries'' locked out of other markets by tariffs.

‘‘There's only one place for them rationally to go and that's the U.S.,'' McDonnell told ranchers in Helena for the Montana Stockgrowers Association's midyear meeting.

Jim McAdams, a Texas rancher and head of the National Cattlemen's Beef Association, acknowledged the thought of globalization is ‘‘scaring the hell out of all of us,'' but called it an opportunity to expand U.S. beef markets and get a leg up on competitors like Canada.

‘‘Right now, (Central American countries) can ship their products to us tariff-free, and I'm talking about beef here,'' he said. ‘‘We have to pay a tariff when we ship our beef to them. This agreement does away with that tariff. This is a win for U.S. beef.''

The agreement, negoti-ated more than a year ago, calls for phasing out protective tariffs and quotas on almost all U.S. manufactured and farm products in the Dominican Republican and Central American countries.

President Bush is pushing Congress to approve the pact before taking its August recess. However, opponents in the House say they now have the votes to defeat it, and Republican supporters have said a vote won't occur unless it can pass.

Sugar growers have generated the most opposition to CAFTA, which they say will devastate their market by allowing more Central American sugar imports. But other industries claim it will also hurt their bottom line and will only benefit big multinational companies, not individual farmers and ranchers.

McDonnell said one of his biggest concerns is the potential for countries to bypass trade obligations and export beef that includes meat from nations not in the pact, heightening the risk for contamination and disease.

‘‘There need to be clearer and tougher standards,'' he said.

McAdams compared CAFTA and other global trade pacts to the changes Western farmers and ranchers faced in the 19th century, when the railroad replaced trail rides and open range was fenced off in favor of settlers.

‘‘Just as the railroad came in and brought all these changes and challenges, it also opened up opportunities because it enabled us to get our cattle product to consumers in the East and allowed us tremendous growth in this business,'' he said. ‘‘Those that adapted and changed prospered, but those that didn't probably didn't survive the business of that day.''

Following that same spirit of free enterprise and entrepreneurship is the key to succeeding in today's changing market, McAdams said. Building more demand for beef and keeping costs low are also critical, as well as free and fair trade.

‘‘The answer to our future is not by trying to limit supplies,'' McAdams said. ‘‘That is not sustainable and we cannot do it.''


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