3 Feb 2013 - Good News - Bad News

The good news is finally, American cattle producers will be allowed to ship more U.S. beef into Japan. The bad news is why did it take nearly ten years to get it done?

Why do trade negotiations take forever to reach a conclusion? Let’s review the Japanese situation for a moment. At one time Japan was the largest foreign buyer of U.S. beef. Then do you recall what happened in 2003; do you remember this term, ‘bovine spongiform encephalopathy’, known as BSE, also known as ‘mad-cow disease’? Yes, it was 2003 in Washington state when that mad-cow was discovered; countries around the world immediately slammed the door on beef imports from the U.S. Most of them, however, lifted the ban in two or three years, except for Japan.

Finally, after a few years of negotiations, we convinced the Japanese government it could take beef from animals 20 months or younger and be perfectly safe. Since that time, however, we have continued non-stop negotiations to convince the Japanese government to raise that age limit. Finally, last month after nearly a decade of talking, the government of Japan said it would raise the age and allow beef from animals 30 months of age or younger to be imported into the country.That may not sound like much of a difference, but it really is, and it will mean several million more pounds of American beef will move into Japan each year.

Not everyone in Japan was pleased with their government’s decision. The Consumers Union of Japan said it opposed the change because of its concerns over lax checks on animal feed and product shipments in the United States. It said the Japanese government had underestimated the risks involved in raising the age limit to 30 months. I find this consumer concern questionable in a country that has registered several more mad-cow cases than the United States.

But beyond this one situation, the point I want to make is why does it take forever to get trade negotiations to reach a conclusion? Whether it is U.S. beef in Japan or Korea, U.S. GMO’s in Europe or U.S. pork and beef in Russia, it takes forever. And once the World Trade Organization rules on a trade dispute, appeals can be filed that will delay a final decision for several more years.

When it was established in the 80's, the W.T.O was touted as the one place for countries with trade disputes to discuss and settle their differences. That’s well and good, but it’s too bad they didn’t establish rules to make the settlement happen in a timely fashion. It’s time to re-write the rules to make that happen, but I guess that would take years, too!

My thoughts on Samuelson Sez.