A cattle pin is worn by a participant of a press conference on Parliament Hill in Ottawa on May 6 as the Canadian beef sector raises concerns regarding the Mercosur negotiations.Sean Kilpatrick/The Canadian Press
Tyler Fulton is the president of the Canadian Cattle Association of Canada.
Summer is finally here, and with it, the weather has gotten warmer, and the memories of the cold winter have faded away. For Canadians, this time of year means barbecue season – where very few will be thinking about international trade negotiations. Yet the outcome of Canada’s free trade talks with the Mercosur bloc, which includes Brazil, Argentina, Paraguay and Uruguay, could have profound consequences for Canadian ranchers who supply the high-quality beef that so often takes centre stage on backyard grills.
In an increasingly unstable global economy, Canada has made it a priority to engage with new trading partners and diversify our trade relationships. While Ottawa’s renewed pursuit of a free trade agreement with the Mercosur bloc may seem like a sensible strategy, we must remember that not every trade deal is a good trade deal.
Canadian ranchers fear losing business to cheap South American beef if Mercosur trade deal is signed
We, as cattle producers, are not arguing that Canada should retreat from global trade – on the contrary, part of our success has been built on access to international markets and participation in global supply chains. Rather, we understand that not every trade agreement or partner is the same.
Canada is at a significant disadvantage compared to the Mercosur bloc when it comes to the beef sector due to our differences in labour standards, and animal health and environmental requirements, which affect our costs. Canadian standards are a strength, producing some of the highest-quality and safest beef in the world; however, they also make it difficult to compete against lower-cost imports from countries operating under different regulatory regimes.
The risk extends beyond today’s prices. If sustained import competition reduces domestic production capacity, Canada could become increasingly dependent on foreign beef, which carries real risks in an unpredictable world. If we become reliant on foreign beef, we won’t have a Canadian beef sector, an industry that is unequivocally Canadian.
Cattle stand at a feedlot in Buenos Aires province, Argentina, on July 6. Tyler Fulton argues that a trade deal with South American countries, a market dubbed the Mercosur, could undermine the domestic beef production that contributes more than $41-billion annually to the economy.Martin Cossarini/Reuters
Beef production is the economic foundation of rural Canada, contributing more than $41-billion annually to the economy and supporting hundreds of thousands of jobs. Canada already imports a significant share of the beef consumed domestically. After years of drought and other challenges, Canadian producers are beginning to expand production amid strong prices, which will in turn help lower retail beef prices and ensure our own food security.
A deal that includes Mercosur beef would decrease Canada’s food security, which is the opposite of the government’s recent National Food Security Strategy.
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Expanding market access to Mercosur beef could limit our industry’s growth. Herd expansion takes years, processing infrastructure requires long-term investment, and rural labour shortages are already acute. By opening the market to significantly more foreign beef, we risk undermining the Canadian cattle industry and making ourselves more dependent on international suppliers. If Canada faces a disruption to global supply chains or needs to rely more heavily on domestic production, we may find that the capacity we once had no longer exists.
Food security is not simply about whether food appears on grocery store shelves today, but whether a country maintains the capacity to feed itself tomorrow.
With the uncertainties around the United States–Mexico-Canada Agreement (USMCA) negotiations, it is understandable that Canadians are not focused on Mercosur, but both agreements will have very real consequences for us as a country and for the future Canadian beef industry. Canada’s beef sector is deeply integrated with the U.S. USMCA is the most important trading agreement for the Canadian economy – and the cattle sector is no exception. Policymakers need to be cautious about creating new sources of friction, and we know very well that how Canada chooses to diversify our trade will not go unnoticed in Washington.
Trade has brought prosperity, economic growth and new opportunities, but there are risks associated with it. When trade provides win-win opportunities for both countries, it makes sense, but when the trade-offs, risks and downsides outweigh potential benefits, it is necessary to question whether a trade agreement is beneficial to us as a country, or if it’s a deal in name only.
Canadian ranchers have spent generations building an industry that feeds millions of people, supports rural communities and contributes billions to the economy. We have adapted to changing markets, embraced innovation, and met some of the highest standards in the world, while also providing vital environmental benefits such as ecosystem protection, carbon sequestration, and wildlife habitat.
The high standards we hold are not met by Mercosur beef. Canada’s standards reflect consumer expectations and public policy choices, and Canadian beef producers are committed not only to upholding those standards but also to continuous improvement. Canadians have already seen what happens when strategic industries become vulnerable to decisions made elsewhere: failing to learn those lessons is done at a risk only to ourselves.