I enjoy a good steak or burger, but I don’t think about the beef trade a whole lot. I was reminded of it, however, when I saw Senator Max Baucus’ announcement last week that the United Arab Emirates is eliminating its ban on U.S. beef. The senator took appropriate credit, of course, and may have actually had something to do with it. It made me wonder where we stand on other countries’ beef restrictions.

Unfounded, unscientific restrictions on beef hurt hardworking ranchers in Montana and across the U.S. and create an unlevel playing field for U.S. beef. Simply put, American beef is 100 percent safe and the best in the world, and there is no reason for it to be banned on scientific grounds. The UAE’s decision to recognize sound science and lift its ban on U.S. beef means millions of dollars in new export opportunities for our ranchers.
- Senator Max Baucus

I recall the bad old days when Japanese negotiators kept their faces straight as they told us that American beef just couldn’t be digested by delicate Japanese stomachs – their justification for keeping U.S. steaks out of the market. The world has changed little since then, though Japan may loosen its restrictions later this year. We have heard that before. If it should happen, that’s bad news for our Australian friends who inherited the Japanese market when we were booted out over one stray Canadian dairy cow that crossed the border.

Who you calling "mad"?

The ITC did not catalog all the BSE-related restrictions in the world, but highlighted those of Japan, South Korea, the European Union, China, Russia and Mexico – all of whom exceeded the recommended restriction level established by the World Organization for Animal Health (OIE). Each had different sorts of restrictions. You can check them out in the ITC report. But are they still in place?

We have been pushing Japan to ease its BSE restrictions for several years, but to no avail so far. The current thinking is that Tokyo may relent later this year, but we have been led to believe that since at least 2009. I’m not holding my breath, though this could be a major boon to Hawaii’s cattle ranchers. The same holds true of South Korea, but here we seem to be well on the way to getting rid of the BSE trade restrictions since they were included in the U.S.-South Korea FTA. I’m not sure of the implementation schedule.

Europe‘s BSE restrictions have been hopelessly commingled with opposition to hormone-fed beef and genetically-modified beef, so it is nearly impossible to separate them out. In fact, Brussels seized on the presence of the one cow with BSE in 2003 to impose new restrictions on hormone-fed beef (hunh?). These restrictions have not been removed, though there is some hope. There is a new report to the European Parliament urging liberalized rules on beef imports from countries that have had BSE cases in the distant past, as well as a proposal that would expand U.S. sales of hormone-free beef in Europe.

China still bans U.S. beef outright, much to the joy of Australian ranchers who have enjoyed a near-monopoly in the Chinese market. Russia‘s restrictions appear to still be in place, though I have not been able to confirm this. There seems to be clear progress in Mexico. Mexican BSE restrictions remain in place, but their application to U.S. beef products has been progressively reduced to a smaller number of products. U.S. beef exports to Mexico topped $818 million in the first ten months of 2011, a 25% increase over the same period in 2010. Who says NAFTA wasn’t worth it?

They had asked me to talk about the new free trade agreements between the United States and South Korea, Colombia and Panama, as well as about prospects for the Trans Pacific Partnership. I did that, but presented it as a lesson in how trade negotiations are conducted. My message was that trade talks are ideally global, but that such negotiations can become impossibly complicated – witness the Doha Round. If countries can’t get much done at the multilateral level, they fall back to doing trade agreements at the bilateral or regional level. Such as NAFTA, the FTAs or the TPP.

I noted that trade talks today encompass far more subjects than in the past. Trade negotiations have gradually moved from “simple” tariff cuts (which aren’t simple in the slightest), to rules on trade-distorting practices and non-tariff measures – the so-called traditional approach. The 21st Century edition adds such things as restraints on investment, trade in services, labor rules and environmental protection. Which makes modern negotiations far tougher to dicker and finish. There are just so many targets and many of them are moving. One result of this complexity is the proliferation of bilateral or regional free trade agreements, something on which the United States has been a relative laggard.

Complex enough?

You can see my full PowerPoint presentation here. It turned out not to be a disaster.

I agree with Bhagwati that it would be very nice if the Doha Round were making headway. Truly multilateral trade agreements are far preferable to a hodgepodge of regional or bilateral agreements, one of the reasons the GATT and then the WTO were established. It is hard tomhave most-favored-nation treatment if each country has a different set of agreements. But, while I agree that the United States hasn’t done as much to help the Doha process as it should, I can’t fall for Bhagwati’s seeming assumption that the United States has killed Doha all by itself.

As if undermining the WTO’s Doha Round of global free-trade talks was not bad enough …, the US has compounded its folly by actively promoting the Trans-Pacific Partnership (TPP).

It has taken more than one country to make Doha a shambles, and the deed was done long before Washington became enamored of the Trans Pacific Partnership. That’s where Bhagwati’s cause and effect are reversed. Doha went comatose, then TPP came to the fore, not the other way around.

U.S. interest in TPP is an attempt to keep some sort of multilateral process going, rather than descend into competitive free trade agreements as most of the world seems to be doing. One can question whether TPP is the best way to do that (and I question it), but I don’t see the nefarious plotting that Bhagwati charges Washington with.

That said, Bhagwati and I are in full agreement that the Obama Administration, toadies to American labor unions and the far left of the Democratic Party, goes way too far in trying to force trade agreements to carry baggage they really cannot bear. U.S. negotiators today are forced to bring up a multitude of topics that go far beyond the traditional trade agreement, hugely diminishing prospects for success. If the U.S. stance on TPP is to be criticized, there is plenty to say on American negotiating tactics and techniques that increase the probability of failure – and thus ensure that willy-nilly negotiation of bilateral FTAs will continue to replace the WTO and its multilateral rounds. But saying that negotiating TPP is an attempt to kill Doha goes a step too far. The corpse of Doha was already cold.