Hard-won access to international markets through successful negotiations is o...

Hard-won access to international markets through successful negotiations is often thwarted by technical trade barriers erected to slow trade, U.S. Meat Export Federation (USMEF) directors learned during the group’s recent board meeting in St. Louis.

“While success at the negotiating table remains essential to international market expansion, dealing with or removing these barriers will determine our long-term success,” USMEF President and CEO Philip Seng said in his opening remarks to directors. These barriers range from labeling requirements to sanitary standards: “Anything that will slow the flow of trade,” he added.

Keynote speaker Brink Lindsey, senior fellow at the Cato Institute and author of a new book on globalization, Against The Dead Hand: The Uncertain Struggle for Global Capitalism, echoed the theme noting that 67 percent of the people of the world live in countries where state-owned enterprises continue to dominate the flow of goods and services, 39 percent live under varying degrees of price control and 57 percent live in nations with state-controlled banking systems. In addition, “shadow economies” in many nations dominate employment and production, yet remain “off the books” in terms of trade.  “While we are heading for a global economy, the dead hand of protectionism continues to delay its arrival,” he concluded.

A panel of industry experts – including manager of Elanco government relations, Dennis Erpelding; former member of the Office of U.S. Trade Representative, Mark Sloan; vice president of international sales for Swift and Company, Mark Gustafson; USMEF vice president of export services, Paul Clayton; and vice president of DuPont Food Industry Solutions, Dr. Russell Cross, who moderated – took a closer look at a set of currently popular technical trade barriers known as “sanitary and phytosanitary” (SPS) issues. Cross explained SPS issues now are popular with governments attempting to slow agricultural trade because there may be science on both sides of often emotionally-charged issues.

The panel suggested that USMEF and the industry become more involved with other governments as they develop standards; “to be proactive” on these issues, especially where the U.S. has well-negotiated trade agreements in place. It also suggested there is a need for a new body to replace the old, slow and European-dominated CODEX to set international standards. Science should be used to establish standards, not politics, as often is the case now.

As for feed additives, Erpelding noted that while science typically shows many common feed additives – and even the feeding of genetically modified feedstuffs – to be safe, many governments have rushed to regulate them for emotional and often irrational reasons. Sloan noted that the European Union (EU) has been able to establish itself as a regulatory leader despite the fact that it is often on the “wrong side” of science, even snubbing World Trade Organization findings which have found the EU in error.

Gustafson noted that labeling requirements can often stand in the way of trade. He cited recent examples of label changes ordered by the Chinese government but made public only days before they were to go into effect. “Product was already on the water destined for Chinese ports when the change was announced. All of us were scrambling to follow the rules and very worried we’d have product en route that would be turned back.”

On the issue of traceability, the panel concluded there is no agreement on what is really needed. Some governments insist that a trace-back system must extend from farm to fork. Clayton noted that: “Tracing live animals is important where animal disease control is the goal, but not very meaningful when there is a food-safety concern. We have recall systems in place to assure consumers that we can locate and remove contaminated product, which is very important in maintaining public safety. So we can’t let ourselves be pressured by another government to develop a system that requires trace-back to live animals for the wrong reasons,” Clayton said.

As the result of this discussion, directors later passed resolutions directing USMEF to work with industry partners: to gain agreement on the need for a trace-back plan and then work with these partners and government agencies to develop a standardized national trace-back system as “expeditiously” as possible; to raise the priority of red meat exports among government agencies; and to develop/maintain a coordinated industry position and response to food safety issues.

Seng, in his remarks, also noted a changing and challenging trend in marketing that offers many opportunities to U.S. exporters. He said a “brand evolution” was taking place worldwide that focuses on building consumer confidence, while meeting consumer demand. He described a change in focus from generic meat labeled by country of origin, to premium private brands that are source- and process-verified and have an intrinsic perceived value to consumers.

“We have to be flexible in our marketing efforts,” Seng noted. “In some countries, we are still at the stage of selling generic beef or pork. In others, such as Japan, we have to be focused on consumer needs or we won’t be selling our products there.” He noted that marketing efforts – and funding to support these efforts – must be flexible enough to adapt to these changing market conditions.

The U.S. Meat Export Federation is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn, sorghum and soybean checkoff programs.

- USMEF -

Editors, please note: Presentations cited above are available online at http://www.usmef.org/.
Mr. Seng’s report is available at /TradeLibrary/Speech03_0521_Seng_PresidentRpt_BOD.asp;
Mr. Lindsey’s at /TradeLibrary/Speech03_0521_Lindsey_Globalization.asp; and the trade panel presentation is located at /TradeLibrary/Speech03_0521_Cross_TradeAccess.asp.