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Is It Economics or Politics? PDF Print E-mail
Written by Steve Dittmer   
Saturday, 24 June 2006
AFF Sentinel Vol.3 #14

That the Japanese have finally agreed to resume beef trade has no one at top levels dancing in the streets. After all, the Japanese have led us on a long steeplechase. Probably Vegas bookies would not want to handicap the odds of this deal holding up. Even USDA Secretary Johanns' referred to the agreement as "another step" and added he "will not be satisfied until U.S. beef is once again accepted into the Japanese market." Translation: when we see it being sold in Japanese restaurants and markets, we'll believe it.

The demand from Japanese consumers and, therefore, from Japanese foodservice and retailers was strong before December, 2003 - billions of dollars strong. So why has recovery been so difficult? If consumers and their suppliers wanted it, what was the real hold up?

Our beef industry tends to think of this as an economic problem. But the Japanese have hidden behind scientific molehills to mask other concerns.

Politics has been the dominant factor, especially for the Japanese. The Japanese government, with elections this year, has been very sensitive to appearing too accommodating to the U.S. The opposition party has used the issue as a club. Japanese consumer activists - apparently needing issues -- made use of this one.

From our side, frustrated beef industry elements put pressure on the U.S. government to get something done. The issue was discussed at the very highest levels of government-to-government talks. It should be noted, however, that the U.S. allowed what most of us thought was an adequate period for normal channels to fix the problem before the President got involved.

But at least one long-time Washington observer, admittedly using 20/20 hindsight, suggested an underlying reason that made these levers work: it was too obvious to everyone how badly we wanted it. Just like a kid stroking a car in the showroom, we were a too-easy target for a Japanese government with bigger problems. So the U.S. beef trade became symbolic far beyond what was appropriate, as often happens in elections anywhere.

While Japanese politics were the primary driver behind the excruciating pace, it is interesting that both the re-opening the first of the year and the promised re-reopening this time around occurred when Congress rumbled with threatened trade retaliations and severe economic pain to the Japanese economy.

It is frustrating that threats of such drastic action seem necessary to settle relatively straightforward trade negotiations. But it is proof that politics and economics on the international level are impossibly intertwined. Cattlemen ignore that fact at their peril.

And that is why some inexperienced newcomer groups have made trade and politics one of their key targets. The problem is that nuances and subtleties of international culture and negotiations are difficult enough for all but the very best minds in Washington's circles. And the blunt clubs of lawsuits, distortions, and bad pseudo-science are poor weapons in international trade negotiations.

In retrospect, some have said that any deviation from solid science was an opening we should not have allowed. Allowing Japan off the internationally accepted 30-month guideline opened the door. Once negotiations get off the science road, everything devolves into politics and gamesmanship. The U.S.- Canadian negotiations were a much better example of sticking to science, until certain groups' attorneys got involved. Science has to remain our bedrock but the lure of compromise in getting a Japanese deal done was strong.

The U.S. did get equal access to Japan for all processors - and, therefore, all feeders -- not just certain plants via private testing as some advocated. Plant-by-plant approvals would have allowed the Japanese to play processors off against each other.

The USMEF, should this deal hold, is ready to handle international culture and nuance. Their campaigns are poised, ready to make the Japanese feel special: "Just for Japan," for the meat trade and "We Care," for consumers. "We Care" is designed to "reinforce the special care and attention taken by the U.S. industry in producing beef specific to the expectations" of Japanese consumers. USMEF is also producing a Beef Virtual Tour showing the U.S. beef industry from farm to fork, assuring Japanese consumers and trade members U.S. beef is safe to purchase and to enjoy.

Hopefully, we've all learned some valuable lessons that won't be forgotten, starting with the approach to top negotiations. Once the market was reopened last time, we found out the devil was lurking in details not specified. At the operational level, mishandling simple procedures like label checking and inspecting blew up the deal.

Economic pressures have, apparently, trumped the political games. But the intertwining of politics and economics won't change. Neither will the need for delicate, subtle, knowledgeable handling of international trade negotiations.

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Last Updated ( Tuesday, 18 July 2006 )
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