Canada, Mexico and COOL War

By JOEL D. JOSEPH

Why do our neighbors treat us so badly? We gave them NAFTA that helps both Canada and Mexico at the expense of US workers. To date, we have lost more than one million jobs to Canada and Mexico because of NAFTA.

“O Canada” is the Canadian national anthem. “Cry of War” is the Mexican national anthem. As US citizens, we should be crying war and yelling “O Canada and Mexico, why do you cheat us like you do?”

Yet Canada and Mexico have challenged our innocuous Country of Origin Labeling (COOL) Act that merely requires that meat and produce must be marked with their country of origin. A biased panel of the World Trade Organization (chaired by a Mexican national) has ruled that COOL was a non-tariff barrier to trade. This caused the House of Representatives to panic and amend the Country of Origin Labeling Act so that it requires only produce labeling.

But what about the real tariff barriers to trade enacted by our northern neighbor?

According to Canada’s leading newspaper, The Globe and Mail, the Canadian federal government imposes tariffs that run between 200% and 300% on virtually all dairy imports including milk, cheese and ice cream. Incredibly, we can’t ship Vermont’s Ben & Jerry’s ice cream or Vermont’s excellent cheddar cheese, milk or butter across the border because it would triple the cost.

Historically, a brewery in Canada had to have a brewing facility in each province where it wished to distribute beer. This was an effective way for provinces to get and keep brewery jobs within their respective jurisdictions as well as boosting revenues from taxes on beer produced and sold in the province. These policies are slowly changing, but because of them Budweiser is brewed in Canada, while we import Molsons, Moosehead and Labatt beers from Canada. This is a non-tariff barrier to trade, much more serious than our country of origin labeling.

Further, Canada protects its chicken farmers with tariffs as well. Canada charges US chicken importers a huge 238% tariff. At the same time, the US House of Representatives has voted to allow the import of Canadian chickens into the US without a country of origin label, even though the Canadians and Mexicans only complained about beef, not chicken.

This is one thing that Donald Trump is right about: our negotiators are weak. We let Canada and Mexico “out-negotiate” us and basically steal the farm.

Instead of enacting protective duties, Mexico has established illegal subsidies on many products.Two major industries affected by this are sugar and steel. The US International Trade Commission (ITC) recently made a determination (by a 5-0 vote) that imports of dumped and subsidized Mexican sugar are materially injuring US sugar producers. According to the antidumping and countervailing duty petitions filed by the US sugar industry, Mexico has systematically dumped subsidized sugar into the US market costing domestic producers an estimated $1 billion this year alone. In addition, the US Department of Agriculture (USDA) has already spent $278 million to keep the market from collapsing under the surge of subsidized Mexican imports.

In 2014, US Department of Commerce made a determination that rebar steel imports from Mexico were unfairly being dumped into the US market threatening the jobs of American workers. The Commerce Department announced that companies in Mexico will be subject to immediate duties on steel rebar requiring a cash bond or deposit posted in the amount of the newly-imposed duties. The duties will range from 10% to 66% for Mexican companies.

According to congressional lawmakers, rebar is one of the largest volume steel products produced in the US, employing more than 10,000 workers in over 30 states. In addition to rebar, Mexico steel wire producers have been found by the US International Trade Commission to have illegally dumped steel wire products below the cost of production.

The US should not cave into Mexico and Canada regarding the Country of Origin Labeling Act. Ninety percent of American consumers want their beef labeled with its country of origin and the US Congress should stand firm. The US should broaden negotiations with our two neighbors to include excessive and illegal tariffs by Canada on dairy products and chicken and the dumping, by Mexico, of steel and sugar. If the Obama Administration won’t harden its negotiating team, we will hear plenty of criticism from Donald Trump and other candidates running for President.

Joel Joseph is chairman of the Made in the USA Foundation, a non-profit organization dedicated to promoting American-made products. Email joeldjoseph@gmail.com. Phone 310 MADE-USA.

From The Progressive Populist, September 1, 2015

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