Farmscape for May 29, 2015
The president of Paragon Economics says failure to bring Mandatory Country of Origin Labelling into compliance with World Trade rules could negatively impact North American live hog markets.
On May 18 the World Trade Organization upheld a series of rulings that Mandatory U.S. Country of Origin Labelling violates its international trade obligations, opening the door for Canada and Mexico to apply to impose retaliatory tariffs on products imported from the U.S.
The possible implications of the ruling are expected to be a key topic of discussion next week as pork producers gather in Des Moines, Iowa for World Pork Expo.
Dr. Steve Meyer, the president of Paragon Economics, says the ruling has not appeared to have impacted live hog markets in the U.S. so far, but that could change.
Clip-Dr. Steve Meyer-Paragon Economics:
Obviously to us that was expected.
I thought we would lose that appeal.
I think the market expected it so it's probably already in the market to a great degree.
If we get to the point of Canada and Mexico actually imposing tariffs, that might be another dose of cold water off this thing that the market might say, oh my gosh Congress might not even act on this, and there's some risk in the Senate that we won't get anything done before their August break, and I'm very concerned about that because I think these two countries will be coured to put on tariffs by that time.
I've held on hope that our Congress would act at the 11th hour to change the law and make it comply with WTO obligations.
From what I'm hearing out of Washington there is some risk that that won't happen.
If that reality gets to the market then we may see some negative impact.
I think there's been some negative thoughts about this topic in the market for some time.
Canada has indicated, while it prefers to avoid retaliation, if the U.S. fails to bring the law into compliance with it's world trade obligations, it's prepared to impose tariffs on a wide range of imported U.S. products including beef and pork, as well as everything from U.S. steel to California wine.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork Council