Beef Demand

[agman]

Agman: "I[Agman] believe imports from Canada are a perfect example. We[packer/feeders] import total, live plus product, approximately the amount of our[packer/wholesaler] total exports of beef. The difference is we[packer] get the benefit of direct added value plus residual gain. That is higher plant utilization, employment, taxes spending etc.

Where is the 'us' as in USA producers in this equation?

Agman: "It is the added value differential that makes importing a raw material worthwhile and exporting a processed product whether that is steel and auto parts converted to cars or cattle to beef."

Adding value to imported raw material is even MORE worthwhile when the imported raw material cost less than the home grown raw material[USA live cattle]. And what happens to the price of the home grown raw material when it is displaced with imports???

I didn't think packer profits were good enough to be considered "worthwhile"? Maybe they just need to be importing more raw material...OH, that's right, they are working on that with FTAs!!!!!
I'm sure you meant..."If we did[not] import we would have to compete with Canada in the export of goods."

Tyson and Cargill would still be processing the Canadian beef, but would actually have to label it as Canadian beef. Is there a reason they would rather sell it as perceived USA beef?????

If you cannot understand the derived benefit to U.S. producers then a further explanation would do you no good. Your thinking does not allow you to go beyond a load of cattle crossing the border. That is a sad situation.

 

[pointrider]

RobertMac: "Pointrider, who stands to benefit the most from the WTO being the controlling body over all these 'regional integration' organizations?"

Hi RobertMac!

It is my understanding that the WTO is not a controlling body over free trade agreement organizations such as NAFTA and CAFTA, but they probably trump the other organizations most of the time if there is a disagreement. The WTO is an organization that is made up of individual governments and works to resolve trade issues between those governments in "negotiating rounds" and in appeals. Just as individual governments can use WTO rulings to fight off pressure from individual companies or industries at home, they probably also use WTO rulings in NAFTA cases and NAFTA rulings in WTO cases. Having both the WTO and regional trade agreements gives an individual government more leverage and flexibility in many cases in my opinion. Of course, it is up to each government to belong to both kinds of organizations or not to belong to one or the other.

Like I said, we have two kinds of trade organizations at the same time - the WTO and the various trade agreement unions (i.e. NAFTA). The WTO is a world body with about 150 member governments while NAFTA is just 3 nations, of course. The U.S. and our neighbors to the north and south. Each type of organization has its own basic purpose which is slightly different, but they are both about trade. And trade is about doing business. The tricky part is how much each industry in a particular country gets to participate if they want to participate in foreign trade, and what the rules and regulations turn out to be for those particular industries in the total group. I believe that it is a very difficult job for any government such as the Bush administration to constantly have to receive input and perform the balancing act that is required for the good of the country in the world trade arena.

It is a monster chess game, and the inputs are constantly changing. For example, personal computers have only been around about 20 years in significant volume. And cell phones about 10 years. New technology is constantly producing new products that are being added into the mix. And some older products eventually drop out. It's how much of this and how much of that do we allow right now? What products do we need to protect with stronger tariffs and which ones do we not need to protect? How much tariff can I get by with to make the folks at home happier which we need to get reelected? Etc. Etc. I do not envy the people who have to deal with this all the time.

I'll talk about incremental politics in a separate post.