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CAFTA-DR Task Force in Nicaragua
(Managua, Nicaragua) – R-CALF USA's CAFTA-DR (Central American-Dominican Republic Free Trade Agreement) fact-finding task force arrived in Managua, Nicaragua, on Tuesday, June 28. The team will spend eight days in Central American nations to research and analyze the potential effects of CAFTA-DR on the U.S. cattle industry. The task force traveled to Nicaragua after spending three days in Costa Rica touring ranches, cattle-feeding operations, packing plants, grocery outlets and visiting with cattle industry leaders and embassy officials.
Members of the task force are: Dennis McDonald, Montana Cattlemen's Association president and R-CALF USA International Trade Committee Co-Chair; R-CALF USA Director and Missouri veterinarian Max Thornsberry, who also chairs R-CALF USA's Animal Health Committee; Joel Gill, R-CALF USA's Mississippi membership chair, who also is vice president of Mississippi Order Buyers and president of the Mississippi Livestock Marketing Association; and Doug Zalesky, Ph.D., a Colorado State University bovine research scientist and cattle producer from Colorado, who recently was elected president of the Colorado Independent Cattle Growers Association.
"We were shocked to find Nicaraguan law prohibits the importation of U.S. beef processed in plants not certified by Nicaraguan authorities," said McDonald. "Nicaraguan authorities have never undertaken inspection of U.S. plants. This is simply a mechanism to restrict U.S. beef trade in Nicaragua. Costa Rica has similar laws that prohibit the importation of U.S. beef, poultry products, fruits and vegetables, as well as seafood.
"Both Costa Rica and Nicaragua have strict mandatory food-labeling laws, which require all imported food products to be labeled," continued McDonald. "CAFTA-DR language prohibits many cuts of U.S. beef from entering either Costa Rica or Nicaragua for up to seven years. These trade barriers, added to the language in CAFTA-DR, which allows free and unfettered access to U.S. markets for Central American beef, make it very difficult to take the position that CAFTA-DR addresses global trade distortions or helps to level the playing field for U.S. cattle producers.
"It's little wonder that back in Washington, the Bush Administration is having difficulty passing CAFTA-DR through Congress," McDonald said. "American citizens know CAFTA-DR is a bad deal for the United States, and it's a bad deal for Central America.
"We are also very concerned to learn that both Nicaragua and Costa Rica are presently shipping large numbers of feeder cattle to Mexico duty-free," McDonald pointed out. "These cattle then enter the U.S. duty-free under the North American Free Trade Agreement (NAFTA). This trans-shipment of cattle is disturbing. The practice will accelerate if CAFTA-DR is ratified.
"In one instance, a group of Costa Rican ranchers were in the process of shipping 10,000 head of Costa Rican cattle to Mexico," McDonald explained. "This is a concern since the Nicaraguan herd numbers 3.4 million head, and this number will increase substantially if CAFTA is ratified."
Thornsberry inspected a local Costa Rican slaughter facility after admittance into a U.S. Department of Agriculture (USDA) slaughter plant was refused, although a previous appointment had been made and approved. The inspected plant slaughters 300 head of cattle and 400 hogs daily.
"The plant was well staffed since labor costs are a fraction of those in the U.S.," commented Thornsberry. "The plant management indicated their desire to become a USDA-approved plant to export to the U.S.
"The plant was sub-standard with open doors into all areas of the facility, and both species were being processed in the same areas," he continued. "Poor quality refrigeration was very apparent, with cooler temperatures in the mid-60 degree area, rather than the 40-degree temperatures required in U.S. plants."
Early information gathered in Nicaragua suggests that expansion of the national cattle herd is not only likely, but is well underway.
"During ranch visits in Costa Rica, we were informed that large numbers of breeding stock are being exported to Nicaragua," noted Zalesky. "Upon arrival in Nicaragua, we were informed by embassy and trade officials that Texas interests recently visited Nicaragua to negotiate development of cattle-feeding operations in the country. We've also learned that corn is a major crop here, and there is great potential for expansion in corn production."
"Superior genetics have been imported into Central America from the U.S., most notably from the Hudgins Ranch and the V 8 Ranch in Texas," said Gill. "Through the use of artificial insemination techniques, Costa Rican ranchers have been able to improve their breeding stock to the point that their genetics are widely sought after throughout the Central American region.
"With their herd improvements, the Costa Ricans no longer need to rely on U.S. genetics on a widespread basis," Gill said. "From our conversations with representatives of the U.S. government assigned to Nicaragua, it appears the same is true here."
Gill noted that many of the live animals the task force viewed in Costa Rica were destined for export to Nicaragua and El Salvador. Nicaragua exports breeding stock to Mexico, as well as other nations in the region.
Other facts gathered during initial Nicaraguan visit include:
1. Nicaraguan agriculture laborers average $2 per day, with no benefits.
2. Nicaraguans have a substantial comparative advantage over U.S. producers because of rich volcanic soil, constant year-round temperatures, climate, and rainfall, which varies from 30 inches to 80 inches annually.
3. Costa Rican labor leaders oppose CAFTA-DR because of the negative impact on family and culture, and because the agreement will allow for exploitation of cheap labor. The AFL-CIO maintains the labor standards recently have eroded in Central America in anticipation of CAFTA-DR ratification.
4. During a meeting with the R-CALF USA CAFTA-DR task force, the U.S. Economic Counselor in Nicaragua said the political climate in that nation makes ratification of CAFTA-DR unlikely.
5. During a meeting with U.S. Embassy officials, the task force learned that in 1991, China and Taiwan financed a program to increase cattle production in Nicaragua. Further, U.S. dollars are presently flowing to Nicaragua to add value to Nicaraguan cattle and to promote Nicaraguan organic cattle production.
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(Managua, Nicaragua) – R-CALF USA's CAFTA-DR (Central American-Dominican Republic Free Trade Agreement) fact-finding task force arrived in Managua, Nicaragua, on Tuesday, June 28. The team will spend eight days in Central American nations to research and analyze the potential effects of CAFTA-DR on the U.S. cattle industry. The task force traveled to Nicaragua after spending three days in Costa Rica touring ranches, cattle-feeding operations, packing plants, grocery outlets and visiting with cattle industry leaders and embassy officials.
Members of the task force are: Dennis McDonald, Montana Cattlemen's Association president and R-CALF USA International Trade Committee Co-Chair; R-CALF USA Director and Missouri veterinarian Max Thornsberry, who also chairs R-CALF USA's Animal Health Committee; Joel Gill, R-CALF USA's Mississippi membership chair, who also is vice president of Mississippi Order Buyers and president of the Mississippi Livestock Marketing Association; and Doug Zalesky, Ph.D., a Colorado State University bovine research scientist and cattle producer from Colorado, who recently was elected president of the Colorado Independent Cattle Growers Association.
"We were shocked to find Nicaraguan law prohibits the importation of U.S. beef processed in plants not certified by Nicaraguan authorities," said McDonald. "Nicaraguan authorities have never undertaken inspection of U.S. plants. This is simply a mechanism to restrict U.S. beef trade in Nicaragua. Costa Rica has similar laws that prohibit the importation of U.S. beef, poultry products, fruits and vegetables, as well as seafood.
"Both Costa Rica and Nicaragua have strict mandatory food-labeling laws, which require all imported food products to be labeled," continued McDonald. "CAFTA-DR language prohibits many cuts of U.S. beef from entering either Costa Rica or Nicaragua for up to seven years. These trade barriers, added to the language in CAFTA-DR, which allows free and unfettered access to U.S. markets for Central American beef, make it very difficult to take the position that CAFTA-DR addresses global trade distortions or helps to level the playing field for U.S. cattle producers.
"It's little wonder that back in Washington, the Bush Administration is having difficulty passing CAFTA-DR through Congress," McDonald said. "American citizens know CAFTA-DR is a bad deal for the United States, and it's a bad deal for Central America.
"We are also very concerned to learn that both Nicaragua and Costa Rica are presently shipping large numbers of feeder cattle to Mexico duty-free," McDonald pointed out. "These cattle then enter the U.S. duty-free under the North American Free Trade Agreement (NAFTA). This trans-shipment of cattle is disturbing. The practice will accelerate if CAFTA-DR is ratified.
"In one instance, a group of Costa Rican ranchers were in the process of shipping 10,000 head of Costa Rican cattle to Mexico," McDonald explained. "This is a concern since the Nicaraguan herd numbers 3.4 million head, and this number will increase substantially if CAFTA is ratified."
Thornsberry inspected a local Costa Rican slaughter facility after admittance into a U.S. Department of Agriculture (USDA) slaughter plant was refused, although a previous appointment had been made and approved. The inspected plant slaughters 300 head of cattle and 400 hogs daily.
"The plant was well staffed since labor costs are a fraction of those in the U.S.," commented Thornsberry. "The plant management indicated their desire to become a USDA-approved plant to export to the U.S.
"The plant was sub-standard with open doors into all areas of the facility, and both species were being processed in the same areas," he continued. "Poor quality refrigeration was very apparent, with cooler temperatures in the mid-60 degree area, rather than the 40-degree temperatures required in U.S. plants."
Early information gathered in Nicaragua suggests that expansion of the national cattle herd is not only likely, but is well underway.
"During ranch visits in Costa Rica, we were informed that large numbers of breeding stock are being exported to Nicaragua," noted Zalesky. "Upon arrival in Nicaragua, we were informed by embassy and trade officials that Texas interests recently visited Nicaragua to negotiate development of cattle-feeding operations in the country. We've also learned that corn is a major crop here, and there is great potential for expansion in corn production."
"Superior genetics have been imported into Central America from the U.S., most notably from the Hudgins Ranch and the V 8 Ranch in Texas," said Gill. "Through the use of artificial insemination techniques, Costa Rican ranchers have been able to improve their breeding stock to the point that their genetics are widely sought after throughout the Central American region.
"With their herd improvements, the Costa Ricans no longer need to rely on U.S. genetics on a widespread basis," Gill said. "From our conversations with representatives of the U.S. government assigned to Nicaragua, it appears the same is true here."
Gill noted that many of the live animals the task force viewed in Costa Rica were destined for export to Nicaragua and El Salvador. Nicaragua exports breeding stock to Mexico, as well as other nations in the region.
Other facts gathered during initial Nicaraguan visit include:
1. Nicaraguan agriculture laborers average $2 per day, with no benefits.
2. Nicaraguans have a substantial comparative advantage over U.S. producers because of rich volcanic soil, constant year-round temperatures, climate, and rainfall, which varies from 30 inches to 80 inches annually.
3. Costa Rican labor leaders oppose CAFTA-DR because of the negative impact on family and culture, and because the agreement will allow for exploitation of cheap labor. The AFL-CIO maintains the labor standards recently have eroded in Central America in anticipation of CAFTA-DR ratification.
4. During a meeting with the R-CALF USA CAFTA-DR task force, the U.S. Economic Counselor in Nicaragua said the political climate in that nation makes ratification of CAFTA-DR unlikely.
5. During a meeting with U.S. Embassy officials, the task force learned that in 1991, China and Taiwan financed a program to increase cattle production in Nicaragua. Further, U.S. dollars are presently flowing to Nicaragua to add value to Nicaraguan cattle and to promote Nicaraguan organic cattle production.
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