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Red Meat

Buried in news of Alberto Gonzales and Barbara Boxer was the highly charged committee hearing on Agriculture Secretary Mike Johanns. It was “highly charged” not because the Democrats and the Republicans were at odds, but because all the Senators were looking for help from the appointee on international trade. The reason is simple, as this article subsequently points to. Domestic meat producers are paying lots for American beef because Canadian imports were banned until a quarantine period for mad cow had passed. American cattle owners are not eager to cut prices from Canadian importation. American demand for beef is not low, but it may have been artificially high during the Atkins Diet craze.

It should surprise no one then that the Senators involved took aim at Japan, which has been using mad cow concerns to ban American beef imports. But is this solution the panacea? Only if you believe in the “cascade theory”. Japan accounted for 30% of all American beef exports and only about ten percent is sent overseas. In other words, a total of 3% of all American beef in 2003. Canada accounted for around 2%, and so does Mexico and South Korea each respectively. That leaves a conglomeration of nations to represent the final 1%, many from Asia. Canada and Mexico have dropped American beef import bans. The thinking is if Japan does, the rest of Asia follows suit.

The fallacy there is that American beef will be favored over meat from other countries because of some inherent quality. In Japan, Yoshinoya has said publicly American beef is better for its signature teriyaki bowls. South Korea, Taiwan and the others might not have such predilections about which beef is better though. And that enough will probably means that Bush will face tremendous upheaval within his own party about trade.

posted by Thomas at 9:43 PM 0 comments