Canada’s beef producers are having a real cow over an in-the-works trade deal.
What happened: The Canadian Cattle Association (CCA), an industry group representing the country’s beef producers, is warning that a free trade deal with South America’s Mercosur bloc could flood Canada’s market with beef from Brazil and Argentina, undercutting domestic ranchers.
Catch up: Beef is big business in Canada, contributing $34 billion to the economy and supporting just shy of 350,000 jobs, making it the third-largest employer in the agricultural sector.
A severe drought that thinned cattle herds and strong consumer demand have pushed beef prices up 65% in the past decade, more than double overall inflation.
Canada’s cattle herd is now finally increasing as producers respond to higher prices, but the Mercosur deal could “disincentivize the growth in our herd,” according to CCA President Tyler Fulton.
Why it matters: Free trade deals always sound good in theory (especially when you’re rapidly trying to diversify your export markets), but get messier when it comes to hammering out the details. Domestic industries that stand to lose market share can suffer, and that can create real political and economic difficulties.
What’s next: The European Union faced similar protests from farmers over its trade deal with Mercosur and settled on a quota system that limited produce imports. Canada may seek a similar carve-out for beef.—TS
