The Rural Voice, 2004-10, Page 44News in Agriculture
NAFTA challenge puts pressure on US
A $400 million lawsuit against the
U.S. government over losses to
Canadian cattle producers puts
pressure on the U.S. to open the
border to Canadian cattle, a lawyer
told 120 cattlemen in Brussels
September 20.
Michael Woods, a Montreal trade
lawyer working for an Alberta -based
group suing the U.S. government
under Chapter 11 of the North
American Free Trade Agreement.
said with the lawsuit there's now a
ticking clock on both sides of the
border. Before the suit, he told
producers who packed the Brussels
Livestock sales arena, the clock was
only ticking for Canadian producers
who wondered if they could survive
until the border reopened and prices
rebounded.
"Now a clock in the State
Department is ticking. The longer the
border is closed, the bigger the
damages will be," Woods said.
"If the U.S. thinks we might win
the pressure will be on to open the
border," said Rick Pascal, the leader
`of Canadian Cattlemen for Fair Trade
(CCFT), the group that initiated the
trade action. Not only will a
successful lawsuit open the border
but it will win compensation for their
losses for those farmers taking part.
The group's estimates put the loss
at $400 per head of cattle. For a
feedlot that's $800 per feedlot space
based on two crops of cattle going
through in a year. CCFT members
represent 460,000 to 470,000 head of
cattle.
Pascal, who operates a 50,000 -head
feedlot with a total operation of
150,000 cattle in what would
normally be a $100 million
operation, (currently his feedlot is
only 26 per cent full) said it's very
important for producers of all sizes
from across the country to be
included in the lawsuit. He's
attending a series of meetings in
Ontario to explain the suit to Ontario
producers.
"The more people who participate
in the suit the better", added Woods,
comparing it to the ripple effect of
throwing a stone into water.
40 THE RURAL VOICE
"It's a way of fighting back," he
said. "The bigger the case gets, the
more strength it has."
Currently there are 90 producers
who have paid to join the suit, with
about 70 from Alberta and 16 from
Ontario.
Participating in the lawsuit will
cost a producer about $3 per head of
cattle, with a minimum participation
fee of $1,000. Cost of the lawsuit is
estimated at $1.5 million but Pascal
said the group is prepared to add
another $500,000 to $750,000 if need
be.
CCFT is set up like a limited
liability company with participants as
shareholders who will pay the costs
and benefit according the the size of
their participation.
Jim Williamson of Lambton
County questioned the cost of the
lawsuit, saying he would be surprised
if it didn't cost 10 times as much.
"We've tried very hard to keep
costs down," Woods answered.
"We're committed to keeping legal
costs as low as possible." He said his
co -counsel on the suit is a university
professor so he has an income from
that and his firm has trimmed its
costs.
"We have put together the
strongest legal team ever in a Chapter
II challenge", Wood said. "It's
world class."
"The intriguing part of this case is
that you can be a NAFTA Chapter 11
litigant at a very low cost," he said.
One cost that is involved is that the
parties must pay for the hiring of the
trade experts who will sit on the
tribunal to hear the case. That money
has been set aside in the budget,
Woods said.
Ken Alton of Lucknow said he
spoken with the Canadian
Cattlemen's Association and their
trade advisor wasn't impressed with
the possibility of CCFT winning its
case.
But Pascal said the Washington
advisor to CCA hasn't been involved
in any Chapter 11 cases and those
who have fought those cases in the
past weren't even aware of the firm.
Woods said his company is
assembling a team of trade experts
who feel it is a strong case, but when
you're an litigation there are no
certainties, he said.
"Our legal team is based on the
premise that we'd going to go out
and get what you need," he said.
"One of the strongest parts of our
case is that the U.S. government
through the Harvard University risk
assessment and through the
statements of U.S. Agriculture
Secretary Anne Venneman, has said
Canada is a minimal risk country.
After the Harvard risk assessment
said Canada was of little risk of
spreading BSE Venneman should
have opened the border to Canadian
cattle, Pascal said but instead of
making a simple decision she set up a
program to create rules for the entry
of Canadian cattle. In doing so she
created opportunities for American
opponents of trade like R -Calf to
throw up roadblocks.
R -Calf producers in Montana and
North Dakota have a hard time
grasping that Canadians can actually
have a lower cost of production than
they do, Pascal said. He said he can
understand their feelings when you
realize that 100 truckloads of cattle
were heading south from western
Canada to a packing plant in Billings,
Montana every day.
R -Calf doesn't want to trade with
anyone but themselves, Pascal said.
"I'll bet that once we get the border
open these guys will come forward
with a countervail challenge on the
aid money we've got from the
government," he said.
"By fighting back we have gained
instant respect (of the U.S.
government)." Woods said. "The cost
of (their) losing is too big to ignore.
The by-product (of the suit) is we're
sending a clear message: the border
closure has nothing to do with
science; it has everything to do with
the fact the American system will
keep the border closed as long as
possible."
Roy Cunningham asked Woods if
he did win how he would collect
from the U.S. government if it
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