Loading...
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 Continued on page 41