Scred cow? Canada's response to the BSE crisis; Evaluating North American integration, science, and questions of intrusiveness and autonomy.

• Author: Kukucha, Christopher

1. INTRODUCTION

   This study focuses on foreign and domestic pressures related to Canada's first indigenous case of Bovine Spongiform Encephalopathy (BSE) in May 2003. At the international level, the integration of the North American cattle and beef industry, export considerations in other markets, and the role of the World Trade Organization (WTO) and Office International des Epizooties or World Animal Health Organization (OIE), all had implications for Canada. Not surprisingly, the most significant challenge for Ottawa was the closure of the Canada-United States border, which suggests an ongoing need to improve the efficiency of existing trade dispute mechanisms. In other cases, however, the federal government was able to exercise partial or substantive autonomy on issues such as limiting Specified Risk Material (SRM's) from the human food chain; maintaining a discriminatory "zero tolerance" import policy; selectively adopting OIE guidelines; providing extensive BSE subsidy programs; adopting a distinctive SRM ban on animal feed; responding to the Ranchers-Cattlemen Action Legal Fund (R-CALF) challenge; and negotiating WTO Sanitary and Phyrosanitary (SPS) and Tariff Rate Quota (TRQ) guidelines. Canada's domestic policy process, on the other hand, highlighted the dominance of specific bureaucratic departments, such as the Canadian Food Inspection Agency (CFIA), and Agriculture and Agri-Food Canada (AAFC). The impact of industry, however, was primarily limited to the Canadian Cattlemen's Association (CCA) and the Canadian Meat Council (CMC) in the pre and post BSE eras. Ultimately, these actors endorsed science-based initiatives, but these policies were directly attributable to economic considerations and the restoration of export markets. In the process, Canadian officials, especially within CFIA, also influenced the evolution of international norms and standards, albeit in conjunction with bureaucrats and industry representatives from the United States and Mexico.

2. EVALUATING THE CANADIAN RESPONSE TO BSE

   Before reviewing Canada's BSE policy it is necessary to clarify the concepts of intrusiveness and autonomy. Intrusiveness, the independent variable, focuses on the impact of international developments on the domestic policy space of states. In the case of BSE and Canada, it is important to determine if external events imposed Canadian policies, or if Ottawa successfully resisted, or reciprocally endorsed these options. Autonomy, on the other hand, is best understood when compared to independence and sovereignty. According to Kim Nossal, "independence" is the "ability to be free from the control of others." In contrast, sovereignty focuses on the "juridical recognition" of states to control territory and exercise authority over citizens. Autonomy, however, is the "ability" to achieve specific preferences. Although all political communities pursue these goals, none are able to exercise complete autonomy consistently. Therefore, autonomy is reduced by material limitations, "or by the demands, actions, and constraints of others." (1) For the purpose of this study the autonomy of specific actors, the dependent variable, will be evaluated on a continuum ranging between minimal, partial, and substantive. It is important to remember, however, that questions of autonomy are also applicable to domestic actors within the state. If government or sectoral interests are relegated to process considerations, such as consultations, as opposed to directly contributing to policy outcomes, this suggests a minimal level of impact.

   Unfortunately, the literature on Canada and the BSE crisis does not fully engage these measures of analysis. Amanda Whitfield, for example, analyzed Canadian and American responses to the outbreak of BSE in Britain during the 1990s and concluded that Ottawa failed to prioritize this issue, due to pressure from domestic industry. (2) From a historical perspective, Ian MacLachlan also examined the integration of Canada's cattle-beef "value added chain" from the late nineteenth to the twenty-first century. (3) Other contributions focused on the positive and negative implications of an integrated North American cattle and beef industry. Linda Young and John Marsh concluded that North American integration limited options for Canadian policy makers. (4) Kate O'Neill reinforced this point by highlighting Canada's asymmetrical market dependence on the US in this sector. (5) Alexander Moens, on the other hand, persuasively argued that the United States Department of Agriculture (USDA) played a critical role in restoring cross-border trade and confronting protectionist pressures in Congress by stressing scientific approaches and rationales. (6) Geoffrey Hale has also suggested that market realities facilitated pragmatic cooperation between Canadian and American officials seeking harmonized North American science-based rules. (7) Finally, Robert Wolfe, who highlighted discussions between Canadian and American trade officials on this issue within the Appellate Body of the WTO, has emphasized transnational bureaucratic cooperation. (8)

3. INTERNATIONAL PRESSURES

   International Markets: Mexico and Asia

   External factors can be divided into global and regional trade considerations, the impact of the United States, and the role of specific international organizations. In terms of foreign trade, Canada exported $4.1 billion of beef annually prior to 2003 (15 per cent of the world market), which ranked it third overall, behind Australia (23 per cent) and the United States (16 per cent). (9) In fact, an average of 70 per cent of Canadian production in this sector was destined for foreign markets. (10) The Canada-United States Free Trade Agreement (FTA) and North American Free Trade Agreement (NAFTA) facilitated this outcome with the elimination of tariffs and quotas, as did the depressed Canadian dollar in the 1990s, geographic proximity, and increased demand from American consumers. (11) Mexico was Canada's second ranked export market prior to 2003 and Canadian exports to Asia expanded from $261 million in 1990 to $2.2 billion in 2002. (12) When Canada and the United States announced their first cases of BSE, Asian governments terminated all imports. Exporters in Australia and New Zealand took advantage of this ban and increased beef exports to Japan by 170 per cent and 88 per cent respectively from 2003 to 2004. (13)

   Canada faced significant barriers in its attempts to regain lost Asian markets. Ottawa had to address emerging competition from Mexico, Australia and New Zealand, but also low consumer confidence in food safety. In Japan, for example, the United States and Canada were forced to respond to the implementation of a universal testing policy, where all animals slaughtered for human consumption were tested for BSE. In April 2004, Washington convinced Japan to establish a Technical Working Group to discuss this issue. In September the Japanese Cabinet Office's Food Safety Commission rejected universal testing. The following month, Japan and the United States agreed to re-open access for American exports derived from cattle 21 months of age, which re-instated the eligibility of 94 per cent of American beef products. In return, the United States initiated its own rulemaking procedures to allow the importation of Japanese specialty Wgyu and Kobe beef. Washington further agreed to remove Specified Risk Material (SRM) from animals of all ages destined for slaughter. In December 2005, Japan restored imports of certain Canadian beef products derived from cattle 20 months and younger. (14)

   South Korea, on the other hand, was more reluctant to negotiate a resumption of trade with North America. In fact, despite an agreement between South Korea and the United States in September 2006, shipments continued to be banned on the basis of technical standards. In Canada's case, South Korea refused to engage in any discussions until all Canadian beef from May 2003 shipments, which was being stored in quarantine, was removed. This demand was not fulfilled until the summer of 2004 and negotiations did not begin until 2005. Talks were suspended following Canada's fourth case of BSE discovered in January 2006. Based on these developments it is unlikely that South Korea will resume negotiations with Canada until all SRMs are removed from animal feed. China and Hong Kong have also called for the implementation of an enhanced SRM ban on animal feed before entering into negotiations with Canada. (15)

4. THE UNITED STATES

   Canada has an asymmetrical trade relationship with the United States in this sector. Specifically, the United States receives approximately 90 per cent of Canada's beef exports, and 99.6 per cent of all live cattle.16 This total, however, represents only 10 per cent of all US beef imports, with the majority of purchases coming from Mexican, Japanese and South Korean markets. Canadian exports of live cattle exceeded one million animals in 2002, but this also totaled only three per cent of American slaughter capacity. (17) Despite these numbers, it is important to note the regional significance of Canadian exports of live cattle in northern US states, such as Utah, Washington, Minnesota, Michigan, and New Jersey. As a result, costs associated with the closing of the Canada-US border were significant for both countries. American exports dropped by 80 per cent in 2004, resulting in an estimated loss of $5 billion (US) between 2004 and 2005. (18) The closure of Canadian export markets equaled approximately $6-7 billion between 2003 and 2005. (19)

   The economic consequences associated with the disruption of this highly integrated sector contributed to a transparent and cooperative relationship between government officials in both Canada and the United States.2" In fact, the US Department of Agriculture played a key role in coordinating joint tele-news conferences, technical briefings and other forms of public updates...