In an offhand comment during a recent interview, President Donald Trump suggested that a trade agreement with Brazil could be in the cards.

During his exclusive interview with Fox’s Laura Ingraham on Oct. 29, Trump responded to a question from Ingraham about a potential trade deal with Brazil.

“Yeah, I can see that happening,” Trump answered.

“You know, Brazil’s treated us very tough because they charge very big tariffs. Brazil has been very tough. So, we’ll be able to straighten that out.”

Though it was mentioned in passing, the potential drew the attention of the U.S. Cattlemen’s Association (USCA).

Beef exports continue to trend higher

In the group’s response to the president’s comments, USCA President Kenny Graner expressed his hope that the administration will reach out to stakeholders “if and when the conversation turns to establishing a U.S.-Brazil free trade agreement.”

Lia Biondo, director of policy and outreach for USCA, acknowledged the president’s minor mention for what it was, but said it was concerning nonetheless “to have any sort of statement like that coming from leadership, especially the president,” about a potential trade deal with Brazil.

“Now, whether or not that’s truly what he envisioned with his quote, I’m not entirely sure,” she went on.

“But we do want to get out there and be preemptive about the fact that we do not support the reopening of our borders to Brazilian beef until we have some really concrete evidence that they’re really taking their trade requirements and taking their trade duties with us seriously. We haven’t seen that.”

Bad actors

“[Brazil] is, historically, a bad actor when it comes to following through on trade commitments,” Garner said, and Biondo later echoed to WLJ.

Both referred to global findings of shipments of “tainted beef” being exported from Brazil to its trade partners in early 2017, and subsequent audits of Brazilian beef packing plants.

The U.S. began accepting fresh and frozen beef from Brazil beginning Aug. 1, 2016. Prior to that, the U.S. only accepted cooked beef products from Brazil. By March 2017, the USDA issued a notice claiming that no tainted or spoiled beef had reached the U.S., but that the Food Safety Inspection Service (FSIS) “will indefinitely maintain its 100 percent reinspection and pathogen testing of all lots of FSIS-regulated products imported from Brazil.”

In May 2017, FSIS began conducting audits of Brazilian packing plants cleared to export fresh and frozen beef to the U.S. On June 22, 2017, following the conclusion of the audits, the USDA suspended all imports of fresh beef from Brazil “because of recurring concerns about the safety of the products intended for the American market.”

Agriculture Secretary Sonny Perdue said the suspension would remain in place “until the Brazilian Ministry of Agriculture takes corrective action which the USDA finds satisfactory.”

Trade potential

According to USDA trade data, the U.S. imported just under 138 million pounds of beef and veal from Brazil in 2017. This represented about 4.6 percent of the almost 3 billion pounds of beef and veal imported into the U.S. that year. The year-to-date Brazilian beef import volume for 2018 through the end of September stands at 106 million pounds, down 3.5 percent from the same time last year.

It is important to keep in mind the USDA trade data does not differentiate between cooked versus fresh product.

When asked what a trustworthy Brazilian beef trade partner would look like, Biondo pointed to the audit report that was released in November 2017. Generally, the report found evidence of conflicts of interests in inspection personnel and the facilities they inspected, no system to ensure in-plant inspectors did their jobs, inadequate carcass inspection, inadequately-enforced sanitation requirements in plants, and residue testing inconsistent with FSIS requirements.

“We would have to see some sort of action towards addressing this Brazilian audit report that showed they failed on all fronts—not just one or two, they failed on all fronts—that they were being inspected for,” Biondo said.

“We also have concern with their use of child and slave labor in their beef production chain, which is widely documented,” she added.

This detail is supported by several international anti-human trafficking organizations, as well as the U.S. Department of Labor’s Bureau of International Labor Affairs.

“So, if we were going to reopen our markets to Brazil, there would have to be some steps taken to level the playing field between Brazilian and U.S. producers,” Biondo said.

“Our producers have to adhere to many strict environmental and regulatory requirements, and we know that’s just not the case [in Brazil] and the cost of production is much, much lower for Brazilian cattle producers.” — Kerry Halladay, WLJ editor

WLJ Managing Editor

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