Japanese Ban of U. S. Beef Imports

JAPANESE BAN OF U.S. BEEF IMPORTS -- (Senate - June 29, 2006)

Mr. NELSON of Nebraska. Madam President, I rise today to discuss the devastating Japanese ban on imports of American beef and a bill that I have introduced that would ban imports of Japanese beef until such time as fair trade is resumed and Japan is once again importing U.S. beef. I am raising this issue because of its importance in my State of Nebraska and to the entire American beef industry.

Today, Japanese Prime Minister Koizumi visits with President Bush--in fact, they are together right now. I hope they are talking about the beef ban, but if they are not; I am. It is important that this devastating and unfair ban on U.S. beef does not get ignored.

Japan has now banned imports of U.S. beef for over 5 months. This ban has had significant affects on the U.S. beef industry and it has hit home in Nebraska.

First, Japan used to represent a $1.4 billion market every year for U.S. beef, which equals about $115 million every month--and Nebraska was the leading beef exporting State to Japan. That means Japan's most recent ban has directly cost the U.S. beef industry at least $575 million.

But this is only part of the problem. In December of 2003, Japan closed its borders to U.S. beef over purported concerns about BSE or mad cow disease. Their borders remained closed for over 2 years, until December 2005 and were opened barely a month before closed again in January 2006. This in spite of the low prevalence of BSE in the U.S. herd, especially compared to its prevalence in the Japanese herd.

Second, my home State of Nebraska has been hit especially hard. The beef industry is a big part of Nebraska's economy--we were one of the top States in cattle fed and cattle slaughtered in 2005 and Japan imported $350 million of Nebraska beef products in 2003.

We have estimated that both Japanese bans on U.S. beef imports have caused great damage in the State--up to $875 million and more than 1,300 jobs, including two plants in West Point and Norfolk that were closed due in part because of this ban.

Because of this I write to Japanese Ambassador Kato every week to urge Japan to end the ban as quickly as possible. Each time, I emphasize two main points: (1) That American beef is the best and safest in the world and (2) that Japan needs to end its ban on U.S. beef immediately. Unfortunately, I have now written 18 letters with more on the way.

Because the beef industry cannot tolerate this unfair ban much longer, I have introduced a bill that will ban all U.S. imports of Japanese beef until such time as the U.S. Trade Representative reports to Congress that Japan has actually resumed imports of U.S. beef.

My bill is about fairness and I urge my colleagues to become cosponsors.

I want to emphasize that my bill is about fairness in our trade relations: Japan's ban on U.S. beef simply cannot be considered a fair trade practice.

Last December Japan finally agreed to lift its initial ban on U.S. beef after a long series of negotiations and overwhelming evidence of the safety of American beef.

In January, the very first shipment of U.S. beef to Japan was found by Japanese inspectors to contain a few boxes of beef that did not comply with the export protocol that Japan and the U.S. had agreed to; the very first shipment!

It is extremely important to note that this shipment posed absolutely no risk to human health, it was merely in violation of the strict export agreement between the U.S. and Japan.

And how did Japan react? They immediately banned all imports of U.S. beef. They didn't send the shipment back or even de-list the company that sent the non-compliant shipment.

No, they punished the entire U.S. beef industry for a single instance of noncompliance--a situation that came about because of human error in the implementation of the export procedures--and their actions have caused great harm to a $1.4 billion industry.

I agree that mistakes were made by U.S. officials and facilities. But fair trade requires a reasonable and fair response to mistakes.

Japan's total embargo is not, in my opinion, a fair and reasonable response.

Because of that, I am bringing this matter to the attention of my colleagues on the day that Prime Minister Koizumi meets with President Bush, as a reminder of this unfair trade practice.

I have met with Ambassador Kato multiple times and I greatly appreciate all of his efforts to resolve this situation and end Japan's ban. Unfortunately, the Japanese bureaucracy has dragged this process out entirely too long.

Let me set out a timetable of events and discuss what this slow process has cost the U.S. beef industry in real dollars:

On January 20, 2006, Japan instituted the current ban on U.S. beef imports;

Within the first month of this second ban, two beef processing plants in Nebraska were closed, costing these communities over 1300 jobs and an untold amount of money;

I wrote my first letter on February 22 and by that time USDA had already conducted a thorough investigation of the incident and delivered a report to Japan with its findings and the steps it would take to correct the mistakes;

By the time of that letter, the U.S. beef industry had lost an estimated $116 million in exports;

By the end of March, when Japanese officials finally met with a technical team from the USDA to answer lingering concerns Japan had about beef safety--even though the noncompliant shipment posed no danger to human health--the ban had cost the beef industry an estimated $264 million;

In April, Japan held a series of public meetings to communicate to Japanese consumers that there were no risks to health from American beef. These meetings were held over the course of 14 days at a cost to the U.S. beef industry of an estimated $56 million and the ban now causing about $348 million in lost exports;

On the 4-month anniversary of the Japanese ban, Japan announced that it had reached a basic understanding with the U.S. on the resumption of beef imports, but had not reached any formal agreement to resume imports. The damage to the beef industry topped $460 million when Japan finally reached this basic understanding;

Lately, we have been told that all that is left for Japan to resume importing U.S. beef is for its own inspectors to audit each of the 35 U.S. facilities permitted to export to Japan--and previously re-audited by USDA officials in April. This round of audits just began and will continue through July 21--or just past the 6-month anniversary of the ban when the cost to the beef industry will reach $700 million;

In the time that it takes Japan to re-audit the U.S. facilities, the loss in exports to the beef industry will be $116 million;

And Japan has recently said that they will not resume imports until after they submit a report on their audits--so each day that Japan takes to complete this report, the beef industry loses about $4 million.

Those numbers are only part of the real cost to an important U.S. and Nebraska industry of this slow, drawn-out process; most of the costs we are unable to estimate at this point in time. But the above timeline should serve as a real reminder of what unfair trade practices cost American industries.

I was given another real reminder of the damage caused by this ban at the end of last month. On May 31, I flew around Nebraska to meet with producers, packers and other members of the Nebraska beef industry. They all told me that the Japanese ban has been hard on them and they encouraged me to continue pushing Japan.

I talked to folks at a beef processing plant in Grand Island, where foreign beef sales once made up 16 percent of the company's sales--half of which once went to Japan. They have been hit hard by Japan's ban.

I talked to farmers and ranchers whose livelihoods have been threatened by this ban. Some of them were set to ship beef to Japan when it reopened in December. These producers couldn't emphasize enough the problems this ban has caused them and how it has affected their planning and businesses.

These Nebraskans were clear: our trade arrangements must be fair. They must be based on sound science and not on politics or emotion.

And they all supported my bill. Their message to me was clear: if Japan won't take our beef, there's no reason why we should continue to accept their beef. I couldn't agree more.

Recently the National Cattlemen's Beef Association unanimously voted to support my bill. They too emphasized that fair trade was the driving force behind their support for my bill. The cattlemen's message to Japan was simple: Enough is enough.

The Nebraska cattlemen have also recently stated that they welcomed my bill. They support this effort because they are frustrated that we have not obtained fair trade with Japan. Japan imported $350 million of Nebraska beef products in 2003 and that market has now been unfairly closed for far too long.

Japan's ban on U.S. beef has unfairly damaged the beef industries in Nebraska and the United States. This ban is not based on scientific evidence. It is not the result of real health concerns. It is based on politics and emotion. It is not a fair manner to conduct trade.

That is why I am doing all that I can to push this process along and that is why I will continue to push until trade is actually resumed and U.S. beef is once again on the shelves in Japan and available to Japanese consumers.

That is why I am speaking on the Senate floor this morning while the Japanese Prime Minister is at the White House--as a reminder that our trade relationship with Japan must be conducted fairly.

There has been progress made and I do not wish to discount that. It has come too slowly and at a high price to the beef industry. But progress has been and continues be made.

I do want to mention that I applaud Japan's agreement to refrain from closing down all trade over any future instances of noncompliance. The shared understanding reached last week between the U.S. and Japan includes a provision whereby Japan, upon finding a noncompliant shipment, will only take actions that are commensurate with the nature of the violation.

I believe that. fair trade between our countries requires that action only be taken against noncompliant shipments or, at most, against the facilities responsible for the noncompliant shipment. I do not believe that it is fair to hold the entire industry at fault. I welcome Japan's agreement to conduct trade in this fair manner.

I will wrap up by again asking my colleagues to support my bill and to help send a message to Japan that trade between our nations must be fair.

It is my hope that together our efforts will continue to speed along the process for resuming the beef trade with Japan and will help ensure that when trade resumes between our nations it is conducted fairly.

I close today by reiterating what I keep telling Ambassador Kato: That U.S. beef is the best and safest in the world and that Japan's ban on it should end immediately. I am cautiously optimistic that Japanese consumers will again be able to enjoy U.S. beef before the end of July, but this ban has gone on too long and I am worried about the lingering damage it has caused--to the U.S. beef industry in particular.

I yield the floor.

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