Chairman Frank Lucas today released the following statement on Scott O'Malia's last day as Commissioner of the Commodity Futures Trading Commission (CFTC). Last month, O’Malia announced he would resign to pursue other opportunities.
Japan misbrands whole industry for one company's mistake
Chicago Sun-Times op-ed
April 7, 2006By Chairman Bob Goodlatte
In response to the March 31 Commentary in the Sun-Times Business section by Chicago attorney Calvin Manshio ("'Don't worry' doesn't cut it for Japan in beef over U.S. imports"), I appreciate the willingness of the Sun-Times to correct Mr. Manshio's claim that the United States shipped beef to Japan that contained Bovine Spongiform Encephalopathy (BSE), also known as mad cow disease.
No U.S. beef shipment to Japan ever contained BSE.
I agree with Mr. Manshio's belief that trust is essential in international relations. However, there were other misstatements in his op-ed that must also be addressed.
The situation in question resulted from a simple trading error whereby a Japanese company mistakenly ordered a product that was outside the scope of the beef import agreement between the United States and Japan. Unfortunately, the American company mistakenly processed the order, and the U.S. inspector failed to catch the mistake and prevent its shipment. A Japanese import inspector discovered the mistake, thereby preventing commercial distribution.
The appropriate response would have been to dispose of the product, raise a protest with the U.S. government about procedure, and bar imports from that particular company.
Shutting down the entire beef trade between our countries is completely inappropriate.
The U.S. Department of Agriculture, working with the Japanese government, responded immediately, initiating an exhaustive investigation into the error, making numerous procedural changes to prevent future mistakes, and barring the company involved from the export program.
At this point, both countries are still involved in technical discussions to address outstanding questions. It is important to note that the United States acknowledged the mistake and took significant steps to resolve the issue, and yet the Japanese market remains closed.
Yes, trust is an important component in trading relationships. Trust between nations implies that trading partners provide opportunities to correct procedural errors when they occur and not abandon international agreements.
Mr. Manshio cites a proposed reduction in USDA's BSE Enhanced Surveillance testing program as further evidence that the United States does not wish to gain the trust of the Japanese. The program as proposed and implemented was always intended to be a short-term (12-month) snapshot of the prevalence of BSE in our domestic beef herd. Since June 1, 2004, we have sampled more than 667,000 head of cattle, 42 percent more cattle than the original program design.
While the program was never intended to be permanent, the levels of testing have not been decreased and will remain at the current levels for now. The United States works exhaustively to ensure that we have safeguards in place to protect all consumers of U.S. beef.
Compromise, like trust, is a two-way street, and we trust that the Japanese government will recognize the efforts made by our government. International trade is dependent on trust, and an important facet of trust is a proportionate response when procedural mistakes occur.