Free trade in mad cows: How to kill a beef industry

Australia is the world's second largest beef exporter, dominating the highest value beef markets of Japan and Korea. Australia's competitiveness is underpinned primarily by its freedom from Bovine Spongiform Encephalopathy (BSE) - better known as 'Mad Cow' disease - thanks to strict animal feeding and importation regulations adopted in 1966. Why then would the Australian beef industry appear to agree to soften prohibitions on beef imports from BSE-affected countries, which would have the effect of opening Australia to BSE and potentially destroying its BSE-free status, along with its prime Asian markets? Our analysis begins with commitments that appear to have been made under the Australia-United States Free Trade Agreement. If our interpretation is correct, these commitments would compel Australia to accommodate US trade goals by recognising and adopting the weaker international standards on meat trade. To understand why the US would want Australia to abandon its stringent BSE safeguards, we consider wider US policy on BSE and beef exports, and its strategy for re-entering the valuable Japanese and Korean markets. To explain why the Australian beef industry might allow its interests to be sacrificed to serve US trade goals, we examine institutional and ownership features of the industry. Government pre-emption or 'capture', we suggest, explains industry subservience. The apparent willingness of the Australian government to sideline its country's economic interests in order to serve those of a foreign power raises the question of Australian exceptionalism.