050419 Canadian PM Says American Meat Packers Will Suffer For Border Closures

Gatineau, Quebec - American meat packers will pay a long-term price for policies which closed the border to Canadian beef, Prime Minister Paul Martin warned Monday.

The closed border is forcing Canadian packers to expand and become stronger competitors in the global market, he said. Canada is increasing its slaughter capacity and will be less dependent on U.S. packing plants once the border re-opens, he said.

"The net result of that is we will have the capacity once the border opens up to export substantially into the United States," Martin told an audience of foreign-policy experts.

"U.S. processors are (going) to suddenly realize that in fact what has happened has not been in their interest."

Last month, Ottawa and the Alberta government pledged $80 million to develop and expand new markets.

The federal Agriculture Department says Canadian processing capacity shot up 26 per cent in 2004 and will increase further.

The federal Agriculture Department says Canadian plants were slaughtering 76,000 cows a week when the border was closed in May 2003.

That number will increase to 98,000 by the end of this year - and that's despite the current reduction in exports to the U.S.

American meat packing firms are laying off thousands and some are going under without Canadian cows to process.

Martin suggested they'll be hit even harder when the U.S. and international borders finally open fully to Canadian beef.

"We are also going to have the capacity to target those great markets of Europe, the great markets of Korea and Japan in a way we've never done before," he said.

"Closing the border on an integrated industry is going to have been a costly process for the United States."

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