Japan holds key to U.S. and Canadian beef trade.

All eyes in the North American beef industry remain firmly fixed on Japan, for it is increasingly apparent that it is Japan that will determine when trade will return to normal levels. The discovery in May of one Canadian animal that had contracted mad cow disease brought an immediate halt in the movement of live cattle and beef from Canada to the United States, Japan and 33 other countries. Since then, a panel of four international animal health experts has examined Canada's handling of the situation and was highly complimentary. The panel's report praised what it called the "comprehensive scope, level of analysis and thoroughness of the investigation to date."

Among other things, the panel recommended that Canada prohibit the presence of specified risk materials (SRMs) in food and animal feed. "Implementation of an SRM ban is the most critical and valuable central measure for public health protection and food safety," says the report. (SRMs include tissue from the brain, spinal cord, ganglia, terminal ileum, eyes and tonsils.) Canadian Agriculture Minister Lyle Vanclief recently said cattle brains and spines will be removed from the Canadian animal feed supply and that other details relative to SRMs would be announced soon.

The steps taken by Canada apparently are enough to satisfy its NAFTA trading partners, Mexico and the United States. Agriculture Secretary Ann Veneman says she considers Canadian beef safe. However, the United States has not yet given an estimate of how long it will take to lift its ban. Meanwhile, Mexican officials say they are close to lifting their ban on Canadian beef, but appear to be waiting for the United States to take the first step.

What is complicating a lifting of the ban by the United States and Mexico is the insistence by Japan that beginning Sept. 1, the United States must certify that U.S. meat exports to Japan will not contain any cattle of Canadian origin. Currently, the United States has no system in place that can guarantee such a claim with confidence. Japan has a heightened concern about BSE following its own problems with the disease in its domestic cattle herd, an event that reverberated throughout the country's meat and food industries.

Meetings 10 days ago between Canadian Agriculture Minister Lyle Vanclief and his Japanese counterpart Yoshiyuki Kamei to devise a plan to reopen the Japanese border proved to be "frustrating," according to Vanclief. Kamei reportedly agreed to have his officials re-evaluate their conclusions, which failed to give Canadian beef a clean bill of health. However, he gave no timetable for the work to be completed. Vanclief said Kamei provided little other guidance.

Last year, the United States exported 251,835 tonnes of fresh, chilled, frozen and processed beef to Japan, according to the Japanese Customs agency, making Japan the largest overseas market for U.S. beef.