Although Canada has developed an effective animal identification system, and the provinces are progressing toward a system that has full traceback capabilities, the U.S. and Mexico have made little or no progress. Contemporary U.S. proposals for state initiatives will not work. In the meantime, the U.S. livestock industry will continue to lose markets for its products and has little to no basis for complaining about lost sales and the lack of open markets. Also indentified are relevant economic and political principles that both underlie animal identification systems and the failure to make positive steps forward toward establishing a North American animal identification system.