Juan.

ACTING CO-MODERATOR VILLARREAL: Good morning.

CO-MODERATOR LYONS: Juan may be taking my spot for a few minutes today. The State of California is signing their budget today and I've been requested, as a cabinet member, to attend that budget signing. I think it's the first time in 15, 20 years that we've been on time, so I plan to leave for just a few minutes to attend the signing of our budget.

Also Deputy Secretary Rominger has a few more introductions.

Mr. Rominger.

USDA DEPUTY SECRETARY ROMINGER: Thank you. I mentioned in my owning remarks that we have a couple of State Directors of our Farm Service agencies here. Val Dolcini, why don't you waive your hand, Val, so people know who you are. There's Val back there from California. George Arredondo from Arizona back there. Now, we also have Wendell Newman, State Director from Nevada, who's down there. He says they sell a lot of hay to California farmers, California dairies, so he wants to make sure his trade keeps working. We also have our State and Rural Development Director with us here today, Celeste Cantu.

Thank you.

Bill, back to you.

CO-MODERATOR LYONS: Thank you, Deputy. We have our first panel today and I'd like to remind them that they have three minutes. And the Chairman of today's Session, our Secretary Mr. Lyons, will handle the gavel. So we have a little light system up there, which is green, yellow and red. The red means that the Chairman will cut you off.

(Laughter.)

CO-MODERATOR LYONS: So I just want to make sure that that's clear.

On our first panel today we have Don Gordon from the Ag Council of California, Jasper Hempel from Western Growers Association, Sharan Lanini from American Agri-Women and Bill Pauli from the California Farm Bureau. Our first speaker is Don Gordon.

Don.

MR. GORDON: Good morning, panel members. I'm Don Gordon, president of the Agricultural Council of California. We are a trade association that represents 48 agricultural cooperatives and their 25,000 producer-owners on State public policy issues.

Approximately 28 percent of the $6.7 billion worth of California agricultural exports in 1997 was transacted through cooperatives. For many, exports represent 60, 70 or as much as 85 percent of their total business volume. With this much at stake, U.S. trade policy is critically important to our California cooperatives.

With this in mind, I have four points that I will briefly summarize.

First, we recommend that the Administration aggressively pursue Congressional approval of Fast-Track authority. In doing so, however, we would caution that a significant degree of skepticism exists in California agriculture over the implementation and effectiveness of previous trade agreements.

Therefore, we believe that it's critically important for the Administration to take heed of the many concerns raised during today's forum and provide assurance that these issues will be addressed during the upcoming negotiations. I also urge that clear lines of communication be established with California agriculture during the negotiating process.

Secondly, I want to express our appreciation for the Administration's strong support for foreign market development and promotion activities. The continued funding of the Market Access Program and similar programs is critically important to California cooperatives. To the extent these programs remain permitted policies under the WTO, we urge they continue to be funded to the fullest extent possible.

My third comment relates to genetic engineering and biotechnology. The population of California's great central valley is projected to double within 25 years. In order to accommodate this growth, we anticipate tremendous expansion of new housing and commercial development onto agricultural land. Scientific innovation will be critical to keeping our producers efficient and competitive, while using less land, less water, fewer pesticides and adhering to stricter environmental regulation.

Therefore, to the extent the use of genetic engineering and biotechnology become issues in WTO negotiations, our trade representatives must take a strong stand against those who may seek to label, restrict or eliminate the use of these critically important technologies in the production of our agricultural products.

My final comment relates to one potential side effect of trade liberalization and that is the likelihood that increased numbers of exotic pests and diseases will be introduced into our State.

Exotic pest infestation is already problematic in California. Fortunately, our federal and State governments have been very responsive in providing the necessary funding to conduct effective, exclusion, detection and eradication programs.

However, as global trade increases, more tension will have to be given to preventing infestation by exotic pests and diseases. Our government must be prepared to deal with this increased threat and be willing to commit the level of resources that will be needed to maintain the effectiveness of our pest and disease defense programs.

Thank you for allowing me the opportunity to present these remarks this morning.