Our next speaker is Ken Klippen, United Egg Producers, United Egg Association.

MR. KLIPPEN: Good morning, distinguished panel, honored guests, ladies and gentlemen, my name is Ken Klippen and I am vice-president and executive director for government relations of United Egg Producers and United Egg Association. And I appreciate the opportunity to convey those associations' views on barriers to agricultural trade, the U.S. government's position on agricultural policies under the World Trade Organization, the WTO, and the effect of import restraints on U.S. egg industries.

United Egg Producers represents approximately 80 percent of the egg production in the United States while United Egg Association represents 95 percent of the egg further processors. It is the consensus of those groups that the United States can utilize the opportunity to present in the upcoming negotiations of the WTO to expand its exports. The U.S. egg industry supports fair and open markets throughout the world -- I guess that's called the equivalency issue -- and appreciates the opportunity to highlight specific trade barriers currently happening so that we can point out these unfair trade practices.

In a letter to President Clinton dated April 1, 1999, my organization co-signed a letter with 56 other national associations and food producer/processor groups supporting the new round of multilateral trade negotiations under the WTO. And many of the objectives were highlighted in the Under Secretary's comments.

From the perspective of the U.S. egg industry, the substantive objectives of the Round should include that all industries should be part of the overall negotiation process -- a single undertaking.

All products and policies should be on the negotiating table. We should not allow our trading partners to exempt certain agricultural products in the talks. In particular, Canada's supply managed commodities including eggs must be subject to negotiation.

Export subsidies, including the Canadian subsidies for processed egg products, should be eliminated. Rules to prevent circumvention of subsidy disciplines should be tightened.

Dispute settlement procedures should be streamlined and improved, with particular emphasis on ensuring the good faith implementation of panel decisions.

Sound science and risk assessment should be the foundation for sanitary and phytosanitary measures.

Social policies, such as animal welfare or the well-being laws in the European Union, should not be confused with health-based sanitary and phytosanitary measures. The U.S. should insist that the EU honor its obligations by respecting the zero tariff on inedible eggs exported from the U.S. to Europe. Recent European regulations apply different requirements to American products than those applied to the same products produced in Europe, nullifying and impairing U.S. benefits from the zero tariff.

The U.S. egg industry exports nearly three and four percent of its annual U.S. egg production but sees exports as a source of growth in sales as 96 percent of the world's consumers live outside the U.S. In terms of quality, U.S. eggs are superior. The U.S. is the only country that sanitizes, oils, and refrigerates its eggs from farm gate to supermarket door. Furthermore, the U.S. egg industry due to technological advances can produce an economical shell egg and egg product that can compete worldwide. Unfortunately, several countries do not afford fair access to imported eggs and egg products.

European eggs are subsidized and thus have the lion's share of the European markets. Canada export subsidies violate rules existing under the GATT.

The U.S. egg industry utilizes its inedible eggs, that's cracked eggs, in the manufacture of pet foods and animal feeds. The volume represents about two percent of the nation's production. The EU has enacted regulations that contravene the multilateral negotiated agreements of the GATT by requiring a different denaturant for imports than the EU is using themselves.

On behalf of United Egg Association and United Egg Producers, I would like to thank the USTR for providing the opportunity to present this testimony on agricultural trade policy and import restraints affecting the U.S. egg industry. The egg industry supports, once again, fair and open markets throughout the world and is hopeful that the form for negotiations through the WTO remain the viable means for achieving this worthwhile goal.

Thank you.

UNDER SECRETARY SCHUMACHER: Thank you very much, Ken. Again, it's very helpful for us to get out. I was not aware, maybe I'm just not studying enough, Teresa, is in Canada, we knew what they were doing in dairy. That's the first time I heard that Canada -- did you know that?

AMBASSADOR BAAS: No, I didn't.

UNDER SECRETARY SCHUMACHER: Could you send us a note, Ken, on an update as to where you feel that Canada is subsidizing -- two issues. The subsidy on Canadian egg products. We knew they were doing it on milk and we've taken it to the WTO. But we would appreciate more information on that if you could give that to us in writing.

MR. KLIPPEN: It's in my comments.

UNDER SECRETARY SCHUMACHER: Very good.

MR. KLIPPEN: In great detail.

UNDER SECRETARY SCHUMACHER: And the issue of the denatured, the egg powders, that is something new to me as well. I see the EU all the time. I have dinner with the French regulatory person. Maybe not a bad idea to let him know we have a little problem with her regulations on denatured egg powders for the lack of -- what they do has to be consistent with their import regulations. Those two are very important. I appreciate you bringing that to our attention.

MR. KLIPPEN: In my written comments I have details on both those trade barriers and I have presented those as well to Ambassador Barchevsky as well as to Secretary Glickman and I've visited with Tim Galvin, FAS, to thoroughly explain what the issues are. But I'd be able to provide additional information.

UNDER SECRETARY SCHUMACHER: For poor old Jack Tarburton and I. Bring this more to our attention.

MR. KLIPPEN: Yes.

UNDER SECRETARY SCHUMACHER: I'll keep pushing on my colleagues here to get that a little higher on our priority list.

MR. KLIPPEN: Thank you very much.