The clock I'm looking at shows about 11:46. We have time for a couple more speakers before we break at noon. Our next speaker is Mr. Steve Phillips, of Phillips Foods.

MR. PHILLIPS: I want to first of all thank you very much for this time. My name is Steve Phillips. I'm Chief Executive Officer of Phillips Seafood Restaurants and also a company called Phillips Foods. And I'm here to discuss a situation that we might be confronted with which I think would give great damage to our company, our company in the United States and also Asia. We employ, I guess, about 3,000 people in the United States and we employ, I would say about 10,000 people in Asia. We, of course, have a group of restaurants and hotels. We also have a seafood processing factories. And we have two located on the Chesapeake Bay, one of those is called A. Phillips & Son, which my grandfather started back in 1914. And, of course, my sons are in the business now. So it's really four generations. And we have another factory in place called Deals out of Maryland. So we have two on the Chesapeake Bay.

I was confronted with a situation ten years ago running our restaurants. Our restaurants, I don't know if you're familiar with those or not, are noted for crab. That's why customers come to our restaurants for crab products. And about 55 percent of our restaurant business is derived from, you know, the sale of crab products. And ten years ago, because of the declining resource in the Chesapeake Bay, we were faced with the fact that I couldn't get crab meat to serve crab dishes on our menus for our customers that demanded crab. So I went in search for it and I went to Asia and discovered that -- I first went to the Philippines and really had to do my own feasibility study because there was no data. Then I went to Thailand. And they had a very similar crab that we have in the bay. It's a different crab call Pertunas. Our crab in the bay is called Calnaktase. That's a Latin name which I sometimes have trouble pronouncing. Anyway, it's a very similar crab.

So really for the survival of our restaurant business and employees that we have within those restaurants, you know, I opened a processing plant in the Philippines, a small one first, basically to supply our restaurants. And, of course, a lot of our restaurateurs had the same problem. You know, they could not get crab meat, especially during the winter months. As you know, or maybe you don't know, in Maryland, crab meat is seasonal. People don't crab during the wintertime. The factories don't operate. It's a real issue and a real problem. And, of course, our restaurants stay open on a year-round basis.

Since that time ten years ago when I went there, we've had such demand for our product that we've, in the last several years, opened offices in Newark with our own people. We don't use broker networks. With our own people. New York, Florida, Houston, Chicago, Texas, London and in our business the demand for our product has grown tremendously. Crab products now throughout the United States is kind of like a, quote, hot menu item. And out west, you know, people that never knew anything about crab before, you see those on all the menus in restaurants all throughout the United States, where before it was just a regional product.

There has been a surge in quotation crabbing. Where there's been even more of a surge in the demand that's been created for these products which has, you know, has to be considered also.

We spent a lot of money and a lot of time and a lot of effort. We're a very customer-driven company. You know, we do the Boston seafood show, Chicago hotel and motel restaurant show, Las Vegas seafood show, San Francisco seafood show, a lot of shows all the time to help create a demand for our product.

The problem we're really confronted with is some of the U.S. packers also, unfortunately, are facing declining raw material to really process because of the decline in the natural resource. You know, sometimes it's an excuse maybe for another problem. I think it's human nature. And blame it on foreign importation.

The crab meat that we import, we don't dump that crab meat. It sells at the same price or at a higher price than domestic product. It's not really a dumping issue at all. You know, without imported crab meat, I think all of us that maybe enjoy crab cakes, if it's not allowed, those import quotas imposed, we may be paying $35 for a crab cake sandwich or $50 for crab meat. All seafood restaurants would be damaged severely if that occurred.

You know, the real cause of this whole issue is not really importation. To me, it's really the decline in our resource. If you look at the Chesapeake Bay, when I was a young boy growing up, my grandfather was a waterman. I used to go oystering with him in the wintertime, crabbing with him in the summer. I looked down in five foot of water and you could see the bay grasses going and the bay was very plentiful. We had a tremendous oyster harvest. That's pretty much gone.

Our rock fish in the Chesapeake Bay were pretty much depleted several years ago. The soft shell clam industry is basically gone. And, you know, the crab is, of course, taking all the stress because that's pretty much the only thing left. And, you know, this year, once again, started out to be a bad year. The factory that we have in Hooper's Island over pretty much 90 percent of our production so far year to date has been from Louisiana crabs that we import into Maryland from Louisiana. Probably half the crab meat in Maryland is crab is from out of state.

So, you know, it's a real issue that we're confronted with. You know, I certainly don't want to see any harm, you know, come to our fellow packers in Maryland or North Carolina or Virginia, but, you know, it's not really the importation of crab meat. It's the decline in the natural resource.

So, thank you very much for letting me speak.

MS. HOWSE: I do have a comment. You've been very tireless in your efforts and I think have done a very good job of bringing this to the attention of Ambassador Barchevsky and others. I've seen letters and all. So I must commend you along with your Congresswoman who's also written to us and called several times, just so you know. There are two sides to every knife and we hear very well what you're saying.

To my knowledge, no one has approached us with a request in the U.S. government to take action so far.

MR. PHILLIPS: I understand. Thank you for the time. I know Americans are for free trade. I just hope American deeds match American words. So thank you.