Thank you, Mr. Preisler. Paul Christ with Land-O-Lakes to be followed by David Livingston and to conclude the scheduled morning speakers is Mark Mosio.

MR. CHRIST:

I’m Paul Christ representing Land-O-Lakes located north of St. Paul and Arden Hills, Minnesota. First I’d like to start out and just express some appreciation for a couple of events that have happened under the existing world trade agreement. The world -- existing world trade agreement is better than the situation we had before the existing world trade agreement. Two things recently happened that are very helpful to the dairy industry. One is USDA reissued the unused DEIP allowance provided under the original GATT agreement. DEIP is a program for exporting U.S. dairy products with government assistance. There are limits provided under the world trade agreement and some of it wasn’t used. USDA has now reissued those allocations and we’re going to make full use of the authority given us in the world trade agreement that we have now. The second is I would like to thank the Office of Trade Representative for their vigorous pursuit of Canada. Canada under the world trade agreement is required to allow a certain amount of fluid meal products to be brought into that country. Canada has refused to accept those products up to this point. U.S. trade negotiators have gone after them through the world trade dispute mechanism, they won, it’s being appealed and I think they’ll win again and Canada will likely become in full compliance. This is a big deal for American dairy farmers, especially here in the Midwest because our fluid processing plants here in the Midwest do have pretty good access to some major market centers in Canada like Thunder Bay and Winnipeg. Before we enter into the new trade negotiations, there are two preconditions that we should take care of ourselves here in the United States. One of these is we should adopt fast-track authority. I think we will severely handicap our negotiators if we do not have fast-track authority where our negotiators can make final commitments on behalf of the U.S. government. Without that they’re not really negotiators, they’re just intermediaries between the final decision makers somewhere in Washington, maybe in Congress, and the negotiations. So we need fast-track authority. A second precondition I think we need very badly is the admittance of China into the World Trade Organization. China is the most populous country on earth, has one of the most rapidly growing economies and is a major player in world trade. If we ignore China, we’re ignoring a major player. So we need to have China as a participant in the negotiations so that when we’re done there’s one set of rules that applies to all the other participants and applies to China. If we don’t have China at the table, China writes their own rules, and we all play by a different set of rules. That’s going to be very disrupting. Finally, I’d like to get at our specific recommendations, and you’ve heard the same list from a number of other speakers. Now, these recommendations are consistent with those of the National Milk Producers Federation and of the U.S. Dairy Export Council, both of which we are members. First would be to reduce internal agricultural subsidies around the globe. Internal subsidies promote inefficient production. And that hurts people who are efficient. That puts extra product on the market and the price is lowered and efficient producers are hurt. We need to reduce import tariffs on agriculture products. For example, the EU and, I can’t remember the other one. Here it is. Canada and the EU have tariffs on dairy products of over 240 percent. That’s an absolute trade barrier. That’s not just making a little hurdle, that’s an absolute trade barrier and those need to be eliminated. Japan has 1,000 percent on butter and that’s an absolute trade barrier. So we need to relax -- get those trade tariffs down. We need to get them down where they represent little more than just a minor nuisance. I think a maximum of ten or 15 percent, but better off none at all. Non-tariff trade barriers, we run into this in the livestock industry in particular. We also run into it in grain and oil seeds with the prohibitions on GMO products in Europe. Beef, the issue of growth hormones. With dairy it’s the quality attributes of the milk that have no effect on human health or human -- or animal health. Nevertheless, the Europeans, in particular, have adopted a number of these things that have no serious effect on human, animal, plant life or health and nevertheless they restrict imports. Now, the existing trade agreement should take care of that. We have a sanitary and phytosanitary agreement as part of that which says we’re going to have world standards, everybody is going to agree on science-based standards and will allow free trade beyond that. Well, the Europeans say, "Science or no science, these are restrictions over and above anything that’s done on a world basis." So we need to get rid of non-tariff barriers. Finally, we need to get rid of export subsidies. They work just the opposite of internal subsidies. Internal subsidies encourage inefficient production. External subsidies discourage efficient production. So efficient producers get hurt both ways. World trade, free trade is good for everybody. It’s good for efficient producers. It’s good for the human race. It’s the same as creating more resources or more wealth. The human race gets a greater abundance of goods and services at a lower cost with fewer resources being used with free trade. Therefore, we need to promote free trade. We have to adjust to get there. Everybody else has to adjust to get there. But when the adjustment is done, we’re all going to be better off. Thank you.