Thank you, Dave. Thank you very much. Our next speaker this afternoon is Neal Fisher of the North Dakota Wheat Commission to be followed by Galen Affield of the Minnesota Wheat Growers. Welcome Neal.

MR. FISHER:

Thank you. Good afternoon, Under Secretary Schroeder, Director Howes and Ambassador Baas. My name is Neal Fisher. I serve as the administrator of the North Dakota Wheat Commission located in Bismarck, North Dakota. We provide export market development, promotion, research and trade policy services for an estimated 19,500 wheat farming operations within the State of North Dakota. We view this upcoming round as a prime opportunity to -- to provide a freer but fairer trade environment for our producers and we thank you for this opportunity to make our views known to you. However, when it comes to trade agreements U.S. farmers and those of us who are -- in particular who are located along the northern border have some justifiable apprehension. Since the Canada/U.S. free trade agreement became effective, we have endured a number of flaws in this accord that allow Canada to increasingly prey on U.S. producers and their domestic markets with their huge supply of spring wheat and durum. That happens to be the same commodities that -- that we produce along the northern border. NAFTA has perpetuated or possibly given the appearance of even legitimizing some of these flaws. GATT helped reduce overall export subsidies, but the European Union was left carrying a much larger stick than we here in the United States. At the same time state trading enterprises, that is the Canadian Wheat Board and the Australian Wheat Board, were left pretty much undisciplined. Meanwhile U.S. officials it seems have chosen to unilaterally disarm American wheat producers in the face of this competition by laying aside the short stick we once had, that is, namely, the Export Enhance Program or EEP. As you might guess, export subsidies, the state trading enterprises and other matters are very high on our list of priorities in things to do. My written text provides a more complete analysis of these issues and there are some supporting graphs in the handout that also help to support these arguments. In the area of export subsidies, we urge that all direct export subsidies be eliminated immediately. If an immediate end to subsidies is not realistic, then it seems that U.S. wheat producers might need to have EEP reinstated if they’re to try to compete in this global market. The United States has not employed export subsidies for going on four years, I believe, next month, but the European Union continues to do so and those subsidies have reached levels of $1.10 a bushel in this year of 1999. The United States is storing a disproportionate share of the world’s wheat stocks due to these inequities. We cannot sit by and watch our market share erodes further while our competitors employ these tools that we do not have or if we have them cannot use them. U.S. negotiators should adamantly resist any attempt by other countries to classify U.S. export credit programs as an export subsidy. These are the GSM-102/103 programs which are certainly not unique. Every other country that does major export business has a similar program. We find them to be in the category of minimal trade distortions and should not be challenged. However, to establish leverage on the issue of export subsidies with the European Union and other competitors, the U.S. administration should adopt an aggressive and fully funded export policy, that might include the restating of the Export Enhancement Program at its authorized level, optimum use of GSM-102 and 103 and the PL-480 provisions that are readily at hand. We do appreciate the progress that you’ve achieved in easing some of the sanctions with Libya, Sudan and Iran. We hope that exemptions for Cuba, North Korea and Iraq will follow. It’s interesting to note that I was visiting with two Libyans at a recent U.S. wheat marketing seminar just a week ago. They were key players in their -- in their national importing agency. And they said that when the sanctions went on they immediately switched to Canadian and were fairly comfortable in staying there except maybe for the high prices that they were charged by the Canadians under that situation. In the area of state trading enterprises, or STEs, the North Dakota Wheat Commission also urges U.S. negotiators to require that state trading exporting enterprises become fully price transparent and work toward a free market system. As the sole exporter of their respective wheats, the Wheat Boards in Australia and Canada, are legalized monopolies, something we don’t allow in this country if you look at the situation that is sort of ensnarling Microsoft right now. Beyond operating as a state sanctioned monopoly, the Wheat Board in Canada receives Canadian government subsidies in a number of direct and indirect ways; reduced rail shipment costs, government provided hopper cars, provincial warehousing, merchandizing cooperatives. The Canadian government and the Wheat Board also distort through mandatory grain cleaning requirements, set handling fees, highly controlled system for licensing of varieties, manipulation of the federal grading system year to year and protein and grade giveaways, if you will. These pricing practices which often involve under pricing quality provisions are the equivalent to an export subsidy and should be treated as such. If the Canadian Wheat Board is relying on price discounts and other secretive practices to capture market share in other countries, it’s also reasonable to believe that they might be doing that in this country as they overtake more of our market here. They refuse to disclose any of this information, so it’s very difficult to tell. In the area of sanitary and phytosanitary measures, since the last round these have been sort of the barriers of choice, if you will, unfortunately. The current SPS agreement has -- has proven to be a significant step forward and we would wish that it would not be reopened lest it cause some intrusion of some of the other folks that might want to change it for the wrong reasons. In the area of biotechnology similar to SPS issues, we should ensure that sound science prevails in the relationship to biotechnology, particularly with the European Union where it has become increasingly sensitive because biotech is already an established part of the agricultural system in many countries and should be left alone. Global trade of genetically enhanced commodities should not be restricted once the testing has proven that it’s safe for human consumption and the environment. In the area of market access, a lot of the non-tariff barriers were converted to tariffs but they are high at this point in many cases and need to be reduced. And closer to home, the Canadian ploys to restrict U.S. wheat moving into that market should also be scrutinized. In conclusion, we believe that the United States should be developing and enhancing its team of agricultural negotiators both at USDA and USTR and I guess that’s exactly what you’re doing by being here today. I think our light is blinking. I’d probably better depart from this. I thank you for the opportunity to appear today. We’ve gotten a few of the points out and you have my written testimony. Thank you very much.