Thank you, Secretary. Our next speaker this afternoon will be Amy Germershausen. I bet you I’m nowhere near close, but I tried. And on deck is Allan Skogen and Allen you do have a fax waiting with Amy in the back of the room. And following Allan will be Shelden Melberg. So Allan if you’re in the room you have a fax waiting.

MS. GERMERSHAUSEN:

My name is Amy Germershausen and I’m the international sales manager for Froedtert Malt which is a division of the International Malting Company. And I’m going to continue on talking about state trading enterprises.

Froedtert is a medium size agribusiness. We manufacture barley malt by purchasing barley and processing it and we sell it to brewers and -- 95 percent of our sales go to brewers, about five percent to food users and distillers. We employ about 260 people in three Midwestern plants in Milwaukee, Wisconsin, Winona, Minnesota, and Chicago, Illinois. And I’ll give you a quick and brief history of our export experience. We used the export enhancement program successfully to introduce ourselves into basically Latin American markets where Europeans had had quite a considerable advantage from coming up on 40 years of export restitution. The EEP program which was as we’re all familiar with mandated to counter unfair trade practices, we used it to introduce ourselves and to make inroads into a market that was very heavily subsidized. With the finalization of the Uruguay Round of GATT negotiations, a phase down of agricultural subsidies on agricultural commodities was agreed upon and implemented. Despite Congressional intent and the 1995 farm bill to continue the use of the EEP, we were able to use the EEP was not continued. However, we were able to compete in the international market without an EEP for a year-and-a-half and which I think counters the claim that the U.S. malting industry can compete on an equal playing field. The conditions changed. We had some relative changes in barley markets around the world and the continued support from the EU and Canadian governments and so we were forced out of these key markets. In one of our best years we were exporting between 12 to 15 percent of our production. We now export very little and the U.S. industry as a whole exports only to Mexico and Japan which are -- we’ve never used the EEP and to the Dominican Republic which was an EEP market but now we are able to maintain independently. The unilateral abandonment of the U.S. of the subsidy phrase agreed to in the Uruguay Round has serious implications for the U.S. malt industry beyond the loss of regional markets. The world beer consumption during this time period has increased which has also naturally increased the demand for ingredients and for processing capacity, as well. I have some charts attached to my written testimony that will show that. It will show the strong growths in exports of malt from the EU and Canada while the trend line in the U.S. has remained flat. The European Union has shown that they do not adhere to the spirit of the Uruguay Round agreement as shown by the increase both in the volumes of subsidized exports as well as the value in the recent years. The more troubling issue for us is the new malting capacity being planned in Europe. Canada in the last ten years has increased their malting capacity and in the same time frame the U.S. has, in fact, shut malting capacity down in the past year and we’re considering future shutdowns. Faced with the discouraging prospect of competing in this market dominated by increasing subsidized sales, Froedtert Malt has participated in the formation of the International Barley and Malt Coalition for Free Trade. This unusual grouping of barley producer organizations, grain companies and malting interest was organized earlier this year with the express purpose to advocate a zero for zero objective for trade in barley and malt. The group proposes that all trade distorting policies be eliminated effectively permitting zero export subsidies and zero import tariffs. Exclusive importing and exporting powers of state trading enterprises must also be eliminated and countries should continue to decouple domestic support programs. The following is a list of coalition members and their official statement and interest. Since the organizational meeting a number of additional trade entities in the U.S., Canada and Australia have expressed interest and soon may become members. I think the interesting point is we’re working as an industry. We’ve got the backing from the Alberta Barley Commission, the U.S. Grains Council, the National Barley Growers Association, as well as most of the major maltings in North America are committed to working through this and we are asking for the -- our mission statement is through multinational negotiations. World barley and malt trade will be liberalized by January 1, 2000, with the following zero for zero objectives: The market access, the complete elimination of import tariffs, import quotas, import licenses and other non-tariff barriers to trade on -- on barley and malt, all sanitary and phytosanitary restrictions subject to internationally accepted scientific review and to constrain the monopoly powers of importing state trading entities by making the import of barley and malt subject to progressively greater levels of competition with private traders. The export measures include the simultaneous implementation of the following liberalizations: The complete elimination of overt export subsidies, a prohibition on export taxes on barley and malt and export state trading entities must operate at the risk of the market and eliminate their monopoly powers. And if a phase out schedule for export subsidies is agreed to, barley and malt shall be disaggregated so that each is separately disciplined according to the original base period, ’86 to ’90, that was used in the Uruguay Round. Scheduled reductions on each project will be -- product will be taken as if disaggregated reduction had taken place since the UR implementation. And we also include that domestic support program disciplines cannot be allowed to circumvent the intent of the market access or export measure sections of this mission. I’ve also included some quotes from some of the members of our organization. And we appreciate the opportunity to present this information. Thank you.