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WTO Listening Session
St. Paul, Minnesota
June 7, 1999

Speaker: Teresa Howes
United States Trade Representatives Office

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MS. HOWES:

Hello. And thank you, Commissioner Hugoson, for organizing this event. We’re very grateful. This is a listening session, so I want to spend most of my time this morning hearing from our producers and agricultural industry representatives, but let me begin with a few brief remarks. The principles are agriculture trade policies, the Administration’s view of the need for a new trade negotiating round and the major agriculture issues it’s likely to address. To begin with, our agriculture trade policies rest on a few basic principles. They are opportunity, fairness, and respect for science. American farmers are the world’s most highly competitive and technologically advanced. Most of this -- because of this, we produce far more than we can eat ourselves, and we need to be able to export to 96 percent of the human race that lives beyond our borders. And with 25 percent of total receipts coming from agricultural exports, we are and will be in the future increasingly rely on export markets to remain profitable at home. These have been the Administration’s fundamental goals over the past six years and we have done reasonably well in achieving them. Most, fundamentally, through the WTO, we have created a set of international principles to ensure open markets and fair treatment for American producers. The WTO represents 50 years of bipartisan American leadership in the creation of an international trading system that brings down foreign trade barriers and promotes the rule of law in trade. It has raised incomes, created jobs and promoted American values of fair play and rule of law worldwide. We brought agriculture into the trading system in 1995 and the results have been quite good. First of all, the talks which created the WTO cut tariffs and created quotas where there was no access on farm and ranch products worldwide. We also cut foreign subsidies. We want consensus that health and food safety standards should be based strictly on science and public health, rather than serving as disguised barriers to ag products. At the same time, we created a strong enforcement mechanism that makes sure our trading partners live up to their commitments, and we have been the most active users of this system. We have succeeded in 20 of our 22 cases and nine, nearly half, have addressed agricultural commodities from fruit sales to Japan to pork in the Philippines, to dairy in Canada and, of course, those with respect to the EU, where we currently have imposed sanctions over the banana case and have announced our intention to do the same for beef, due to the EU’s refusal to comply with the WTO panel. And we have found new opportunities through a series of bilateral and regional agreements. Almonds in Israel, for example, beef in Korea, grains in Canada, pork and poultry in the Philippines, apples in Japan just to name a few. The most recent example, which is especially important to those of you in this area, is the bilateral sanitary and phytosanitary agreement we reached with China this April. This was made possible by the SPS agreement which went into effect in 1995. It has already lifted China’s ban on citrus products, wheat and other grains from the Pacific Northwest and meat and poultry from all USDA approved plants. When combined with cuts in the Chinese tariffs on beef and pork to 12 percent, poultry to ten percent, and substantial increases in the import quotas for wheat and corn, elimination of the soil oil quotas, and the quota for sunflower seed oil, we will see a major increase in U.S. ag exports. At the same time, however, the work is far from done. Numerous trade barriers and unfair practices continue overseas. To note a few examples of special importance to this region, there are high dairy tariffs, unscientific meat standards in the EU, high subsidies, tariffs and non-tariff barriers on sugar. And we see a very disturbing trend in Europe toward the disregard of scientific standards in biotechnology which could present a major feature threat to American agricultural exports. These issues and similar barriers to manufactured products and services led the President to call for a new round of international trade negotiations under the WTO. This will be the next major step in international trade policy, setting the world’s agenda for the years ahead. It will begin when the United States hosts and chairs the WTO’s third ministerial conference in November and our position as host and chair will allow us to shape the process and the agenda of the round. At the event itself, we hope to work toward consensus on a number of agreements. We expect the round to take three years and -- to conclude within that time, and we will address a number of issues beyond agricultural. Some, notably, liberalization of distribution services and customs reform will have significant benefits for farmers by ensuring that goods get to market in a timely fashion. And the agricultural issues themselves will be at the heart of our agenda. As Vice President Gore has said, our economy depends on a fully productive and competitive agriculture, and the round is our single, biggest opportunity in trade policy to make sure that American agriculture remains the world’s standard. Thus in the months ahead we’re beginning to set a specific agenda. Broadly speaking, we expect to address issues such as: Reduction of tariffs and barriers to our products overseas, promoting fair trade by eliminating foreign export subsidies and reducing trade distorting domestic supports, ensuring greater transparency and fairness in state trading, helping to guarantee that farmers and ranchers can use safe, modern technology, and in particular biotechnology without fear of trade discrimination and, lastly, ensuring that American producers have the right to effective remedies against dumping subsidies and import surges. As we prepare for this work we are consulting with American industries, with Congress and with our trading partners to set specific objectives. We need advice directly from you as producers and others in the ag industry on the specific objectives we should set, and that is why we are here today, because the best way to find out is to ask you. We are here to listen to you as producers, experts and people involved in the food industry. We want to hear your priorities, understand firsthand the problems you see in international trade and agree on the major opportunities we should expect to realize. With the right objectives and successful negotiations, we can ensure access to markets for America’s growers, ranchers and dairy farmers, as well as ensure safeguards against unfair practices in our market. We can raise living standards for American farm and ranch families. We can ensure good prices and healthy food for consumers and we can help to realize a broader humanitarian vision of a world free from hunger and with stronger protection for land, water and wildlife. This is a great opportunity for us. It’s the second of 12 sessions and we look forward to hearing your comments. Jim?


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