MR. McCLURE: Thank you. Mr. Chairman, members of the committee, and distinguished guests, I appreciate the opportunity to testify before you today regarding negotiating objectives for agriculture in the next round of trade talks in the WTO.

For the record, I am David L. McClure, farmer/rancher from Lewistown in central Montana, and President of the Montana Farm Bureau Federation representing 8,500 member families in the Treasure State. Our members produce everything you can grow in our climate including, barley, oats, durum wheat, beef, wool, lamb, corn, sugarbeets, honey, and mint. Agriculture is the number one industry in Montana, and as a rural state, agriculture derives much of the economy and, more important, it defines our character and value as a people.

Montana agriculture depends on access to consumers around the world for the sale of over one-third of our production. Agriculture is one of the few US industries that consistently runs a trade surplus posting a positive balance of trade since 1960. US agriculture must be represented at the negotiating table at the next WTO round in a meaningful way with trade negotiating authority to ensure that this trade surplus continues.

The ability of agriculture to gain and maintain a share of global markets depends on many factors, including maintaining strong trade agreements that are properly enforced, enhancing the Administration's ability to negotiate increased market access for US Agriculture, and building the necessary changes to the WTO dispute settlement process to ensure timely resolution of disputes.

Montana Farm Bureau members, like US agriculture producers nationwide, are reeling from low commodity prices. In 1998, overall revenue from agriculture sales in Montana dropped 11 percent, according to the Montana Ag Statistics Service. Anecdotal evidence for '99, shows the chances of an even greater drop this year. Given an abundant domestic supply in the stable US population rate, the job of expanding market access and opening new markets for agriculture is more important than ever.

Agriculture's long-standing history of balanced trade surplus will not continue if we are relegated to the sidelines as new negotiations in agriculture commence. Moreover, global food demands is expanding rapidly, and more than 95 percent of the world's consumers live outside US borders. Despite significant progress in opening US markets, agriculture in other nations remains one of the most protected and subsidized sectors of the world economy. In addition, US agriculture producers are placed in a competitive disadvantage due to the growing number of regional trade agreements among our competitors. Global trade expansion has significant potential for American agriculture and for producers in Montana. But if the United States now leaves it to others to form new trade pacts and write future rules for trade, the US producers, processors, and exporters will be severely disadvantaged in the competitive marketplace of the 21st Century.

We urge that trade policies be developed and promote the growth in world trade, but not at the expense of US producers who have set the example for the rest of the world by opening our borders to free trade more than any other nation in the world. To this end, US negotiators must comprehensively address high tariffs, trade distorting subsidies, and other restrictive trade practices in the new round of negotiations on agriculture. As our first objective for the next round, Montana Farm Bureau supports expedited action for the next round of agriculture in the WTO. Our market is the most open in the world, we urge you that your representatives do not sit idly by while our competitors trade openly in our market, but deny us access to our markets on unequal terms. You must begin the negotiations and conclude them as early as possible to put Montana agriculture producers on a level playing field with the rest of the world.

To this end, I strongly commend you for supporting the goal to complete the agriculture negotiations by the end of 2002 to ensure our producers get increased market access in a timely manner. I urge you to stay the course.

I see my time is rapidly slipping away, so I'm going to skip through some of my written testimony and say that Montana Farm Bureau supports a single undertaking for the next round, wherein all negotiations conclude simultaneously with no early results for any sector, including tariff reductions for the Asia Pacific Economic Cooperation Sectors. The Farm Bureau is very concerned with the proposal for what they call "early harvest" that has been proposed, wherein some agreements might be completed and leave the tough issues until the end.

We have cooperated with and have an agreement with 82 other agricultural organizations and agricultural production efforts to oppose early harvest, and we would like the single undertaking to be the process that we use in these negotiations. That letter has been signed by all 82, and our entire congressional delegation in Montana supports our opposition to the "early harvest" proposal. Thank you.

MR. NELSON: Thank you, Dave. Panel?

MR. GALVIN: Perhaps, just a general comment in response to these first two statements. Remember the slide you saw, we had 8 rounds from 1948 until 1994, dealing with only industrial products. And so it was the Uruguay Round, for the first time, where agriculture got into the game.

So we want to make progress in this next round, we're all anxious to do that. We have to remember that it took us a long time to get to where we are with industrial products and we've really just begun now with agriculture.

But the second important thing is that a lot of those rounds took six years and eight years and ten years. There is a commitment here for this next round to go three years, which is very, very encouraging. We want to make this round not only productive, but also timely.

MS. LAURITSEN: I wanted to address the last issue that you raised because I suspect it will probably come up a lot today. And that is the issue of a proposal that was submitted a couple weeks ago for early and ongoing results and has now been framed and called "early harvest."

As we speak, there are discussions going on in Washington with USDA, USDR, and other departments, to make a decision. Agriculture's voice has been heard loud and very clear on this particular issue. We're very sensitive to their interests, and so we are in the process of deciding how to move forward on this in the next couple of weeks.

So I do want to say that your message has made it up to Secretary Glickman and Embassador Barshefsky, and they are consulting and trying to decide how to move forward.

I do have a question, though, from your written statement, and that's in the area of biotechnology products. I guess, have you done any analysis as to how we can move forward in ensuring that we have market access for biotech products without opening up the SPS agreement? Because I noted that was in your statement as well that you don't support reopening of the SPS agreement, and I don't think the US government is at a point either where we would want to open up the SPS agreement. But I was wondering if you have given any thought as to how we tackle this problem we're having with the EU on biotech in the new round?

MR. McCLURE: Well, thank you. And, yes, that is a concern of ours. We think that the SPS agreements are good the way they are and need to be enforced. However, the European community on bananas, beef, and biotech seems to be lying in the face of good solid science, so get to the negotiation table and express those concerns to them directly. And that's why we're concerned about what's called "early harvest." We think that agriculture would be the loser if we sign off on all the easy issues and leave the tough for last because it appears that agriculture is facing those tough issues in the negotiation coming.

I would also say that I also just returned from Canada where we met with producers up there, and I would like to thank Tim Galvin for joining us there. His reports, I think, really facilitated our efforts there to address border irritants and the problem of unequal access across the Canadian border.