He's Assistant to the U.S. Trade Representative for Agricultural Affairs and Office of the U.S. Trade Representative. He assumed that position in June of 1997. In his 17 years at USTR, Mr. Murphy has served successfully as assistant to the U.S. Trade Representative for Japan, for Europe, and the Mediterranean and for Latin America and Caribbean and Africa. And also Mr. Murphy has led U.S. delegations to the OECO Trade Committee. So please welcome Jim Murphy from the U.S. Trade Representatives office.

JAMES MURPHY: Thank you, Mike, and thank you Governor Johanns for that warm welcome. We could not agree more that this is an extremely important event and a great opportunity for Jim Schroeder and the USDA and myself to be here to welcome those of you enaged in the production of agriculture. I also want to thank you very much your State Director of Agriculture Merlyn Carlson and his team for the excellent work that they have done organizing this event. They put a lot of time and effort into it, and I'm sure we're going to see the results of that today.

This is a listening session as the Governor noted, and Jim Schroeder and I are listeners, and you all are the talkers. We are just going to take a few minutes at the beginning for a few comments to set context, but we very much want to hear what you have to say. I'm going to say a couple of things about principles of trade policy and U.S. trade policy, something about this new round that's coming up at the end of the year and what we think the major ag issues will be for that round.

U.S. ag policy is in many respects a very simple thing based on a few fundamental facts. First and foremost is that American farmers and ranchers are by far the most competitive and technologically advanced in the world. And as a result of that, we are producing more than any of us can possibly eat in this country or all of us can eat in this country. This leads to the stable fact that we must export to survive. We will only have a prosperous farm economy if we export the surplus that is produced.

The Governor noted and I have in my notes as well that 96 percent of the world's population is outside of our borders. This is where the markets are. Also useful to note, that's going to grow in this market. It is it's an Asia; it's in Latin America. Yes, we've seen problems over the last couple of years brought on by the financial crisis in these areas, but I think we are all working on the understanding that will turn around and those markets will grow once again.

And as the Governor noted, the U.S. exported quite a bit in the several billion dollars from Nebraska to those markets. Providing access to those markets is absolutely essential to the prosperity of the farm community. And this in our view is where trade agreements come. The role of those agreements is to set the rules. We have rules other among trade players so that you do have a fair deal.

In the Uruguay Round of negotiations, we made a good first start on bringing agriculture the first time under the rules that apply to other sectors. We cut tariffs, we cut subsidies, we guaranteed some market access, we created a sanitary-phytosanitary agreement, we set the rules for determining safety of food on a sound basis of science, and we created a more effective enforcement mechanism. The U.S. has been the most aggressive user, and we've won 22 out of the 24 cases we brought in the process. About half of those have been in the agriculture area. And there we have great success in food to Japan, pork to the Philippines, dairy to Canada, and beef into the EU.

We won that case and the results, we are still struggling. We've also done a number of bilateral trade agreements such as beef to Korea and, of course, we've done an agreement with China which I think many will acknowledge -- particularly the tariff reduction area where just one example the beef had come down from 45 percent to 12 percent. All that being said, we all acknowledge that much remains to be done.

As the Governor noted, a lot of people don't think we have a lot of playing field. We simply agree with that perspective. The Uruguay Round is only a start, and many problems remain for us. And that is why the President has called for a new round of trade negotiations in the WTO. That round will be launched this fall at the Seattle Ministerial which is the third of the ministerials. It is both hosted and chaired by the United States. And will allow us to help shape the agenda for this coming round.

Agriculture is part of what we call the built-in agenda for this ministerial in the sense that at the conclusion of the Uruguay Round, it is acknowledged that we only made a start, that much remains to be done. This is true in services as well. These two areas were included in the Uruguay Round agreement as the next order of business. Part of the built-in agenda. So it's clear that agriculture will be on the table when we start in again from our perspective will be a part of those negotiations.

This is a footnote, I will note that the Seattle ministerial will be the largest trade meeting to held in the United States. 134 member countries are all expected to be represented there, and we're probably looking in the neighborhood of 5,000 people. It will be a very large event, and the -- I'm suggesting it's a great opportunity to show case American agriculture both on the meeting in Seattle, but we urge people to consider inviting some of the delegates to visit sites in your state to see American agriculture as it operates.

Now the agenda for this round, we can say a couple of points about that. At first instance, there seems to be a pretty good developing consensus that this negotiation should be concluded in three years. That's to the roughly eight years that it took to do the Uruguay Round. We simply don't have that much time. There are too many pressing issues that we need to address.

The second point is that we have pretty good consensus of people of what we call the architecture of the Uruguay Round. You recall in that agreement there were three basic legs to that agreement. The first is market access. Here we need to reduce tariffs further. We need to increase the quotas and tariff rate quotas and to improve the administration of those CRP's.

The second school is export subsidies and here our position as we like to see all export subsidies completely eliminated. Now many people think that is an unrealistic goal, but I would note a couple of things here. One, the 15 countries who were organized for agricultural trade liberalization are on record for eliminating subsidies.

Secondly, in the free trade area, all 34 countries in the hemisphere are on record to eliminate export subsidies on those negotiations and those negotiations are in progress.

And, thirdly, you'll notice in the recent agreement with China as part of their concession, China has agreed to forego any use of export subsidies. So that's not a bad coalition to start out with. I wouldn't want to pretend it was going to be easy or I would say even -- obviously our European friends will be not so acceptable, but we do go in with a fairly good head of steam.

The third leg is, of course, domestic supports, and here we need to further reduce domestic supports which are our European friends and other countries are also still engaged in using.

Two new issues that were not addressed in the Uruguay Round which needs to be addressed at this time, one is state trading enterprises referring to the Asian Beef Board, Australian Beef Board and similar government-sanction monopolies. We get a lot of complaints about the activities of those groups. And we clearly need more transparency in their operations.

And the second new area is what we're calling new technologies and which we include biotechnology, and here we need to find ways to ensure that American farmers can use these technologies and not face trade discrimination in their products and exports when they do so.

Now as we prepare for these negotiations, we are consulting with Congress or our advisory committees, trade associations and holding these 12 listening sessions around the country. And that's why we're here today is to get your advice, your views. We want to make sure that we're not missing issues. We want to get your advice on issues that outline if there are things that we are missing.

Biotechnology is not addressed in the Uruguay Round. Is there a biotechnology issues that we're missing this time around? And so your thoughts on that would be very helpful to us.

We think with the right agendas, priorities, we can have successful negotiations and make a long step forward to a level playing field for American agriculture. And in the process, raise our living standards and those of others and pursue a humanitarian mission and a world free from hunger and increased protection for our land, our water, and our wildlife.

But we see this as a great opportunity and, again, I want to thank you, Mr. Carlson and his team, and we will look forward to hearing your advice. We will be listening very carefully and have an opportunity to ask questions of you as you make your statements. And with that, I will sit down and thank you.