Town Hall Meeting

in preparation for the 1999 World Trade Organization
Ministerial Conference (Seattle, Washington, November 29 - December 3, 1999)

MR. HADLEY:	Good morning, everyone, and welcome to this town hall meeting regarding agriculture and the World Trade Organization meeting coming up. My name is Rich Hadley. I'm president of the Spokane Area Chamber of Commerce, and we're pleased to be co-hosting this with Washington State University. Just three, four days ago in this same general area, there were leaders from across the State of Washington talking about the critical issues facing the state, and we talked about, of course, technology. We did, and we talked about education, but we also talked about agriculture and natural resources and international trade, and that's really why we're here today. We're very pleased that Director Jesernig is with us today and also Secretary Glickman, and they will be introduced in a few moments, but we're very pleased that they have come to this town hall meeting, but mostly we're really pleased that you're here because this is meant to be an interactive process where you have a chance to get some information, but also to share your own feelings about how things are going and also get information, as I said, about what's coming up with the World Trade Organization meeting in Seattle in November. As I said, we're cosponsoring this with Washington State University. So without further ado, I'd like to introduce Dr. Gretchen Bataille, who's cohost of Washington State University, to also give you her welcome. Please welcome Gretchen Bataille.

DR. BATAILLE:	Thank you, Rich. Secretary Glickman, Spokane Chamber of Commerce, representatives of the Seattle host organization, and the friends and producers of agriculture, it is my pleasure to add the welcome to this important event that celebrates the importance of agriculture to eastern Washington, to the state, and indeed, to the country and the world. Washington State University, as a land grant university in the State of Washington, has a commitment to ensuring that all voices be heard, voices that represent production, agriculture, natural resources, business, the environment, labor, and education. These issues will all be addressed at the 1999 World Trade Organization Ministerial Conference, and today we have an opportunity to get a preview of those concerns as well as the strengths that American agriculture brings to the world economy. I'm particularly pleased to have the opportunity to introduce Dean Jim Zuiches, who is in his fifth year as Dean of the College of Agriculture and Home Economics at Washington State University. Dean Zuiches has led the college in the development of a strategic plan that resulted in a major request to the Washington Legislature and that has brought in, hence, funding for research and cooperative extension through the safe food initiative. The coalitions that Dean Zuiches have built have been significant in drawing attention to the issues faced by producers and consumers in the state of Washington. As a member of the Board of Natural Resources in the state, as an active participant in Kellogg Foundation projects, and as head administrator at the college, Dean Zuiches is an appropriate moderator for today's panel. Washington State University is proud to be a cosponsor, along with the Spokane Chamber of Commerce, of today's town meeting. Thank you all for joining us today. The discussions I'm sure will be both provocative and informative. What more can we ask? Welcome.

MR. ZUICHES:	Thank you, Provost Bataille. I want to also extend my welcome this morning to Secretary Glickman, to our honored guests, and to all of those here who are involved in this food system production process that we are experiencing in the state of Washington. We're all looking forward to the WTO meetings in Seattle, and this meeting is the first of many town hall meetings that are being held to address the issues, to listen to the community in preparation for the meetings. Today I want to first introduce the Director of the Washington State Department of Agriculture, Jim Jesernig, who will then introduce the panel. Many of you know Jim Jesernig. He's served as Director of the State Department of Agriculture since 1993. He has the honor of having been appointed by Governor Mike Lowry and then reappointed by a new governor, Governor Gary Locke, in February of 1997. Few cabinet members have that kind of honor. As director, Jim serves on several agricultural advisory boards and committees. He works with the College of Agriculture and Home Economics as a member of our advisory board. I've had the pleasure of working with Jim since 1986 when I first came to Washington State University when he served in the legislature, first as a representative and then as a senator, and now in his role as Director of the State Department of Agriculture. He has been extremely influential, providing leadership to solve the problems of agriculture in the environment, agriculture in economic development, and agriculture in trade for the benefit of our state. Mr. Jim Jesernig.

MR. JESERNIG:	Thank you, Jim, for the introduction. I've got to tell you I dearly wish the football team was running as well as the College of Agriculture at WSU. This recent battle of the blues has almost caused me psychic problems here. So we're going to keep working on it, and hopefully they can get to the level where the dean's got the College of Ag. I have the opportunity to introduce a couple of folks, but I don't have too much time because we want to get to the questions. And instead of going through the specifics, resume, vitae, I'd like to just extend a thanks to both USTR, the U.S. Trade Representative's Office, and the USDA for their efforts around trade for Washington agriculture. With the U.S. Trade Representative's Office, Trade Representative Charlene Barshefsky, Peter Sheer, Eddie Clare, and the person that's with us today, Dorothy Swoskin, has worked very hard to try and find that elusive level playing field for agriculture internationally. And they have a lot of sectors to work on, and the fact that they have focused on agricultural issues I think speaks well of their commitment to the producers not only in Washington state, but also throughout the United States. And so I'd like to thank Dorothy for coming, and I'd like to have a round of applause for our USTR member. The second person that I get to introduce again needs no introduction, but I just want to thank Secretary Glickman for his personal commitment to the producers and farmers of Washington state and his department's commitment to the farmers in Washington state and the producers throughout the state. The secretary, as you know, has worked very hard on specifically our issues. I remember one of the first things we worked on was the CRP signing. That was awhile back. We've had a lot of bilateral fights with countries. They have been in our corner again and again. And the commitment on the part of the secretary and the department to listen to producers out on the ground to make sure they know what the issues are out there is manifest in the work of their work with the advisory -- the ag policy advisory committee they have, the ag trade advisory, ag technical committee, advisory committee they have, and the listening sessions they have throughout the last summer -- one we had here with Secretary Rominger in Richland to get real information on what are those critical issues facing agriculture. And if you see the issues that they are taking on, whether it's state trading enterprises, transparency, phytosanitary issues, all of those issues that are key to Washington agriculture's economic future, you can see that they listen and listen well. So I really -- I've got to tell you it's not so much an introduction, but just a thank you for your commitment to Washington agriculture, U.S. agriculture, the representatives that you have here in Washington state, their work, and in the Foreign Ag Service, have made a difference and will continue to make a difference for Washington agriculture. So with that thank you, I'd like all of us to welcome the Secretary of Agriculture for the United States Department of Agriculture, Secretary Dan Glickman.

SECRETARY GLICKMAN:	I'm stuck, so I'm going to stay here. Don't worry about it. We're fine. A hostage in Spokane forever. Well, first of all, thank you very much, Jim. Thanks for the outstanding work that you do. Jim has been one of the great leaders with the state departments of agriculture in trying to get us to focus on some of the real problems facing agriculture. I recalled when I landed in Spokane last night I came here in 1978, and it was in the midst of the farm crisis. And I don't know how many of you were there, but we went to Washington State, and in Pullman, we had a rally. I wouldn't call it a rally. I'd call it a town meeting. Then Chairman Foley, Chairman of the Agriculture Committee, held this hearing and several members of Congress. Anybody here remember being at that meeting? Some of you may remember that it was not always the most soft-spoken meeting in the history of the world. In fact, it was a rather volatile meeting. But we talked about agricultural issues during a very difficult time, which we now have this wealth, but I appreciate being back here. Jim talked about we worked on a CRP problem. Because of Jim's leadership and the leadership of your congressional delegation, both senators, Congressman Nethercutt and others as well, we were able to resolve that issue in a fair way for the State of Washington. So it's very important to be here, and we're here in the context of the WTO round, which begins at the end of next month. And after I finish, I would like Dorothy to say a few words to get some context to the trade round and what it all means. Let me just make a couple of quick points, if I might. Number one is the stakes for agriculture at this next WTO round are enormous. Most of you understand the impact that agriculture and trade has on farming. One out of every three acres of production in this country is exported. The fact is we are so extraordinarily productive that we have to rely on the rest of the world to take a portion of our agricultural production. And when farm exports are strong, generally the farm economy is strong, vis-a-vis 1996, 1997. When farm exports are weaker, the farm economy is weaker. Agriculture is twice as reliant on export markets as any other part of the economy, and you come from a very export-sensitive state. Per capita, you're probably the most export sensitive of any state in the country. And we have a lot in common because I'm from Kansas, and not only do we have agriculture there, but my city of Wichita also is the second largest Boeing facility, so Kansas and Washington state have a lot in common in terms of agriculture and in terms of exports. So agriculture is very reliant on exports. At the same time, as we go into this next WTO round, we've got to recognize that these subjects we're talking about, expanded trade, are not without controversy. There's a lot of strong feelings about globalization, ag exports, how we deal in a world economy, and agriculture must take all of these views into account and understand the concerns that are out there as we deal with the problem, these situations of opening markets. And I'm going to talk about a few of these things, perhaps during questions and answers. In 1996, agriculture trade was 50 percent higher than it was at the beginning of the decade, and both Washington and Idaho were ahead of the national pace, with export gains of nearly 75 percent between 1991 and 1996. While Washington accounts for just over half of American apple production, it is responsible for 85 percent of apple exports And I might add that this year, apple exports did bounce back, the marketing year, which ended in June, where we saw the second largest volume total of exports on record. So after a couple of very bleak years, largely due to the Asian financial crisis and problem with Mexico, U.S. apple exports in '98, '99, totaled nearly 670,000 metric tons, valued at 380 million dollars, up 17 percent in volume and 10 percent in value from the previous year. So that is certainly good news. Record worldwide agriculture production and the global financial crisis has led to an export decline, and that number has come down, but we still expect it to be about 50 billion dollars in ag exports this year, and by the year 2005, we expect it to reach 80 billion dollars or about one-third higher than it is right now. But a lot of this is based upon the expected continued market opening of products, and that's in trade liberalization. And that's why this next World Trade Organization round is so important because without further liberalization, these numbers won't grow, and the impact on agriculture will be especially acute. We have some real problems in agriculture that are going to have to be addressed in this next WTO round. Let me mention just a few. One is agriculture tariffs. Right now, tariffs on agricultural products average 50 percent worldwide. In this country, it is less than 10 percent. So you see this enormous disconnect between what other countries tariff their products versus what we do, and that puts us at a terrible disadvantage. Those numbers have to come together, down basically in the general area of where we are, and that is of a high priority. A second issue has to do with the problems we have getting our products into certain countries because they put standards on there on the basis of science that is not necessarily based upon sound science, and we are losing farm exports because of trade barriers erected in the name of flawed and unscientific procedures. We need to ensure that science-based regulations will encourage and not hinder scientific development in trade. Now, saying that, I will also say that there's a lot of controversy about these subjects right now, particularly in the area of genetic and modified organisms and other new technologies. And in addition to making sure that sound science govern, we need to make sure that our regulatory systems in the U.S., whether it's USDA or FDA or EPA, are of the highest level possible, which I believe they are, but we need to make sure that we maintain that high level arm's length from industry, sound science, and domestic regulatory procedures, so as to give both the American people confidence and the world confidence that we're doing the right thing for consumers as well as the right thing for agriculture. The third thing is we must completely eliminate export subsidies. The EU, European Union, accounts for 85 percent of the worldwide export subsidies. The U.S. is less than 5 percent, as I believe, of the total export subsidies. The reason for that is because the EU has a domestic farm program, called the Common Agriculture Program, which subsidizes their farmers at such high levels that they provide an enormous amount of production, that is they don't really control production very much. They have significant high subsidies, high production, and then they have to subsidize it in the world market in order to get rid of the product. And what that does is it not only puts us at a disadvantage, but it puts a lot of the Third World countries who would like to become self-sufficient at a disadvantage because they're basically dumping product out at lower than cost of production in many cases and lower than what it costs to produce in Third World countries in Africa and in Asia and in Latin America. We must open up state trading enterprises, like the Canadian Wheat Boards, so that they face the same risk in the marketplace as private traders. We have a lot of other goals in these things. My guess is that agriculture will be the most controversial but most -- I don't want to say it's more important than insurance or services or telecommunications, because it's not, but it's probably the one that has the highest blood pressure in the world, and it is the one that will probably determine whether this next trade round is successful or not, is to work out a lot of these agricultural issues. But the whole issue for us is to try to create a level playing field so that all farmers and ranchers can compete freely and fairly in the world market. USTR, the trade representative, has done just enormous work to try to build on what I've talked about today, and as a matter of fact, they have created a position over there called the Embassador for Trade for Agriculture. His name is Peter Sheer. He's confirmed by the U.S. Senate, and his sole job is to deal with agricultural trade, along with the partnership we have here at USDA. So our goal is, as we approach this November round, which begins in November and which hopefully can be completed within three years, is to work to determine what is in the best interest of not only American farmers and ranchers, but also what's in the best interest of American consumers as well because, folks, if they don't buy it, if they don't eat it, it doesn't really matter what we produce. And we've got to remember there's always that tie between wheat and agriculture and those on the other side who buy and eat and consume the product as well. So saying that, I would like Dorothy to make a few comments about how the USTR views this next round and especially as it relates to agriculture.

MS. SWOSKIN:	Thank you very much. It's a pleasure to be here. Since I'm a Washington State native, it's always fun to come back to the state. It's even nicer to be with Secretary Glickman and his team because we do work so closely with the department on pursuing our trade interests, whether it's setting the agenda for the WTO negotiations or working in partnership on a lot of the accession negotiations or the bid they work in the WTO. I think that it's important to recognize that when the President challenged trading partners to launch a new round, he did so in a rather unique way. He challenged partners to look at a new negotiating round geared to the needs and interests of the 21st Century and the lack of technological advances that will confront us. Agriculture for the United States is really at the core of this new negotiating agenda and the new round that we intend to launch in Seattle. It is important, but there are a lot of other issues that our partners throughout the world are interested in. That's why the President in setting out the agenda set out a five-part agenda that first and foremost talks about the expanding opportunities for American agriculture, but also focuses on the need to expand opportunities for U.S. manufacturers and services providers to also ensure that as the economy grows, that we have continued freedom for the future of new industries, for example, the telecommunications, Internet, information technology explosion where we're our leader, also putting a human face on the global economy, here looking for a way to ensure that we have a mutually supportive relationship to ensure that the interests and concerns from labor to the environment are well reflected. And here I think we've done a pretty good job of looking for win-win situations where everyone gains from an expanding economy. And finally, we have done quite a lot already to expand the family of members in the WTO. It was once an organization of 23 members. We at Seattle will I think have the opportunity to welcome a large number of countries who have finished their accession to the WTO, a number from the former Soviet Union. We will be up to between 136 and 140 by the time of the Ministerial, and I would say that that's the sort of best news for American agriculture because working closely with the secretary and his team, we've managed to negotiate very strong agreements to ensure that the rules of the game, particularly for agriculture, are part and parcel of the economic reforms that our trading partners are undertaking. So we're delighted to come to Seattle and launch the new negotiations. I would say that it's just the launch of new negotiations. We have to set the agenda and give enough direction to negotiators to go back to Geneva with a plan to ensure that we meet our objectives in a reasonably short period of time, that is a three-year negotiating round. We're going to have to drag a few people with us, and we're going to have a lot of debates. No doubt that agriculture is going to be one of the most contentious issues as we move forward. Thank you.

MR. RICH HADLEY	CEO, Spokane Area Chamber of Commerce
DR. GRETCHEN BATAILLE	Provost, Washington State University
MR. JAMES J. ZUICHES	Dean, College of Agriculture and Home Economics, and Director, Agricultural Research Center and Cooperative Extension
MR. JIM JESERNIG	Director, Washington State Department of Agriculture
MS. DOROTHY SWOSKIN	Assistant Trade Representative for WTO, USTR
SECRETARY DAN GLICKMAN	U.S. Department of Agriculture
DR. ISI SIDDIQUI	Trade Advisor to the Secretary (USDA)