MR. COX: Good afternoon, ladies and gentlemen. My name is Ron Cox. I am the CEO of

Sales U.S.A, Inc. of Salado, Texas. Our company processes lemon juice concentrate and lime juice concentrate. We're a small business in a very competitive category.

I'd like to take this opportunity to commend the USDA and the USTR for holding this important listening session on the agricultural negotiations of the World Trade Organization in Austin, Texas. And I certainly want to take this opportunity to thank Commissioner Combs and the State of Texas for this magnificent meeting place.

Mr. Chairman, I fully support liberalization of global agricultural markets. I also am in full favor of reducing and eliminating tariff and non-tariff barriers in agricultural trade. But as you know, trade is a two-way street. If we want other countries to reduce or eliminate their tariffs and non-tariff barriers on agricultural products, then we must also do the same. A case in point is the U.S. tariff for frozen lemon juice concentrate, which at present is some 50 to 60 percent of the value of the imported product. Ladies and gentlemen, this is an excessively high tariff. As a matter of fact, the U.S. has the highest tariff of any country in the world for frozen lemon juice concentrate. This high tariff has caused a small company like Sales U.S.A to pay more than $600,000 in tariffs over the last years.

The reason this tariff is so excessively high is because we are protecting a couple of U.S. companies. Even the European Union, which also has an important lemon juice industry in Spain and Italy, assesses only a 15 percent ad valorem tax on their imports of frozen lemon juice concentrate. How can we talk about other countries reducing tariffs on our agricultural products when we have such excessively high tariffs for agricultural products?

This kind of prohibitive high tariffs puts businesses like mine at a disadvantage vis-a-vis my competitors in Europe and Canada, to name a few. They have access to lower priced frozen lemon juice concentrate than Sales U.S.A. I either have to pay the high tariff or buy it here in the U.S. at a very high price. This tariff causes an artificially high price for lemon juice to consumers.

I recommend that the tariff on frozen lemon juice concentrate be eliminated immediately as part of the WTO agricultural negotiations. I would also like to recommend that the harmonized tariff schedule of the U.S. be simplified in order to make it easier for small businesses like mine to use. Specifically, I'd like to propose that so-called special tariff rates be converted to ad valorem tariff rates. It would be much easier and transparent if all agricultural tariffs would be based on a percentage of the value of the product, or ad valorem tariff rates.

Thank you for your attention to this important matter for my company. I look forward to working with our U.S. negotiators in achieving the elimination of excessively high and unfair agricultural tariffs as part of the WTO negotiations.

MR. GALVIN: Thank you, Mr. Cox. I was unaware of this specific issue, so I don't really have any comment. But it's interesting.

MS. BOMER-LAURITSON: I just have a question. Where do you source most of your product now?

MR. COX: After I buy it, I store it in our own freezer.

MS. BOMER-LAURITSON: No. Source it.

Where do you buy it from, what countries or domestic --

MR. COX: It's a commodity and it's produced in several countries. We've bought from Spain and, of course, California, Arizona. Mexico has just had a plant come on-line in recent years and we've bought from them, and also Argentina and Uruguay. But it's -- we're paying something less than $6 now and the tariff is -- has a complicated formula to come to the tariff, to figure the tariff. And we're paying something under $6, and the tariff is something over 2.50. So when you're buying 52 gallons to the drum and 70 drums in the container, you're talking about a lot of tariff.

MR. GALVIN: You mentioned that you buy at least some of it from Spain. And that makes me wonder, does Spain subsidize the export of the product, and is the high tariff intended in part to kind of offset the effect of that high export subsidy and therefore maybe level things out a bit?

MR. COX: I don't think I can tell you what you want to know about that, because we've bought from Spain in the past. And in the past, I'm talking 10 years ago. So I'm not sure.

MR. GALVIN: Oh, okay. That's all right.

MR. COX: I sincerely thank you for the opportunity.

MR. GALVIN: Thank you.