June 24,2003

Grassley Announces Bill to Expand U.S. Farm Exports

WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, todayannounced he will introduce bipartisan legislation to give the United States a new means ofincreasing farm exports. The Grassley proposal creates a valuable enforcement tool againstcountries that unfairly block U.S. agricultural products.

“Our agricultural exports are strong, but they can be stronger,” Grassley said. “Iowa and therest of the United States feed much of the world, but we can feed more of the world. We canincrease agricultural exports by continuing to sign new trade agreements and by enforcing existingtrade agreements. The more enforcement options, the better. This bill adds a new weapon to thearsenal.”

Grassley today will introduce the United States Agricultural Products Market Access Actwith Sen. Max Baucus, ranking member of the Committee on Finance. House members areintroducing a bipartisan companion bill. Many agricultural groups support the legislation, includingthe Iowa Farm Bureau Federation, the Iowa Corn Growers and the Iowa Soybean Association.

Grassley said the Bush administration is advancing new trade agreements and takingadvantage of ground lost in the absence of Trade Promotion Authority. The new trade agreementsare critical to increasing farm exports by opening new markets. However, the current tools availableto the United States Trade Representative -- including negotiations by the trade representative’soffice, challenges under the North American Free Trade Agreement, and challenges via the WorldTrade Organization -- don’t always accomplish the job, Grassley said.

For example, the United States’ NAFTA-partner Mexico is imposing, or threatening toimpose, barriers to imports of a wide variety of U.S. agricultural products. These products includecorn, high fructose corn syrup, pork, beef, rice, apples, and dry beans. Iowa is a major producer offour of these products -- corn, high fructose corn syrup, pork, and beef. Despite U.S. efforts so far,Mexico’s barriers and threatened new barriers remain.

Grassley’s new legislation adds another mechanism for strengthening the enforcement ofexisting U.S. rights for access to foreign markets. The bill requires that the U.S. TradeRepresentative identify and report annually on those foreign countries that deny fair and equitableaccess to U.S. agricultural products. Through prioritizing the countries that impose the mostbarriers, U.S. negotiators will be better able to focus upon removing the most egregious of thesebarriers.

Grassley said agricultural exports are particularly important to Iowa farmers. In 2001, about$3.3 billion worth of Iowa’s agricultural production was exported, making Iowa the second-largestagricultural exporting state in the country. Iowa’s largest commodities – corn, soybeans, pork, andbeef – greatly benefit from sales abroad. However, populations and disposable incomes areincreasing rapidly in foreign countries, so major opportunities exist for new exports.

“With the hardest-working farmers and ranchers in the world, and with productivityincreasing through improved technologies, the United States clearly has the ability to continuefeeding a growing world,” Grassley said. “American farmers should get the full benefit of our hardfoughttrade deals. And the world’s consumers should get the full benefit of America’s safe,abundant food supply.”

Following are:

(1) a statement on the bill’s introduction
(2) a bill summary


Comments of Sen. Chuck Grassley on the Introduction of the United States Agricultural Products Market Access Act of 2003
Tuesday, June 24, 2003

Mr. President, I’m pleased to introduce today the United States Agricultural Products MarketAccess Act of 2003. This bill will be yet one more tool for the United States to use to expand itsexports of agricultural products.

Agricultural exports are key to the economic health of rural America. Just last year, $53.1billion worth of U.S.-produced agricultural products were exported. About one-third of America’sfarm products are sold outside of our borders. These sales in foreign markets translate to improvedincomes for our country’s farmers. Today, approximately one-fourth of gross farm income for U.S.producers comes from exports.

Agricultural exports are particularly important to farmers in my state of Iowa. In 2001, some$3.3 billion worth of Iowa’s agricultural production was exported. This makes Iowa the secondlargest agricultural exporting state in the country. Iowa’s largest commodities – corn, soybeans,pork, and beef – greatly benefit from sales abroad. Approximately one-half of U.S. soybeanproduction, and 20 percent of our country’s corn production, is exported. Last year U.S. porkexports set record levels. Since the implementation of the NAFTA, exports of U.S. beef and beefvariety meats to Mexico have increased five-fold. Iowa’s producers clearly benefit from exports.

While Iowa’s agricultural exports are already high, they have the potential to grow evenmore in coming years. Demand in the U.S. market for agricultural products is relatively stable. Butpopulations, as well as disposable incomes, are increasing rapidly in foreign countries. With thehardest-working farmers and ranchers in the world, and with productivity increasing throughimproved technologies, the United States clearly has the ability to continue feeding a growing world.

But trade barriers imposed by foreign governments often cloud this bright spot for U.S.agriculture. Too frequently, misguided foreign governments overlook the wants and needs of theirconsumers and take measures to restrict, or prevent, imports of U.S. farm products. These policieshurt U.S. farmers. They also hurt foreign consumers.

In fact, due in part to foreign trade barriers, U.S. agricultural exports declined from $60.4billion in 1996 to $53.1 billion in 2002.

Unfortunately, even countries that should be our closest trade allies are proving adept atimposing measures that block imports of U.S. farm products. As an example, our NAFTA-partnerMexico is imposing, or threatening to impose, barriers to imports of a wide variety of U.S.agricultural products. These products include corn, high fructose corn syrup, pork, beef, rice,apples, and dry beans. Iowa is a major producer of four of these products -- corn, high fructose cornsyrup, pork, and beef.

Not surprisingly, much of U.S. agriculture is upset with Mexico and other of our tradingpartners at this time. U.S. agricultural producers have traditionally been the strongest supporters ofnew trade deals. But due to foreign trade barriers, some in U.S. agriculture are beginning toquestion their support for new trade agreements.

The U.S. Trade Representative, in conjunction with Congress, is working hard to removetrade barriers imposed by Mexico and other countries. But the current tools available to the USTR, including negotiations, NAFTA challenges, and WTO challenges, don’t always accomplish the job.

Let me give you an example. For several years now, Mexico has gone to great lengths toblock imports of U.S.-produced high fructose corn syrup. In 1998, Mexico imposed antidumping duties on imports of this product from the United States. The United States challenged this antidumping order under the NAFTA. Mexico lost at the NAFTA. The United States challengedthis order at the WTO. Mexico lost at the WTO. Following its defeats at the NAFTA and the WTO,Mexico revoked this antidumping order.

But, no, that wasn’t the end of the story. Mexico turned around and imposed a 20 percenttax on sales of soft drinks containing high fructose corn syrup. This discriminatory tax was designedto boost sales of Mexican sugar at the expense of U.S.-produced high fructose corn syrup.Mexico’s tax in effect shut down the Mexican market for this product. Iowa’s high fructosecorn syrup producers are now being locked out of what was at one time their largest export market.

This discriminatory tax is hurting Iowa’s high fructose corn syrup producers. It’s hurting Iowa’scorn farmers. This example clearly demonstrates that existing tools aren’t always enough to removeentrenched trade barriers. Despite losing at the NAFTA, despite losing at the WTO, and despitelengthy negotiations, Mexico is still blocking imports of U.S. high fructose corn syrup. It’s time toadd yet another tool to our arsenal.

That’s why I’m introducing the United States Agricultural Products Market Access Act of2003. This bill creates a new mechanism with which to confront foreign trade barriers. This newmechanism operates in a similar fashion to the existing special 301 provision for intellectualproperty. The bill requires USTR to identify and report on those foreign countries that deny fair andequitable market access for U.S. agricultural exports, or countries that apply to U.S. agriculturalproducts sanitary or phytosanitary measures that are not based on sound science. USTR wouldannually issue a report on its findings.

Out of the countries identified in USTR’s report, USTR would identify which ones have themost egregious practices impacting U.S. agricultural exports and, further, are not entering into goodfaith negotiations with the United States to end these practices.

This legislation also authorizes additional staffing for USTR to focus on these agriculturalenforcement issues.

This bill will further strengthen the ability of the United States to enforce its existing market access rights for agricultural exports. Perhaps just as important, it will help Congress and the Administration prioritize barriers imposed by our trading partners. Through such prioritization, U.S. negotiators will be better able to focus upon removing the most egregious of these barriers.

The United States Agricultural Products Market Access Act will not solve all of ouragricultural market access problems. We need to move ahead vigorously in bilateral and multilateralnegotiations to tear down barriers to our exports. At the top of this list is successful completion ofagricultural negotiations in the WTO. However, the United States Agricultural Products MarketAccess Act of 2003 will help us identify the most egregious problems, so we can focus our energyon fixing them. It will also provide a new enforcement tool to help make sure American farmersare getting the benefit of our hard fought trade bargains.

This bill is strongly supported by Iowa’s agricultural community, including the Iowa CornGrowers, the Iowa Farm Bureau Federation, and the Iowa Soybean Association.I would like to thank my distinguished colleagues Senator Max Baucus, ranking member ofthe Finance Committee, and Representative Dave Camp for their hard work on this legislation.

Mr. President, I ask unanimous consent that the bill and this accompanying statement beprinted in the Congressional Record.


UNITED STATES AGRICULTURAL PRODUCTS MARKET ACCESS ACT OF 2003

Background

• Since peaking in 1996, total U.S. agricultural exports have declined, and in 2002 were lowerthan in 1995.

• During the period 1997-2001, total agricultural exports from Iowa have declined and remainflat.

• In 2002, Iowa was the second leading exporter of agricultural products among the 50 states(in 2001, Iowa was third-largest).

Purpose of Bill

• There are two components of our efforts to expand U.S. agricultural exports: (1) thenegotiation of free trade agreements as well as expanded market access measures within theWTO; and (2) the enforcement of existing market access rights for the United States in othercountries.

• This bill adds another mechanism for strengthening the enforcement of our existing marketaccess rights for agricultural exports.

• This bill will also help Congress and the Administration to prioritize the practices of ourtrading partners that deny fair and equitable market access to U.S. agricultural exports, andto focus upon the most egregious of these practices in our negotiations.

What the Bill Does

• The bill operates in a similar fashion to the existing special 301 provision for intellectualproperty.

• The bill requires USTR to identify and report on those foreign countries that deny fair andequitable market access to U.S. agricultural exports or that apply sanitary or phytosanitarystandards for the importation of agricultural products that are not backed up by soundscience. USTR’s report will be issued annually.

< Of those countries, USTR must also identify which countries have the mostegregious practices that impact U.S. agricultural exports the greatest, and that are notentering into good faith negotiations with the United States to end these practices andprovide fair and equitable market access to U.S. agricultural exports.

• The bill also authorizes additional staffing for USTR to focus on these agriculturalenforcement issues.