July 23,1999

Roth Statement at USDA/USTR Listening Session on World Trade Organization Negotiations on Agriculture

WASHINGTON-- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today submitted the following remarks at the Listening Session on World Trade Organization Negotiations on Agriculture in Newark, Delaware:

"As Chairman of the Senate Committee on Finance, which has jurisdiction over trade matters, I am glad to have this opportunity to submit testimony to the United States Trade Representative's Office (USTR) and the United States Department of Agriculture (USDA) regarding agricultural trade priorities for the upcoming World Trade Organization (WTO) negotiations. These negotiations are vital to the United States economy generally, and to our farmers in particular. That is why I applaud the USTR and the USDA for reaching out to the agricultural community here in Delaware, and throughout the country, through these listening sessions.

"The upcoming negotiations are of tremendous importance. Five years ago, the members of the WTO concluded negotiations on the Uruguay Round agreements. One of the biggest disappointments of those negotiations, however, was the failure to secure significant market access commitments from our trading partners in the area of agriculture. While some progress was made in that area, it was clearly not enough. We still have a world market in agriculture that is closed to our exports by significant market barriers, subsidies and other government interventions.

"Recognizing that not enough was done in agriculture at the Uruguay Round, WTO member countries agreed to revisit the issue of market liberalization in this sector by a date certain. That date is January 1, 2000, with negotiations on agriculture scheduled to begin by that time. With these negotiations soon upon us, we must ensure that our trade negotiators at USTR and USDA are in a position to achieve significant opening of foreign markets to our farm products. We cannot let this opportunity pass us by.

"Increased market opportunities in agricultural trade are of tremendous importance to American farmers and to our economy. In 1998, the United States exported about $54 billion in agricultural products, constituting about 20 percent of all U.S. agricultural output. Agriculture is also vital to the Delaware economy. There are over 2800 farms in the state and they produce a gross income of $860 million, a significant portion of the state's GDP. Poultry plays a central role in this. Approximately 65 percent of Delaware's cash farm income in 1998 was from broilers. And of course, Sussex County alone is ranked among the top counties in the country in chicken production. Agricultural trade is also important to our port in Wilmington, which is a significant transit point for farm products.

"The recent downturn in the farm economy in the United States -- as a result of the global economic crisis and other factors -- has made increasing export opportunities for our farmers all the more important. Part of what we must do is to encourage the rest of the world to follow the economic principles that have made the U.S. economy so strong and resilient -- free markets, free trade, lower taxes, a stable currency and less government regulation. This will ensure that other countries can afford to buy our farm products. What we must also do is to eliminate those factors that have closed foreign markets to our exports. After all, our farmers are the most efficient in the world. If given the chance, they can compete with any producer, anywhere in the world.

"While the issues in agricultural trade are varied and complex, there are certain fundamental objectives that our negotiators must pursue.

"First and foremost, we have to seek an elimination of barriers that restrict our access to foreign markets. Specifically, we should seek a reduction of tariff and non-tariff barriers in foreign markets to United States levels or below. We should negotiate only on the timing and the speed of implementation of these reductions.

"Second, we have to seek the elimination of foreign government export subsidies in the area of agriculture. These subsidies not only hurt our farmers in their ability to compete fairly in our market, but are also extremely problematic when we compete with subsidizing countries in third country markets.

"Third, we must seek elimination of trade-distorting support programs in foreign countries.

"Fourth, we have to ensure that foreign regulations should not be used to exclude American farm exports. While existing WTO commitments are clear that health-based trade restrictions, for example, must be based on sound science, many of our trading partners have failed to live up to these standards.

"Finally, we have to ensure that the negotiations are structured in such a way to ensure maximum leverage in the area of agriculture. Closing on other sectors and leaving agriculture to the end is, in my view, a recipe for failure. The issues in agriculture are, as we all know, extremely sensitive for our trading partners. We, therefore, have to ensure that we maintain maximum leverage in these negotiations until we achieve significant concessions from our trading partners in the area of agriculture.

"As Chairman of the Senate Committee on Finance, I have worked very hard to ensure that the upcoming WTO negotiations are as successful as possible. Indeed, I have had both USTR and USDA testify before my committee on many occasions on this very issue. While I commend the Administration's efforts in preparing for these negotiations, there are aspects of the President's efforts that have, frankly, disappointed me. Most of all, I have been disappointed that the President has not done more in trying to achieve trade negotiating authority from Congress for these negotiations. Without this authority, it is unclear how seriously we will be taken by our negotiating partners. Indeed, there are indications already -- from the European Union, in particular -- that agricultural concessions are not going to be forthcoming until the President obtains trade negotiating authority. While I would tell all our trading partners that they should not underestimate the importance of negotiating at the WTO in good faith, the fact remains that the President should be working harder to get this authority from Congress.

"With that said, I still want to commend both USTR and USDA for reaching out to the Delaware agricultural community through this listening session. The stakes in the upcoming WTO negotiations are very high, for our farmers and for the American people. If these negotiations result in the opening of foreign markets to our agricultural products, then they will have been a success. I look forward to working with USTR, USDA and the President to make these negotiations meet that objective."