Hearing of the House Agriculture Committee - Review of Agricultural Trade Negotiations

Federal News Service

April 28, 2004 Wednesday

HEADLINE: HEARING OF THE HOUSE AGRICULTURE COMMITTEE

SUBJECT: REVIEW OF AGRICULTURAL TRADE NEGOTIATIONS

CHAIRED BY: REPRESENTATIVE BOB GOODLATTE (R-VA)

WITNESSES: ANN M. VENEMAN, SECRETARY OF AGRICULTURE;

ROBERT B. ZOELLICK, UNITED STATES TRADE REPRESENTATIVE LOCATION: 1300 LONGWORTH HOUSE OFFICE BUILDING, WASHINGTON, D.C.

REP. BOB ETHERIDGE (D-NC): Thank you. Thank you, Mr. Chairman.

And let me wake you up, both of you, as others have. Secretary Veneman and Ambassador Zoellick, we appreciate having you here. This has been covered to some extent, but I want to touch it again, Mr. Ambassador and Madam Secretary. If the WTO dispute panel ultimately should rule against us-we hope it won't, and I know you're working hard to make sure that does not happen-but I sense that there'd be a lot of erosion among farmers and producers very quickly on the trade agreement. It is already, as you already heard and know, is declining to some extent, but I think it would decline very quickly overnight.

And I think if that should happen, it would be unfortunate, because then I think it would be-all the work's gone and I think it would be ultimately almost a waste of time to bring the FTAA before this body. I think it would be awful hard to be able to get the kind of votes we need for a trade agreement that would reward Brazil, a nation that has attacked one of America's valuable agricultural exports, cotton, and continues to be an obstacle, in my opinion, to the progress in WTO agriculture at home, I think it would be hard to get something done.

I know your team is working hard to ensure the ruling does not go that way, and I applaud you and thank you for your efforts, because you've got some tough decisions ahead. Decisions about whether to ask Congress to vote on the trade agreements that you've already worked on, decisions on where to focus your resources regarding negotiations of future FTAs. The consequences of a bad WTO decision this summer, even if not a final decision, I think, would impact the administration's trade agenda for the rest of the year. And I know you don't want to have to get prepared for that today.

So my first question to you, Mr. Ambassador-and it deals with the criteria for deciding with whom we negotiate free trade agreements. Australia and Chile are understandably given, because of their-are given the kind of looks they are because of their outlook on trade in general, which is similar to ours in this country. But I wonder about some of the administration's other choices, Bahrain, Panama, Morocco, Colombia, Peru, Ecuador, Thailand, Southern African Customs Union. Of these nations I believe only Thailand is among the top 25 trading partners. You alluded to this earlier.

And I want to support trade agreements that not only make economic sense but also are with nations that truly believe in fair trade with us and others as well. No one wants to reward a nation with access to the best market in the world if they've stopped the progress of WTO. What can you tell us about the behavior in the WTO and the trade principles of the nations with whom we are currently negotiating FTAs, and are they members of the coalition working for freer, fair trade in that body, or are they obstructionists like some other nations?

MR. ZOELLICK: Well, thank you, Mr. Etheridge, and let me thank you for your support. And I know we've worked on a lot of these poultry issues together and I'm very pleased with the success with the secretary and others we've made on that. We know particularly with the avian influenza it's an ongoing issue, but we'll keep at it with you.

First, let me address the size issue. You know, because of our NAFTA agreement, we already have free trade with about a third of our trading partners. Because I get asked this question a lot and I'm glad you gave me the opportunity to come back to it. We would be pleased to try to have free trade with Europe, Japan and Korea, but they're not willing to put agriculture on the table. And just so this committee knows-many other groups say to me, why don't you do free trade and leave agriculture out? Well I'm not going to leave agriculture out.

So when you take those countries, and China early stayed out, and look at the rest of the world, our free trade agreements amount to about a third of that market, not even including the free trade area of the Americas. So, you know, as we've seen in a lot of things, particularly in votes, small numbers add up. So some of these do create opportunities for us.

Second, in terms of the criteria we used, Mr. Etheridge, we looked first to congressional guidance. Some of the laws that were passed like on the Caribbean Basin Initiative urged us to move forward with a free trade agreement with Central America. The AGOA bill urges to move forward with Southern African countries. Then we look at business and agricultural interests, and this is where particularly working with this committee, that Colombia and Thailand, we see as important big markets. Special product sensitivities, and some of you have touched on them, we have to be able to bring something home that we can get past, so that's an issue.

The seriousness of a partner to engage in a free trade agreement, and this goes to part of your points, Mr. Etheridge, we often work with them in advance, we try to work with them on an earlier process, I mentioned trade and investment framework agreements, see where they clean up some problems with intellectual property and customs issue. Their record on reforms and then their cooperation with this in the FTA, in the WTO and larger negotiations.

And here I would say, you know, all countries are going to have their differences, but by and large the countries we have as free trade agreement partners are committed to that process, and in some ways as we really liberalize with our free trade agreements which are much deeper openness than you get in the WTO, they become good partners on a number of issues.

But then other issues we have to look at is whether, you know, we can try to support economic reform and development, we have environment labor provisions, will they go along with those items. And there is an element obviously, you mentioned the Middle East, where we do have some other larger goals here, this country has a lot at stake in the Middle East, we can try to help Morocco and Jordan and some of the countries in the Gulf region move towards more openness and parliamentary systems and rule of law, that also has a long range benefit for us.

So it's a combination, but this type of a dialog we have with this committee is a critical element, we listen very closely, where you see the priorities are, but one point we often can't address, Mr. Etheridge, is sometimes so many of you have said, why don't you negotiate a free trade agreement with Japan or Korea? I can't, because they're not willing to open up their ag market.

Thank you, Mr. Chairman.