HEADLINE: HEARING OF THE HOUSE WAYS AND MEANS COMMITTEE
SUBJECT: IMPLEMENTATION OF U.S.-AUSTRALIA FREE TRADE AGREEMENT
CHAIRED BY: REPRESENTATIVE WILLIAM M. THOMAS (R-CA)
WITNESSES PANEL I: JOSETTE SHEERAN SHINER, DEPUTY UNITED STATES TRADE REPRESENTATIVE; ALLEN JOHNSON, CHIEF AGRICULTURAL NEGOTIATOR, OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE;
PANEL II: DAVID SUNDIN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, DSI FLUIDS, ON BEHALF OF THE U.S. CHAMBER OF COMMERCE; RUSSELL SHADE, CHIEF EXECUTIVE OFFICER, HIGH VOLTAGE ENGINEERING, ON BEHALF OF THE NATIONAL ASSOCIATION OF MANUFACTURERS; HUGH STEPHENS, SENIOR VICE PRESIDENT FOR PUBLIC POLICY, ASIA, TIME WARNER, ON BEHALF OF THE AMERICAN-AUSTRALIAN FREE TRADE AGREEMENT COALITION;
DAVID WAGNER, VICE PRESIDENT, EXTERNAL AFFAIRS, JIM BEAM BRANDS COMPANY, ON BEHALF OF THE DISTILLED SPIRITS COUNCIL OF THE UNITED STATES; GEORGE FRANKLIN, VICE PRESIDENT FOR WORLDWIDE GOVERNMENT RELATIONS, KELLOGG COMPANY, ON BEHALF OF THE GROCERY MANUFACTURERS OF AMERICA LOCATION: 1100 LONGWORTH HOUSE OFFICE BUILDING, WASHINGTON, D.C.
REP. WILLIAM M. THOMAS (R-CA): The guests will find seats, please. First of all, welcome. The purpose of this hearing is to focus on the recently completed U.S.-Australia Free Trade Agreement and the benefits this agreement will bring to American businesses, farmers, workers, consumers and in fact the entire U.S. economy.
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REP. PAUL RYAN (R-WI): Phil.
REP. CRANE: Wait, excuse me. I'm sorry. Mr. Ryan. Hold on.
REP. RYAN: Just for one minute. Mr. Chairman, sorry. Real quickly.
Like Pennsylvania and Illinois, I come from Wisconsin, which is a very, very large manufacturing state. We have the second most manufacturing jobs per capita in the country, so this is a perfect agreement for manufacturing. This is a wonderful agreement for our manufacturers. We too, however, though, are the dairy state, and we call ourselves America's dairy land.
And so, Mr. Johnson, I wanted to just go over quickly with you-it's my opinion, from looking at this agreement, that the concerns of the dairy industry were very much taken care of and accounted for in this. But that story has not been told well enough to many in the dairy industry, especially the producers. Now, what I would like to ask you is if you could just quickly and briefly go through how the dairy industry was accommodated in this agreement, and why those in the dairy industry who had concerns prior to the finalizing of this agreement, those concerns had been allayed. That's the story that we need to tell. Other legislators are going to be voting on this in the dairy parts of our country.
MR. JOHNSON: Well, first of all, let me just say that we have a-I personally feel a very strong working relationship with our dairy industry, and not just in this agreement but all the other agreements that we've been working together on. So right before the negotiations started, Ambassador Zoellick and I had a meeting with the leaders of the dairy industry, and they identified to us their important issues and priorities. The first one to us was maintaining the out-of-quota tariff. They didn't want to see that reduced. We were able to achieve that. It was a difficult negotiation, frankly, but we were able to achieve their top priority.
The second concern was that the amount of product being let in that would be quotas under that tariff would be manageable and not disruptive. So, again, as I pointed out earlier, the amount of product being let in on the first year is equal to 0.2 percent of the value of U.S. agricultural-U.S. dairy production. And then we looked at the growth rates on these numbers to make sure that the more sensitive items grew at a slower rate. So I think, again, that addresses it.
And as we look to the program itself, we wanted to make sure that it was still-that we've maintained its operational effectiveness, which we were able to do that as well.
REP. RYAN: Is it true that MPCs are not subsidized in Australia?
MR. JOHNSON: No. I don't believe they are, sir. But at any rate, the gist of it is that even on a tonnage basis, when you look at the milk equivalent, the amount of tonnage being let in is equal to about 0.03 percent of the U.S. production of milk. So we think we're very sensitive to it. That's not to say that our dairy friends don't have some concerns about it, but we addressed as best we could those, and we continue to work with them hard in other agreements, including the global negotiations.
REP. RYAN: All right. Thank you very much.