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Hearing of the House Ways and Means Committee on President Bush's Trade Agenda

Location: Washington, DC





REP. WILLIAM M. THOMAS (R-CA): Good morning. Today's hearing is about the United States trade agenda for 2004. Ambassador Zoellick, it's a pleasure to have you here with us again to discuss your efforts, especially some very positive recent efforts to expand international trade, create job opportunities for American workers, farmers and businesses.


REP. KENNY C. HULSHOF (R-MO): Thank you, Mr. Chairman. May I have permission to revise and extend my remarks?

REP. THOMAS: Certainly. Without objection.

REP. HULSHOF: Thank you.

Mr. Ambassador, welcome. Last week a former colleague, former member of this committee, Mr. Watkins of Oklahoma came back and so we had a chance to talk, and it was great to see Wes. He and I introduced a measure a couple of years back to actually create the position of a permanent ag ambassador within your office. And I want to commend-I know Mr. Johnson was here earlier-how impressed that I am with the job that Ambassador Johnson has done on a myriad number of issues, really tough issues affecting agriculture, and I wanted to put that in the record.

What I'd like to do in the short time that I have is to raise an issue regarding, as I term it, soybean piracy in South America. As you know, both Argentina and Brazil are expanding their acreage that they're putting in to production agriculture, specifically soybeans. And what's compounding a problem is that they are not abiding by provisions that they've agreed on on protecting our American intellectual property as it relates to genetically enhanced varieties of soybeans, specifically, as we've come to know it, Monsanto's Roundup Ready Soybeans.

The USDA's Foreign Agriculture Service says that it's probably going to be about five years or less and Brazil is going to exceed American agriculture. And what's more, FAS says-estimates that genetically enhanced soybean varieties constitutes between 10 and 20 percent of Brazil's 2003 crop even though these varieties are not available for sale. In fact, at Cancun when members of this committee met with the trade representative Mr. Amorim from Brazil, the fact is that their government didn't even acknowledge that Brazilian farmers were using Roundup Ready technology.

So my question is actually twofold on this specific issue. How can American farmers and U.S. farms, just like the one our family operates back in Missouri, how can we remain competitive with this other production in other countries when our chief advantage, access to improved technology, is constantly being eroded by countries that ignore American intellectual property rights, and I would say even commitments under existing trade agreements. That's question number one. And question number two is, what action is your office or you or Ambassador Johnson taking to combat patent infringements of agricultural products in South America and across the globe?

MR. ZOELLICK: Well, first let me thank you, Mr. Hulshof, for your compliments for Al Johnson and his team. They do excellent work and they're a small group but they spend a lot of time talking to the community to make sure we know their priorities and we try to deliver for them. But I'll relay that, thank you.

I think the two questions in my mind are integrated, in that there's a lot we can do on soybeans separately. As I mentioned before, we've now boosted our soybean sales to China, for example, to $2.9 billion and, as you and I know, that's one of the reasons soybean prices have been relatively healthy. But in the case of the intellectual property, we have a high priority in terms of all American intellectually property rights.

Now, it turns out that the global international property agreement, the TRIPS Accord, the trade in intellectual property, has some limits and one of the things is it doesn't require countries to have patents available for plants. So that's one of the reasons it's a good example of how our free trade agreements kind of complement what we try to do in the WTO by setting higher models. We push for this and so, for example, we have that in our Chile agreement, we have it in CAFTA and we will seek it with the Andean countries in Latin America.

Now, as you point out, Brazil is a particularly difficult case because, as you know, on the one hand they haven't officially approved biotech soybeans even though everyone knows they're growing them. Now, that's been working its way through the Brazilian court process. But we've been working with Monsanto and others. As you know, as an interim measure there's a technical fee that I think is about two- thirds of the fee that our farmers pay, and that fee-in reality what I learned is that Monsanto actually doesn't have a patent on the plant, they have it on the genes. So there's another slight complication in this issue.

But what we try to do through the individual agreements and working with companies is to make sure that their intellectual property is protected as best we can, and they get paid for it and it obviously creates a level playing field for your soybean farmers.

REP. HULSHOF: I appreciate that. And I know my time has expired and so may I submit another question to you in writing --

MR. ZOELLICK: Certainly.

REP. HULSHOF: -- as far as sanitary and phytosanitary concerns?

MR. ZOELLICK: I'd be pleased.

REP. HULSHOF: Thank you, Chairman.


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