[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]





                  EXPANDING U.S. AGRICULTURE TRADE AND
                  ELIMINATING BARRIERS TO U.S. EXPORTS

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON TRADE

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             June 14, 2016

                               __________

                          Serial No. 114-TR02

                               __________

         Printed for the use of the Committee on Ways and Means






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                      COMMITTEE ON WAYS AND MEANS

                      KEVIN BRADY, Texas, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan,
DEVIN NUNES, California              CHARLES B. RANGEL, New York
PATRICK J. TIBERI, Ohio              JIM MCDERMOTT, Washington
DAVID G. REICHERT, Washington        JOHN LEWIS, Georgia
CHARLES W. BOUSTANY, JR., Louisiana  RICHARD E. NEAL, Massachusetts
PETER J. ROSKAM, Illinois            XAVIER BECERRA, California
TOM PRICE, Georgia                   LLOYD DOGGETT, Texas
VERN BUCHANAN, Florida               MIKE THOMPSON, California
ADRIAN SMITH, Nebraska               JOHN B. LARSON, Connecticut
LYNN JENKINS, Kansas                 EARL BLUMENAUER, Oregon
ERIK PAULSEN, Minnesota              RON KIND, Wisconsin
KENNY MARCHANT, Texas                BILL PASCRELL, JR., New Jersey
DIANE BLACK, Tennessee               JOSEPH CROWLEY, New York
TOM REED, New York                   DANNY DAVIS, Illinois
TODD YOUNG, Indiana                  LINDA SANCHEZ, California
MIKE KELLY, Pennsylvania
JIM RENACCI, Ohio
PAT MEEHAN, Pennsylvania
KRISTI NOEM, South Dakota
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri
ROBERT J. DOLD, Illinois
TOM RICE, South Carolina

                     DAVID STEWART, Staff Director

                   NICK GWYN, Minority Chief of Staff

                                 ______

                         SUBCOMMITTEE ON TRADE

                DAVID G. REICHERT, Washington, Chairman

DEVIN NUNES, California              CHARLES B. RANGEL, New York
ADRIAN SMITH, Nebraska               RICHARD E. NEAL, Massachusetts
LYNN JENKINS, Kansas                 EARL BLUMENAUER, Oregon
CHARLES W. BOUSTANY, JR., Louisiana  RON KIND, Wisconsin
ERIK PAULSEN, Minnesota              BILL PASCRELL, JR., New Jersey
KENNY MARCHANT, Texas                LLOYD DOGGETT, Texas
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
PAT MEEHAN, Pennsylvania























                            C O N T E N T S

                               __________
                                                                   Page

    Advisory of June 14, 2016 announcing the hearing.............     2

                               WITNESSES

Dale Foreman, Chairman, Foreman Fruit Company; Past Chairman, 
  USApple; Past Chairman, Washington Apple Commission............    47
Heather McClung, Co-Owner, Schooner EXACT Brewing Company; 
  President, Washington Brewers Guild............................    53
Randy Mooney, Chairman, National Milk Producers Federation.......    22
Kevin Paap, President, Minnesota Farm Bureau; Chair, American 
  Farm Bureau Federation Trade Advisory Committee................    13
John Weber, President, National Pork Producers Council...........    34

                              SUBMISSIONS

Brandon Baum, letter.............................................    32
Brazil-Texas Chamber of Commerce, letter.........................    83
National Cattlemen's Beef Association, statement.................    84
Center for Fiscal Equity, statement..............................    93
Corn Refiners Association, statement.............................    96
David Ickert, letter.............................................    98
Distilled Spirits Council, statement.............................    99
Kearyn Rubio, letter.............................................   108
Heart of Nature LLC, letter......................................   109
Macondo Leasing Company, LLC, letter.............................   110
Gonzalez & Associates Consulting, letter.........................   111
Kevin Berken, letter.............................................   112
Napa Valley Vintners, statement..................................   113
National Farmers Union, statement................................   119
Hemp Biz Journal, letter.........................................   129
Stash Tea Company, letter........................................   130

 
                  EXPANDING U.S. AGRICULTURE TRADE AND
                  ELIMINATING BARRIERS TO U.S. EXPORTS

                              ----------                              


                         TUESDAY, JUNE 14, 2016

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                     Subcommittee on Trade,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 1100, Longworth House Office Building, the Honorable Dave 
Reichert [chairman of the subcommittee] presiding.
    [The advisory announcing the hearing follows:]
    
    
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    Chairman REICHERT. This hearing will come to order. Thank 
you all for being here, and good morning. This subcommittee 
will come to order, and welcome to the Ways and Means Trade 
Subcommittee hearing on Expanding U.S. Agriculture Trade and 
Eliminating Barriers to U.S. Exports. Before hearing from our 
witnesses, I would like to make a few points myself, and will 
turn to Ranking Member Rangel also for some opening statements.
    The United States is and must remain the world's leading 
agricultural exporter. We excel at producing and exporting a 
wide variety of agriculture products. For example, my home 
State of Washington is a leading exporter in fruit, vegetables, 
and wheat. If our agriculture sector is to continue to grow and 
to be a source of prosperity and jobs, we must be able to sell 
to the world's expanding markets. In addition, agricultural 
exports benefit both rural and urban America.
    It is well known that America's farmers and ranchers 
increasingly depend on expanding exports. However, less well 
known is the fact that two-thirds of the jobs supported by 
agriculture exports are outside of farming. These jobs are in 
areas as diverse as transportation, financial services, and 
biotechnology research. Moreover, producers of further 
processed agricultural products, such as Washington State's 
world famous breweries and wineries, are important job 
creators.
    This is why more needs to be done to tear down tariff and 
nontariff barriers to U.S. agriculture. Washington State fruit 
and vegetable exporters, on average, face tariffs of over 50 
percent when they try to sell abroad. And nontariff barriers 
are becoming even a greater problem for our farmers and 
ranchers. USTR and USDA have been successful in fighting 
against many of these barriers, such as Indonesia's nontariff 
barriers on horticulture imports, but many still remain today.
    For example, I am particularly concerned about the World 
Health Organization's attempt to impose restrictions on dairy 
products for young children that have no basis in science. In 
addition, the EU's restrictions on the use of generic food 
names by improperly designating them as geographical 
indications remains a significant problem.
    Trade agreements are an effective tool to lower these 
barriers and open markets for America's agricultural exports. 
Even though we just implemented the Colombia and Korea free 
trade agreements a few years ago, U.S. agricultural exports to 
those countries are already setting triple-digit percentage 
growth for some products.
    The TPP agreement also holds great promise. It would 
eliminate or significantly reduce tariffs and quotas for 
agricultural exports to the fastest growing region in the 
world. I am particularly pleased that TPP would establish 
enforceable WTO-plus obligations to ensure that SPS measures 
are not used as hidden protectionism, while not diminishing in 
any way the ability of the United States to guarantee the 
safety of imported food.
    TPP's provisions on biotechnology and preventing the abuse 
of geographical indications are also important. However, trade 
agreements must be done right, must be fully implemented and 
enforced to benefit America's agricultural producers. For 
example, this means that Canada simply cannot go back on its 
commitments in TPP and NAFTA and limit imports of U.S. dairy 
products through protectionist regulatory changes, as it is 
proposing.
    Likewise, the administration must also work with other TPP 
countries, as well as Congress and stakeholders, to develop 
plans as to how these countries will comply with TPP's 
obligations on SPS measures and other agriculture-related 
areas. This will be essential to getting congressional support 
for the agreement, in addition to resolving other outstanding 
issues.
    The negotiation of the trade agreement with the EU holds a 
lot of promise for agriculture products and exports, but it 
must be a comprehensive, high-standard agreement. That means 
knocking down the EU's 30 percent average agricultural tariff 
and forcing the EU to remove its countless nontariff barriers 
on the United States' products. The fact that the U.S. has a 
significant agricultural trade deficit with the EU but a large 
agricultural trade surplus with the rest of the world shows 
that that burden lies with the EU to open up its market.
    Chairman REICHERT. So I will now yield to the ranking 
member, Ranking Member Rangel, for his opening statement.
    Mr. RANGEL. Thank you, Mr. Chairman. I ask unanimous 
consent that my opening statement be placed into the record.
    Chairman REICHERT. Without objection.
    [The opening statement of Mr. Rangel follows:]
    
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    Mr. RANGEL. The reason I do that is because you mentioned 
what is necessary for us to have congressional support for TPP. 
And to my political knowledge, there is no calendar for this to 
come before the Congress. So I hope our witnesses could express 
themselves, because there are many of us who believe that there 
is an opportunity here, if we take advantage of the fact, that 
infrastructure and the education and technology has to be a 
part of this package. The votes are not there. But I assure you 
that there are communities, if they can see a future for their 
young people in terms of education and technology, if they can 
see that infrastructure is a necessary part of a successful 
trade agreement, but just standing alone out there just seems 
to me that it is not on our legislative calendar. But we can do 
something about it.
    Another point that is not mentioned at all is I cannot see 
how the agricultural sector of our great Nation can overlook 
the opportunities we have in Cuba. I just want any witness to 
tell us why we should not open wider the opportunities we have 
in Cuba in view of the close proximity and the ability of our 
farmers and dairy people and ranchers to meet the needs of 
these people. And lastly, I do hope, Mr. Chairman, that maybe 
the committee can get together and see whether we have some 
strategy, before or after the election, to see what good are 
these meetings unless we are going to ultimately have some type 
of a timetable to vote on this issue. Because my days in 
Congress are very, very limited because of my intention to 
retire, but it certainly would be exciting for the President 
and for the Congress, both the House and the Senate, to be able 
to say that we think this legislation is so important, as do 
the witnesses, that it receives some type of priority, 
notwithstanding the logjam that we appear to have on other 
pieces of legislation.
    So I welcome the witnesses. I hope you talk in terms of 
infrastructure and technology. I hope you don't forget that 
even though Cuba is not a part of TPP, it certainly is a part 
of the industry. And I compliment and praise you, Mr. Chairman, 
for keeping hope alive.
    Chairman REICHERT. Well, together we can do that. And 
today's hearing is just a part of the process in trying to 
educate members on the benefits of trade, and especially today 
focused on TPP and TTIP. And I think the conversation today 
will generally lead to a conclusion that selling of American 
products, whether manufactured or grown, is a huge benefit to 
our economy and a job creator.
    So our hope is the same as yours, that this becomes a trade 
agreement that we can all finally come to agreement on 
ourselves somewhere in the near future, but there are 
outstanding issues that need to be resolved. And we are going 
to work hard to accomplish resolution of those issues with the 
ambassador of USTR, Ambassador Froman.
    So thank you for your kind comments, Mr. Rangel. And, 
again, thank you all for being here.
    We are joined by five witnesses today. The first witness is 
Mr. Kevin Paap, president of the Minnesota Farm Bureau and 
chair of the American Farm Bureau Federation Trade Advisory 
Committee. Our second witness is Mr. Randy Mooney, chairman of 
the National Milk Producers Federation. Our third witness is 
Mr. John Weber, president of the National Pork Producers 
Council. I am proud to say our last two witnesses are from my 
home State of Washington. The first is Mr. Dale Foreman of 
Wenatchee, Washington, who is the chairman of the Foreman Fruit 
Company and the past chairman of the USApple and Washington 
Apple Commission. Dale has also served as majority leader of 
the Washington State House of Representatives. And finally, 
last but not least, is Ms. Heather McClung, of Seattle, 
Washington, who is the co-owner of Schooner EXACT Brewing 
Company and president of Washington Brewers Guild.
    And before recognizing our first witness, let me note that 
our time is limited so you should limit your testimony to 5 
minutes, please. And members should keep their questions to 5 
minutes.
    Mr. Paap, before you begin, I know that Mr. Paulsen would 
like to take this opportunity to personally introduce you since 
you are both from Minnesota.
    Mr. Paulsen.
    Mr. PAULSEN. Thank you, Mr. Chairman. It is my honor and 
privilege to have a fellow Minnesotan join us today. Kevin Paap 
is president, as you mentioned, of the Minnesota Farm Bureau 
and a fourth generation farmer in Minnesota, growing both corn 
and soybeans.
    And I think every one of us understands the important role 
that agriculture plays in our economy, but I am proud to say 
that Mr. Paap has been a champion for farmers across my home 
State of Minnesota and the country. He has worked tirelessly to 
advance policies that will benefit America's farmers, both 
domestically and internationally. Mr. Paap is currently serving 
his sixth term as the president of the Minnesota Farm Bureau, 
and he has the distinction of also being the chairman of the 
American Farm Bureau's Trade Advisory Committee.
    He has been a tremendous partner in educating farmers 
throughout my State to understand how important trade is for 
their business. And I want to thank Mr. Paap for making the 
trip to Washington today. And I look forward to hearing his 
thoughts on how we can increase trade opportunities for 
America's farmers.
    Thank you, Mr. Chairman.
    Chairman REICHERT. Thank you, Mr. Paulsen.
    Mr. Paap, you are recognized for 5 minutes. And your 
written statement will be made a part of the record. So please 
continue with your statement.

  STATEMENT OF KEVIN PAAP, PRESIDENT, MINNESOTA FARM BUREAU; 
CHAIR, AMERICAN FARM BUREAU FEDERATION TRADE ADVISORY COMMITTEE

    Mr. PAAP. Thank you, Mr. Chairman. And good morning. My 
name is Kevin Paap, fourth generation farmer from Blue Earth 
County, Minnesota, where my wife and I, who is with me today, 
raise corn, soybeans, and boys. I am president of the Minnesota 
Farm Bureau Federation, chair of the Trade Advisory Committee 
on the American Farm Bureau Board, as mentioned.
    A little over 5 weeks ago we finished planting our corn and 
soybean crops. And whether it was sitting in the tractor cab 
watching the 12 rows on the computer monitor while I am 
planting or while we physically were placing seed in the 12 
seed boxes on the planter, I am thinking about the fact that 4 
or 5 of those 12 rows on that planter, every time we go across 
the field, 40 percent of what I have just planted will be grown 
for international markets.
    You know, America's farmers and ranchers are truly blessed. 
We can grow more than we can use. Last year, our agriculture 
exports of $133 billion demonstrate the strength of our 
agriculture productivity, the important contribution of trade 
to our economic well-being, and the ability of the United 
States to provide competitive food and farm products to markets 
worldwide. Farm Bureau strongly supports efforts to increase 
agriculture trade through comprehensive trade agreements.
    I would like to briefly highlight our written testimony. 
Expanding our trade opportunities happens through tariff 
reduction and removal and by the adoption of science-based 
standards for international agriculture and food trade. Both of 
these are critical to successful trade outcomes for 
agriculture. Our analysis of the Trans-Pacific Partnership 
Agreement shows a significant positive impact on agriculture, 
with an increase of net exports to the TPP countries of $5.3 
billion annually and a boost to net farm income of $4.4 billion 
annually. American Farm Bureau strongly supports passage of 
TPP.
    Along with tariff reductions and market access gains, the 
TPP makes important changes to trade rules for agriculture, 
addressing the nontariff barriers that reduce trade. The most 
important of these changes are the commitment to have science-
based food safety standards. Also, crucial to exporters and 
importers is a rapid response mechanism that will notify them 
when an inbound shipment is being restricted. This will help 
speed trade, reduce losses to perishable products, and lower 
costs.
    For biotechnology products, now so important to the U.S. 
agriculture trade, the agreement commits the participating 
countries to increase the transparency of national laws and 
regulations. The TPP agreement provides an opportunity to 
increase markets for U.S. agriculture by removing barriers to 
trade within a dynamic region.
    Another important area of the elimination of the tariff and 
nontariff barriers will open new markets for U.S. agriculture's 
European Union. Transatlantic Trade and Investment Partnership 
negotiations between the U.S. and the EU must deal with the 
many issues that impede U.S.-EU ag trade, such as tariffs and 
the longstanding barriers against U.S. meat exports. The U.S. 
and the EU are major international trading partners in 
agriculture. U.S. farmers and ranchers exported more than $12.1 
billion of ag and food products to the EU in 2015, while the 
European Union exported $20.1 billion worth of agriculture 
products to us last year.
    You know, the EU was once the largest destination for U.S. 
agriculture exports. Today, it has fallen to our fifth largest 
market. Number five. Tariff and regulatory barriers have become 
significant impediment to increased exports. These negotiations 
must result in a modern, science-based and risk-based approach 
to food safety based on international standards which can truly 
settle disputes.
    We must also resolve issues related to the approval of 
biotechnology products. In the European Union, implementation 
of a regulatory procedure approving the import of new 
biotechnology products has been slow and has suffered from 
political interference. In China, the timeline for biotech 
product approval for food, feed, or processing has grown less 
certain and extended in duration since 2012. The divergence in 
U.S. and Chinese approvals have and will continue to put 
billions of dollars of U.S. exports at risk.
    America's farmers and ranchers are blessed. We can grow 
more than we can use. We know that increasing demand by 
expanding trade is necessary for our continued success. 
Expanding trade opportunities is an action that Congress needs 
to support.
    We appreciate your leadership in holding this hearing and 
look forward to working with the committee on advancing the 
progress of international agriculture trade.
    Chairman REICHERT. Thank you, Mr. Paap.
    [The prepared statement of Mr. Paap follows:]
     
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    Mr. Mooney, you are recognized for 5 minutes.

 STATEMENT OF RANDY MOONEY, CHAIRMAN, NATIONAL MILK PRODUCERS 
                           FEDERATION

    Mr. MOONEY. Well, Chairman Reichert, Ranking Member Rangel, 
and Members of the Committee, thank you for inviting me here to 
testify on the topics of expanding U.S. agricultural trade and 
eliminating barriers to U.S. exports.
    My name is Randy Mooney. My wife Jan and I operate Mooney 
Dairy in Rogersville, Missouri. I serve as chairman of the 
National Milk Producers Federation, which is celebrating its 
100th anniversary this year.
    Trade has become such a big driver in the economics of 
America's dairy industry. Last year, we exported over $5 
billion worth of dairy products, up 435 percent since the year 
2000. Clearly, this is not my grandfather's dairy industry.
    Over the last 15 years, foreign sales have helped us tap 
into millions more customers throughout the world, a 
development that has helped boost milk prices on average over 
that period. Those benefits go far beyond the farm, though.
    Last year's dairy exports supported more than 120,000 
American jobs solely at the dairy production and manufacturing 
level. The dramatic export growth we have experienced over the 
past two decades have made possible and key by the numerous 
well-negotiated FTAs put in place over that period, combined 
with the impacts of the WTO Uruguay agreement.
    Looking ahead, we need strong market opening trade 
agreements as well as diligent implementation and enforcement 
of the terms of those deals. Toward that end, I would like to 
focus my remaining comments here today on a few main areas: 
TPP, Canada's persistent flouting of the trade commitments, 
TTIP negotiations, and protecting common food names.
    NMPF supports TPP. We believe that this agreement could 
deliver important benefits to U.S. dairy farmers, provided that 
it is properly implemented and enforced. Particularly important 
are its groundbreaking SPS and GI provisions. But trade 
compliance is critical. If TPP partners are allowed to erode 
existing access in order to undermine future U.S. TPP gains, it 
is hard to see how it will live up to its potential to move us 
forward compared to the status quo as of TPP's close last fall. 
This is particularly a concern when you talk about Canada.
    Our neighbors to the north, Canada, has repeatedly 
disregarded its trade commitments to us. The most recent 
Canadian policy shift, which has already led to export losses, 
is an Ontario milk pricing policy that may soon also be 
implemented nationally. Mr. Chairman and Members of the 
Committee, we are drawing the line here. This recent action by 
Canada is a clear violation of their prior trade commitments, 
as well as the spirit of the TPP, and it cannot be permitted.
    Finally, I want to stress that where we are on TTIP right 
now is extremely alarming because the EU has such a well-known 
reputation for blocking U.S. ag exports. That pattern is a part 
of what drives the huge trade deficit we have with the EU. 
Dairy trade is not only about a few specialty cheeses. We are 
the largest exporter in the world of skim powder, skim milk 
powder, whey ingredients, and cheese. So given a level playing 
field, we expect to see a more even level of Transatlantic 
dairy trade.
    Let me be clear. TTIP cannot be an agreement that expands 
EU dairy exports while failing to resolve barriers to U.S. 
dairy exports. That is why negotiators need to focus on the 
underlying problems we face in accessing the EU market, not the 
isolated symptoms of it. We are deeply concerned by the focus 
on concluding TTIP negotiations this year, despite a lack of 
progress to date in tackling the EU's nontariff barriers to 
U.S. dairy exports. Meanwhile, the EU is not only maintaining 
their existing barriers, but it is actively pushing in TTIP to 
impose new barriers through special geographic indicator 
provisions.
    Mr. Chairman, this basket that is sitting here in front of 
me is American agricultural products from Valencia oranges to 
Asiago and Parmesan cheese to Black Forest ham and to wines 
with the label Chateau. It includes several of the common name 
products that the United States cannot currently export to 
Europe or other foreign markets. Compounding those serious 
export challenges, the EU is now working to prevent us from 
selling products with these common food names, even in the 
United States.
    America's dairy farmers will not support a TTIP agreement 
that incorporates policies aimed at artificially increasing the 
$1.5 billion transatlantic dairy trade deficit. A solid deal 
must level the playing field.
    And in closing, I want to mention that as we work to open 
new markets for dairy around the world, we are also taking a 
proactive approach on other important issues. In the purview of 
this committee, we are supporting the introduction of a bill 
this week by members of this committee that would create an 
investment tax credit to help offset the upfront capital cost 
of biogas systems and nutrient recovery technology in order to 
improve environmental outcomes.
    So, Mr. Chairman, I appreciate the opportunity to provide 
the comments on these important issues. Thank you very much.
    [The prepared statement of Mr. Mooney follows:]
    
    
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    Chairman REICHERT. Thank you, Mr. Mooney.
    Mr. Weber, you are recognized.

  STATEMENT OF JOHN WEBER, PRESIDENT, NATIONAL PORK PRODUCERS 
                            COUNCIL

    Mr. WEBER. Good morning, Chairman Reichert, Ranking Member 
Rangel, and Members of the Subcommittee. My name is John Weber. 
I am a pork producer from Dysart, Iowa, and president of the 
National Pork Producers Council.
    The economic well-being of American agriculture and the 
U.S. pork industry depends on maintaining strong export markets 
and creating new market access opportunities. With 95 percent 
of the world's population living outside of the United States, 
access to export markets is critical. Since 1989, when the 
United States began using bilateral and regional trade 
agreements to open foreign markets, U.S. agricultural exports 
have quadrupled in value and are now at $133 billion.
    In our industry, we went from exporting just under $400,000 
in the year the U.S.-Canada free trade agreement took effect to 
nearly $5.6 billion last year. The U.S. pork industry now is 
the number one exporter of pork in the world.
    The benefits of free trade agreements to pork producers 
like myself is underscored by one fact. The U.S. pork industry 
now exports more pork to the 20 countries with which the United 
States has free trade agreements than to the rest of the world 
combined. And those exports, which last year added $48 to the 
price of each hog sold, don't just benefit all U.S. pork 
producers. They are a boon to the entire U.S. economy.
    Pork exports support 110,000 U.S. jobs. We must continue to 
grow our exports and we must do so through free trade 
agreements which eliminate tariff and nontariff barriers to our 
products. The pending 12-nation TPP would do just that, opening 
or expanding markets that include nearly a half billion 
consumers and 40 percent of the world's gross domestic product. 
TPP is the biggest commercial opportunity ever for the U.S. 
pork industry, and NPPC strongly supports its passage and 
implementation.
    Iowa State University economist Dermot Hayes estimates that 
U.S. pork exports to our 11 TPP partners would increase 
exponentially and help create more than 10,000 U.S. jobs. A 
couple of other points on TPP. First, the agreement has become 
the de facto global trade vehicle and other countries in the 
region are already lining up to get into it. Secondly, and more 
importantly, because other Asia-Pacific trade agreements are 
being negotiated without the United States, we cannot afford, 
either economically or geopolitically, to walk away from the 
fastest growing region in the world.
    If we do turn our backs on that region, two things will 
happen. Some other country, such as China, which is now leading 
the talks for the 16-nation regional comprehensive economic 
partnership, they will write the rules for global trade. And 
the United States not only won't realize the benefits of TPP, 
it will lose market share in those 11 countries as other 
nations negotiate free trade agreements with them.
    Congress must pass TPP and it must do so soon. Because TPP 
would become the global trade agreement, it would set the new 
rules of trade and the bar for future trade agreements. That is 
important, given that we are now in talks with the European 
Union on free trade agreements.
    TTIP, which would open a market of about 508 million 
consumers to our products. The 28-member EU is the second 
largest pork consuming market in the world. Obviously, China 
number one. But U.S. pork sales to the EU are lower than they 
are to the smallest of countries, such as Honduras. EU tariff 
and nontariff barriers have limited U.S. pork exports to one-
twentieth of 1 percent of the EU pork consumption.
    Assuming the EU barriers to the U.S. pork we want 
eliminated through TTIP negotiations are tariff rate quotas, 
costly and unnecessary trichinea risk mitigation requirements, 
and a ban on pathogen reduction treatments that produce a safer 
product for consumers. Iowa State's Dermot Hayes estimates that 
the increase in U.S. pork exports that would be generated by a 
TTIP agreement that eliminates all tariff and nontariff 
barriers would create nearly 18,000 new jobs in the United 
States.
    U.S. pork producers' support for a final TTIP agreement is 
conditioned on the elimination of all tariff and nontariff 
barriers to U.S. pork exports to the EU, an outcome achieved in 
every other U.S. free trade agreement. TTIP should be no 
different.
    Finally, I would like to thank the members of this 
committee, the entire Congress, and USTR for the recent efforts 
to get U.S. pork into the South African market, which until 
this year had banned our product through nonscience-based 
restrictions.
    Thank you for this opportunity to tell you how free trade 
works for the U.S. pork industry. And I will be happy to answer 
any questions.
    Chairman REICHERT. Thank you, Mr. Weber.
    [The prepared statement of Mr. Weber follows:]
  
  
  
  
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    Mr. Foreman, you are recognized for 5 minutes.

   STATEMENT OF DALE FOREMAN, CHAIRMAN, FOREMAN FRUIT COMPANY

    Mr. FOREMAN. Thank you, Mr. Chairman. We appreciate the 
opportunity to be here. Chairman Reichert and Mr. Ranking 
Member Rangel, thank you very much for your interest in this 
most important topic.
    My wife Gail and I have been fruit farmers in Wenatchee, 
Washington, for over 30 years. Our three children and their 
spouses have now returned home to help us expand the business. 
I am also the past chairman of both the Washington Apple 
Commission and the USApple Association. I have had the 
opportunity to travel to over 25 countries throughout my career 
to promote the sale of American tree fruit, including New York 
apples, Vermont apples, Virginia apples, Minnesota apples, 
Michigan apples, and Washington, Oregon, Idaho, and California 
apples.
    Pacific Northwest is home to family-owned orchards that 
provide approximately 66 percent of apples, 75 percent of the 
pears, and 80 percent of the sweet cherries grown in the United 
States. Export markets are critical to the success of the tree 
fruit industry. Approximately one-third of our crop, that is 
over $1 billion, is sold through export markets every year.
    Korea's 24 percent tariff on sweet cherries was eliminated 
in 2012 through the U.S.-Korea free trade agreement. Cherry 
exports nearly doubled in the next year and have continued to 
grow exponentially, making it the third largest cherry market 
this year.
    Some countries, many with tree fruit industries of their 
own, impose sanitary and phytosanitary policies that they 
purport to address human health or plant pest or disease 
concerns but which we believe are often just not based on 
science. They are not based on an accurate risk assessment, and 
they are actually created to protect their domestic industries 
from American competition.
    While not completely eliminating these type of nontariff 
barriers, the TPP includes a sanitary/phytosanitary chapter 
that encourages participating countries to conduct risk 
assessments and base their policies on the best available 
science. This chapter also requires participating countries to 
make available an appeals process that allows for a timely 
response by the importing country when a shipper disputes the 
rejection of a shipment on arrival. This has happened to me. It 
is expensive, it is painful. We need an appeals process that is 
timely.
    The TPP eliminates the 10 percent tariff on apples, pears, 
and cherries in the growing market of Vietnam. And the Asia-
Pacific region that this agreement covers is one of the most 
commercially important areas in the world for tree fruit. It is 
one of the fastest growing.
    By enhancing our trade relationships with these countries, 
the TPP would improve the platform to address bilateral 
disagreements, including SPS issues, and raise the rule of law 
standards for trade policies in other countries throughout the 
region. For these reasons, the Northwest Horticultural Council 
that represents the Pacific Northwest tree fruit industry on 
international trade issues has adopted a position in support of 
the TPP and encourages Congress to move forward with approving 
this agreement.
    I am also in favor of selling apples and pears and cherries 
to Cuba, Mr. Rangel.
    Many previous trade agreements adopted by the United States 
have benefited tree fruit growers, and I am certainly 
supportive, in general, of our government pursuing new 
agreements that are fair, expanding free trade opportunities. 
However, I would like to highlight a concern about the TTIP 
that is currently being negotiated with the European Union.
    While the EU used to be an important market for U.S. apples 
and pears, a hazard-based principle approach to the regulation 
of crop protection tools and food additive tolerances has 
caused our tree fruit exports to plummet. In spite of the 
significant increase in crop size, our apple exports to the EU 
have gone down from 1.1 million boxes in 2001 to only 151,000 
boxes this year. Pear exports, and I am a large pear grower, 
have reduced from 574,000 boxes to little more than 9,000 boxes 
in the same period. I am skeptical that TTIP will bring about 
the drastic change to the EU's restrictive regulatory framework 
necessary to make Europe a viable export market.
    At the same time, they are considering allowing Poland, 
which is the second largest apple grower in the world, to 
import their apples into the United States without a proper 
pest risk assessment. That is a very bad bargain. And we would 
ask you to concern yourselves with the fairness of the TTIP 
negotiations as they go forward.
    I see my time is up. I want to thank you very much for the 
opportunity to be here today.
    Chairman REICHERT. Thank you, Mr. Foreman.
    [The prepared statement of Mr. Foreman follows:]

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    Ms. McClung, you are recognized for 5 minutes.

STATEMENT OF HEATHER MCCLUNG, CO-OWNER, SCHOONER EXACT BREWING 
          COMPANY; PRESIDENT, WASHINGTON BREWERS GUILD

    Ms. MCCLUNG. Thank you. Chairman Reichert, Ranking Member 
Rangel, and the Members of the Subcommittee, thank you for the 
opportunity to testify.
    My name is Heather McClung, and I am an independent craft 
brewer. I am here to lend the perspective of a manufacturer 
whose relationships with their agricultural partners are 
vitally important to our own success. I will testify as to how 
exporting beer benefits, not only urban and rural breweries and 
their communities, but also the hop and multigrain industries.
    Schooner EXACT is a relatively small producer in Washington 
State. We began in 2007 as a side project to our day jobs as 
educators. Schooner has grown from brewing on a half-barrel 
system with zero employees to a 20-barrel system and 25 
employees. Today, we run a brewery restaurant and distribute 
kegs and packaged product throughout Washington, Oregon, and 
Japan.
    Washington State has the second highest number of breweries 
in the Nation with over 300 breweries. I have had the pleasure 
of serving as the Washington Brewers Guild president for three 
terms, steering the guild through threatening times, and 
advancing State and Federal policy and legislation, such as the 
Craft Beverage Modernization and Tax Reform Act, favorable to 
brewers of all shapes and sizes as well as our agricultural 
partners.
    Beer is only as good as its ingredients. Hop varietal 
development increasingly allows world beer consumers to have 
the opportunity to taste the creativity and diversity of 
American agriculture. The hop industry's innovation is being 
exported as raw ingredients, as well as in its final form, 
beer.
    The American beer industry as a whole supports 1.75 million 
jobs, pays wages and benefits approaching $7.9 billion, and 
generates more than $200 billion in economic impact. Exports 
continue to contribute to the overall industry growth. Annual 
U.S. beer exports have seen an average growth rate of 14.3 
percent over the last 5 years.
    Within this larger number, craft brewing has experienced an 
average growth rate of 31 percent since the inception of the 
Brewers Association Export Development Program, the EDP. The 
EDP receives funding from the BA, small independent brewery 
members, and the USDA Market Access Program. The EDP uses MAP 
funds to examine potential target markets for the U.S. craft 
beer exporters, participate in trade shows, conferences and 
competitions, as well as conduct seminars and prepare technical 
materials about craft brewing and product quality.
    Schooner EXACT is a perfect example of how a small craft 
brewery can benefit from the EDP. The resources, networking, 
and competition opportunities are invaluable to a craft brewer. 
Our first event with the EDP was the American Craft Beer 
Experience, a two-day event in Tokyo and Osaka, Japan. Over 
4,000 attendees sampled beer produced by U.S. craft brewers.
    In Osaka, the EDP assisted with a seminar educating 
retailers and the media on maintaining beer quality through 
proper storage and serving conditions. After our visit, 
Schooner's sales climbed 29 percent. We are planning another 
Japan trip this year.
    Our participation in the EDP has also allowed us to enter 
international competitions. One such competition was the 
Brussels Beer Challenge where Schooner EXACT won a gold medal 
for Hopvine IPA and overall best in show against 1,100 
international entries. Though our export volume is relatively 
small, it is an important segment to our business, providing 
another sales channel in an increasingly competitive U.S. 
marketplace.
    Schooner EXACT has been relatively lucky to not encounter 
many obstacles to export activities. However, the EU's push for 
protecting beer styles, such as Kolsch and Oktoberfest, are 
worrisome. The beer industry appreciates any efforts that 
ensures that geographic indicator protections do not invalidate 
existing trademarks while granting users the ability to 
continue to use common names. Quality beer is not possible 
without quality ingredients. Craft brewers have higher hop and 
malt usage rates than their competitors, a direct benefit to 
the American agricultural producers.
    By implementing governmental policy favorable to the hop 
and barley industries, it ensures that the growing craft 
segment will have access to stable sources of ingredients from 
which to create a truly American beverage for domestic and 
international markets.
    Lastly, the USDA export assistant programs available to the 
agricultural community are relied upon and much needed. 
Congress can continue to expand U.S. trade and exports by 
reauthorizing and expanding upon those programs.
    After our success in the Japanese market, Schooner is eager 
to investigate new export markets for our beer. Hopefully the 
USDA, MAP, BA, as well as stable American grain and hop 
industries will all be along for the ride.
    Thank you for the opportunity to appear before your 
committee.
    [The prepared statement of Ms. McClung follows:]
    
    
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 Chairman REICHERT. Thank you.
    Thank you all for your testimony. I think it is one of the 
few hearings I have been to where everybody was on 5 minutes, 
so congratulations.
    It is the beer. Must be the beer. You had some beer and 
wine and cheese beforehand.
    So thank you for also agreeing to stay a few minutes and 
allowing each member to ask some questions.
    So I want to start with, of course, Mr. Foreman and then go 
to Ms. McClung. Shocker I should focus on two Washington State 
witnesses.
    But, Mr. Foreman, you, I think, laid out the statistics for 
your industry as far as growth when it comes to trade, 
especially in the areas of fruits and also in vegetables. I 
think sometimes that area of our economy is overlooked. Exports 
of fruits and vegetables have approximately doubled over the 
past 20 years. But there are some foreign barriers that you 
touched on, and they are holding back fruit and vegetable 
exports from growing even more.
    Besides high tariffs, I know firsthand about many of the 
protectionist nontariff barriers that countries put up against 
our exports. For example, Indonesia suddenly threw up a number 
of barriers against horticultural exports, which particularly 
hurt many Washington State growers. And I am glad that the U.S. 
is making some progress on that and taking action.
    But, Mr. Foreman, could you please describe how important 
exports are to Washington State fruit growers and what the 
opportunities are for fruit growers in the future for growth?
    Mr. FOREMAN. Thank you, Mr. Chairman. There are--95 percent 
of the 7 billion people in the world live overseas. To a large 
extent, they live in Asia. There is a huge emerging middle 
class coming in Asia who want good quality food. They want the 
better things of life, and part of that is fresh fruit.
    We think that there will be 2.7 billion middle class 
consumers in Asia by 2030. That is six times what the United 
States market is projected at that point in time. So we have a 
huge opportunity to raise high quality agricultural products 
and ship them to a world that will be hungry and demanding 
more. But there are terrible barriers.
    You mentioned the Indonesia barrier, which you have been 
instrumental in helping us work on, and I appreciate that very 
much. But Japan requires a 55-day cold treatment and methyl 
bromide fumigation prior to shipping. Now, what that really 
does is it closes out the market because they want to protect 
Japanese apple growers from competition.
    I have been to India. I was in India in the big market in 
New Delhi where there was Chinese Fuji apples side by side with 
Washington Fuji apples. Our Fuji apples cost twice as much per 
box. But the buyers wanted our Fuji apples, not Chinese apples. 
Why is that? Because of the terrible pollution in the air and 
the soil and the water of China. People in India are smart. 
They don't want to buy apples that have been irrigated with 
heavy water, with polluted water. They want Washington State, 
Oregon, California, fresh, clean water and minimal fertilized 
apples.
    We grow a lot of organic fruit. There are people in the 
world who have regulations to exclude our organic fruit on 
trumped-up reasons because they can't compete organically with 
the orchards that we have.
    You helped us gain full access to all our varietals to 
China last year. It has made a huge improvement. We have sold 
1.1 million boxes to China so far this year. But now India has 
tried to restrict our apples to entry by only one port. And the 
USTR and the USDA, the Department of State, and the Department 
of Congress all went to bat for the apple industry to work with 
India to try to open up that regulation.
    So my point is, it is an ongoing battle between success and 
barriers. And we need your support and we appreciate your 
support in opening up the barriers as they continually, through 
protectionist policies, erect new barriers.
    Mr. FOREMAN. And we need to be vigilant to have both free 
and fair trade for our products.
    Chairman REICHERT. Thank you for your answer. You flowed 
right into the second part of my question, so I won't even ask 
it. It was on barriers.
    But I want to move to Ms. McClung quickly. Agricultural 
exports are not limited to what is grown, as I said in my 
opening statement, raised, and harvested in America. Just as 
important are exports of products made from what farms produce. 
And with 300 breweries in Washington State and the innovation 
that I have seen, out of the 300, I just want to confess, I 
have only visited about four so far. So I have not been to all 
300 yet, but I have had the opportunity to taste, I don't know 
if anyone in this room has, but Chocolate Cake beer. So that is 
just one of the--Chocolate Cake beer. I know. It sounds 
delicious, and it is. I just had a sip.
    But I think you laid out all of the statistics very 
clearly. But tell us, maybe in a little more detail, why small 
breweries like yours decide to export and how exports to Japan 
have helped grow your business. And if you have time, maybe 
follow up with describe some of the barriers. You said there 
were not many barriers. But what do you see as, you know, as 
high tariffs or burdensome regulations, red tape, that sort of 
thing?
    Ms. MCCLUNG. Thank you, Chairman. When the opportunity to 
export to Japan came about, we felt compelled to take advantage 
of that. At the point--that point in time, we had some extra 
capacity in our brewing production, and so meeting that 
inventory volume was an easy thing to achieve. It is definitely 
important to diversify one's revenue stream and the export 
markets provides that ability to do so.
    Labeling can be a little bit of a challenge for breweries. 
The amount of packaged product needed to order in advance can 
be burdensome on one's cash flow. The brewing industry, in 
general, is a very capital intensive industry, and that can be 
mitigated through the SBA export assistance programs as well as 
the Import-Export Bank. And one excellent way to help 
invigorate small breweries would be with the excise tax 
reduction measure, the H.R. 2903. And that would really enable 
small breweries to be able to reinvest in that additional 
packaging or brewing equipment needed to fulfill their volumes 
for the export.
    Chairman REICHERT. Thank you for your answer.
    Mr. Rangel, you are recognized.
    Mr. RANGEL. Thank you again, Mr. Chairman, for calling this 
hearing. And I thank the witnesses for sharing with us the 
positive contributions that the agriculture community is making 
to our great country. Not many Americans are aware of the 
improvement of the quality of life as a result of your 
successful efforts.
    So when you go back home, I am pretty confident that when 
they ask you, how did Congress receive your testimony, that you 
should be comfortable in saying it was very, very well 
received. They may ask you: What do you think they are going to 
do about TPP? And I don't think any of you are going to say 
that you think it is going to pass before this election.
    Is there anyone here that thinks TPP is going to be on the 
President's desk before the election?
    So let's see where I can help you. One of the reasons why 
we don't have the votes for TPP, that there is a general 
feeling that with these trade bills there is a loss of jobs. 
And I don't think any of you can deny that, with an effective 
trade policy, that you are going to have to improve our 
infrastructure in order to be successful. We have got to have 
better seaports, better airports, better roads and whatnot. 
And, of course, if that was included in a bill like this, or 
part of a package, which I am certain that you would agree 
would be important in the long run, I think people might take 
another look at TPP.
    Another thing is that technology has to be a part of your 
successes. No matter how good you are or where you come from, 
you are competing with international forces, and your workforce 
must reflect that. And so if you had a good agreement and you 
still didn't have a workforce that was able to compete, here 
again, there are a lot of communities that believe if 
technology and education was a part of this overall package for 
the progress of America in the future, that they would take a 
look at it.
    Is there anyone that disagrees that we need this in order 
to be successful in our trade; infrastructure, technology?
    Another thing is that I can't find out any reason in the 
world why any of you would not want restrictions removed from 
exports to Cuba. You go into any Cuban restaurant and the menu 
is rice, beans, pork, and chicken. If that is not the U.S., I 
don't know what it is. And here again, for political reasons, 
which has nothing to do with improvement of our trade and 
exports, we don't have the slightest clue as to why the farmers 
and those people are doing so well cannot do even better in 
improving the quality of life for farmers and the rest of 
Americans.
    Is there anyone here prepared to comment in any way before 
you leave as to what you can do to improve the climate here in 
Congress to review some of the issues that I have raised?
    Mr. Mooney.
    Mr. MOONEY. Yeah, Congressman, the one thing that I know is 
dairy would benefit if we had a trade agreement where we could 
sell to Cuba. There is no doubt about that. We produce fluid 
milk, long shelf life milk that I know would be well----
    Mr. RANGEL. Who is your Congressman?
    Mr. MOONEY. Pardon?
    Mr. RANGEL. Who is your Congressman?
    Mr. MOONEY. My Congressman is Billy Long, southwest 
Missouri.
    Mr. RANGEL. Does he support your position?
    Mr. MOONEY. Yes, he does. He has been down there.
    Mr. RANGEL. Okay. Anybody else have any comments? Because 
we are talking about votes.
    Mr. Paap.
    Mr. PAAP. You know, when I harvest our crops here in about 
4 months, 4 of those 12 rows are exported. Forty percent is 
leaving the country. Transportation is very important to 
agriculture. It is key to trade.
    As you talk specifically about Cuba, you know, why would 
the United States, where we grow more than we can use, why 
would we not take advantage of a market just 90 miles away? We 
have the transportation advantage.
    Mr. RANGEL. Who is your Congressman?
    Mr. PAAP. Congressman Walz.
    Mr. RANGEL. Does he support you?
    Mr. PAAP. Congressman Walz has been very good on trade 
issues and the importance to have a market for those more than 
we can grow.
    Mr. RANGEL. Well, all of you can make a difference, perhaps 
not before this election, assuming we will have a country left, 
but certainly after the election we all have homework to do. 
And I wanted to tell you how much I appreciated the expertise 
which you have brought before this committee. Thank you for 
your commitment.
    Chairman REICHERT. Thank you, Mr. Rangel.
    Mr. Nunes, you are recognized.
    Mr. NUNES. Thank you, Mr. Chairman. And I just want to say 
briefly that Mr. Rangel and I have had this discussion many 
times. But clearly the issue of Cuba is quite complicated, 
largely because of the support of terrorism by the Castro 
regime. A lot of history here. I am sure that Mr. Rangel will 
argue that it hasn't worked and, you know, this continues to be 
a debate before Congress. But I think it just should be stated, 
for the record, that the Castro regime has blood of Americans 
on its hand and continues to do so. And I think that is the big 
concern is with the Castro brothers being in charge in Cuba 
there. We, obviously, would like to sell agriculture products 
to the Cuban people and we would like to see the Cuban people 
live in a free democracy.
    I want to go into--give Mr. Mooney an opportunity to talk 
about--could you talk about specifically the pros of where we 
will be able to export dairy products into and then maybe some 
of the areas that you would like to see improved with TPP?
    Mr. MOONEY. Okay. And TPP, when you did the--when we did 
the final analysis, it was positive for us as far as exports. 
We are getting more exports into Japan. Presumably, more 
exports into Canada, which will help us. New Zealand is getting 
more exports into the United States. But on balance, we think 
we are in a good shape.
    The two big benefits that we saw, and you was very much 
helpful in this, Congressman Nunes, was SPS rules and GI rules. 
Because with the SPS rules, you know, countries could change 
their policies it seems like overnight. And what you have done, 
I think, it is all about process. It is more time, more 
notification, more risk assessment, more penalties for 
countries that don't abide by the agreements. So that was a 
major issue for us in TPP was the SPS rules and the GIs. But 
there was also other countries there in TPP that we can export 
to.
    And if you look at how our exports have grown, in 2000, we 
exported 5 percent of the U.S. dairy products. Today, we are 
exporting 15 percent. One day out of every week is for exports.
    And to Congressman Rangel's point on technology, there is 
plants being built in the U.S today that is having the most up-
to-date technology there is on whey proteins and stuff. Twenty 
years ago, whey was something we put down the drain. Today, 
whey is the most important part of milk, really, for infant 
formula and a lot of things like that. So technology is great, 
and I think the dairy industry is leading that in technology 
and dairy.
    Mr. NUNES. Thank you, Mr. Mooney.
    Mr. Weber, I will give you the same question. What are the 
markets that you are most interested in and then where could we 
see some improvements?
    Mr. WEBER. Yes. Well, obviously, again, I will make a 
comment on Cuba. I think, you know, our organization is a 
protrade organization and we are willing to participate in 
whatever markets would come about. Our resources are being 
focused on TPP. Access into these countries is just--it is 
imperative for our industry. These are pork-consuming people. 
Their economic development and economic growth potential is 
huge. We want to be a part of that market. So that is why we 
are spending our efforts on TPP.
    Again, many of the issues we talked about today, the 
phytosanitary issues and stuff were clearly addressed. The food 
safety issues were clearly addressed in the TPP negotiations, 
and we are very optimistic about that. Very helpful. There 
could be some implementation issues that we are, you know, 
concerned about. But we are going to focus on getting TPP 
passed and we are going to monitor, as we always do, as we have 
done in the other previous free trade agreements, how these 
agreements are implemented and do the countries in fact live up 
to the agreements as we move forward.
    Mr. NUNES. Well, thank you. I want to thank the panelists 
for being here.
    And, Mr. Chairman, I will just say that it is critical that 
we pass TPP largely because I think some of the witnesses said 
it today, but this really sets the rules of trade for the 
future. I think the WTO is really outdated, and this really 
will be the standard agreement that we can then build the EU 
agreement of off and hopefully will fix some of the problems 
that we see in the WTO. So I want to thank all of you for being 
here today. And I yield back my time.
    Chairman REICHERT. Thank you, Mr. Nunes.
    Mr. Smith, you are recognized.
    Mr. SMITH. Thank you, Mr. Chairman. And thank you to our 
witnesses today for sharing your perspective. Certainly, I 
don't have to tell you that Nebraska is a big ag producer, and 
certainly with the TPP outlook over the next 16 or so years 
with $10 billion in increased output, that, I think, shows a 
lot of promise. I hope that we can have a forward-thinking view 
of trade in general. And certainly, the benefits that TPP can 
bring U.S. agriculture, not just Nebraska agriculture, but 
U.S., whether it is California or Kansas, on each side of me 
literally and figuratively.
    The fact of the matter is, I think we have got a bright 
future for agriculture as it relates to trade. However, I am 
concerned about, for example, the Chinese delays in recognizing 
biotechnology and that--the impact that that actually has on 
producers themselves.
    Mr. Paap, could you discuss the negative impacts of China's 
delays in improving biotechnology products and how effective 
has the U.S. Government been in addressing this problem?
    Mr. PAAP. Well, certainly, in the last 36 crops that we 
have planted on our farm, biotechnology is one of those things 
that really adds to our farm. You know, we can raise more crop 
on less land with less water, less soil tillage, fewer crop 
protection products. We like to say we get more crop per drop 
using biotechnology. And certainly, China needs to expedite 
their approval process to biotechnology.
    The dialogue has resulted in a commitment by China to have 
products approved in a timely manner. It is not that timely. We 
need to speed up the process. Having access to those markets 
with biotechnology is so important.
    Mr. SMITH. And can you speak to how the U.S. Government has 
handled this?
    Mr. PAAP. Well, certainly, we are working not only with 
USDA but USTR on ways to improve the process. But, you know, 
there is ways to slow down trade besides, you know, the 
tariffs, those taxes at the border, and that is the things like 
biotechnology and those types, SPS.
    Mr. SMITH. Okay. Now, we talk about scientific basis for 
biotechnology and various regulations, perhaps. But let's now 
shift gears just a little bit to the unscientific regulations, 
such as Vermont's labeling law and our ability to convince, 
perhaps, the EU to change course on some of their biotechnology 
regulations and views.
    Can you discuss perhaps how the Vermont law might be 
impacting the marketplace or certainly for producers 
themselves?
    Mr. PAAP. Well, certainly from the American Farm Bureau 
perspective, labeling is very important. We want to protect the 
sanctity of the label, believe the label is for things like 
nutritional differences, allergens, things like that. The label 
is not a marketing tool. We should talk more about the food and 
what is in the food or not in the food versus how it was 
produced as far as a production method and things like that.
    We certainly have a concern with a patchwork of different 
State labels and support a national labeling standard.
    Mr. SMITH. Okay. Shifting gears just a bit, we have got the 
U.K. is set to hold the referendum on the so-called Brexit on 
June 23. And if the U.K. were to leave the EU, they would be 
left out of TPP, and our administration has indicated they are 
not interested in pursuing a bilateral agreement. The U.K. has 
also taken a more scientific approach to the regulations of 
certain pesticides and biotechnology, as well, than perhaps the 
rest of the continent.
    Can you expand on perhaps the impacts Brexit would have on 
U.S. agriculture exports?
    Mr. PAAP. Exports are so important to our prices on the 
farm. Farm prices are based on supply and demand. Certainly, 
supply is mostly the weather. Hard to control the weather. But 
we certainly can control or we can increase that demand and by 
increasing international trade.
    So whether it is with countries in the Asia Pacific, 
whether it is European Union, whether it is Cuba, it is 
important. It has already been mentioned, 96 percent of the 
people in this world of our customers for our U.S. food do not 
live in the United States.
    So from a Farm Bureau perspective, we certainly want to 
have trade, international trade, with anyone and everyone that 
is willing to work with us.
    Mr. SMITH. Thank you. I yield back.
    Chairman REICHERT. Mr. Neal.
    Mr. NEAL. Thank you, Mr. Chairman.
    Thanks to the panelists. I thought the testimony was 
superb.
    I think the limit everybody would acknowledge is that you 
have all got a great story to tell, and the textbook analysis 
of trade, which up until a point was very bipartisan here, 
indicated that much of what you are saying is entirely 
accurate.
    Now, at the same time, you can see where our Nordic friends 
have begun to oppose science in terms of New England lobsters, 
you can see that the French farmer demands a certain level of 
subsidy, that the Italians question what really constitutes, as 
Mr. Mooney pointed out, parmesan cheese. Overcapacity in China 
right now means that they are dumping steel across America. And 
the American people, for a variety of reasons, have now begun a 
slow but steady metamorphosis on their support of free trade.
    And so I would leave it to the panelists to tell me how you 
think that we could do a better job of selling many of these 
agreements beyond the regional advantages that each Member of 
Congress gets.
    The example that comes to mind for me would be the 
Panamanian FTA, which means that the Port of Boston is about to 
do quite well. It is being deepened as we speak, and those new 
tankers that are coming through the canal are going to find a 
very nice home in Boston.
    And the problem is, as one who has been pretty supportive 
of what you have pointed out, that I find that now, unless a 
specific geography of the country benefits, it is harder to put 
together the consensus based upon the arguments that you have 
all made about advancing trade.
    Now, the latest example would be, I suspect, that TPP would 
have a much easier path if we could have left out Vietnam. You 
see the example that I am raising? But the problem with 
multilateral agreements is it becomes very hard to leave out 
anybody.
    So I would be very interested as to how you might respond.
    Mr. WEBER. I followed you a long ways there, but I am not 
sure exactly, Congressman, where your question was going. It is 
our understanding that these countries will have an opportunity 
at some point down the road to participate in TPP if it is 
passed.
    Mr. NEAL. Let me just qualify that, Mr. Weber. My 
suggestion is that you would find the agricultural States, by 
and large, to be pretty supportive of free trade.
    Mr. WEBER. Absolutely.
    Mr. NEAL. I think there is general agreement on that. I 
understand why. At the same time, those States that have a 
preponderance of manufacturing would question the validity of, 
actually, I think the enforcement of some of the trade 
agreements. So maybe you could take it from there.
    Mr. WEBER. I guess my response to that is often these 
arguments are about jobs, manufacturing jobs, and we went 
through those statistics before. Employment peaked way before 
free trade agreements came about, has declined significantly 
because of technology.
    I think my point would be that in free trade agreements it 
is about competition. To me, it is. It is about competition. 
And you have to be willing to compete. The statistic alone that 
sticks out to me is that 95 percent of our global populations 
outside of this country, are you afraid to compete with them in 
whatever sector it is, whether it is producing pork, like I do, 
or whether it is manufacturing?
    I think you have to look closely and analyze your business 
and just decide whether you are willing to compete and look at 
what caused the changes if you can't compete with another 
country, what are the reasons. And, obviously, technology has 
been a huge driver in the last decade for becoming more 
efficient, both in this country and abroad.
    Mr. NEAL. To your point, though, and I understand the 
argument you are making, but if the head of the automobile 
industry were sitting in those seats right now, capitalists 
all, believers in competition, they would object to the manner 
in which Japanese automobiles flooded America, in which the 
Japanese simultaneously closed their markets to the American 
automobile or made it much harder. And remind ourselves that 
the FTA with Korea, that the UAW actually supported the Korea 
Free Trade Agreement and now they are having trouble, based on 
the arguments they previously made, trying to figure out how we 
are going to export automobiles to Korea because it hasn't 
quite gone the way that we had intended.
    And I thank the panelists, Mr. Chairman. Thank you.
    Chairman REICHERT. Thank you.
    Dr. Boustany.
    Mr. BOUSTANY. Thank you, Mr. Chairman.
    And I want to thank our witnesses, as well, for being here 
today and providing testimony.
    I want to take a step back for just a moment. Consider that 
the United States created the modern global trading system 
after World War II. We have led that effort, and of course 
there are continued problems and so forth with market access as 
we go forward, and for the longest time, we were at a 
standstill. And I do believe getting trade promotion authority 
passed was a vital step, a catalyst to having a real coherent 
foreign economic policy for our country. And I do firmly 
believe that the United States should continue to lead in 
opening markets around the world and lead this global trading 
system.
    Clearly, it is in our interest to have a growing economy. 
It is necessary, if we are going to see growth going back to 
3.5 or 4 percent, to open up these markets for American 
producers, American manufacturers. Higher wages, more jobs, it 
is good for us. But I also believe that we should not cede any 
market to any country as we go forward. We should try to lead 
in all these markets in knocking down tariff and nontariff 
barriers.
    I do believe TPP is a good step in the right direction. We 
are still trying to work through some technical issues, but I 
do believe at the end of the day TPP is going to be the model 
for what the future trading system looks like, and it is 
certainly, on balance, a good agreement for agriculture as a 
whole. But I do believe we could also do better, as well.
    My State, Louisiana, is an exporting State. Agricultural 
exports are a dominant part of it. In fact, 25 percent of our 
State's economy depends on exports, and these are good-paying 
jobs. We have ports, with the Port of New Orleans, Lake 
Charles, and so forth, that position us to do very well in the 
global trading system.
    A couple of questions. One, I am concerned about our 
position with Cuba. We are losing market share, agricultural 
market share with Cuba. And, in fact, U.S. exporters used to 
rank first in terms of providing agricultural goods into Cuba, 
and we have now fallen to number four. Rice, in my State, we 
are the third largest rice-producing State, we have lost market 
share pretty significantly to the EU, to Brazil, to Argentina, 
and other countries.
    I do believe that the shift in 2000, the year 2000, which 
put prohibitions on credit transactions is a factor in that. 
And we can argue all day long about Cuba and opening trade 
agreements, but I do believe a simple step would be to allow 
for credit-based transactions. I think we would start to regain 
some of that market share.
    So I am curious to get your opinion on that issue, and then 
I have another follow-up question.
    Mr. MOONEY. Well, one thing I would say real quickly is 
Cuba, again, the United States ought to own that market as far 
as agriculture goes. I mean, we are so close, we ought to own 
it.
    Mr. BOUSTANY. I agree.
    Mr. MOONEY. Going back to TPP, your comments on TPP and 
other countries, we should want to export to every country, I 
believe, because we are the most productive country in the 
world. From a dairy standpoint, we have the most nutritious 
product and the safest product around the world. Nobody can 
compete any better than we can, and we can do it on a cost 
basis also.
    The thing we have got to watch out for is these Johnny Come 
Latelies that come to the table late. Canada is an example. 
They were late signing up for TPP, and now they are already 
throwing things, that they are not wanting to follow the rules.
    Mr. BOUSTANY. Right.
    Mr. MOONEY. And I know this committee is overseeing making 
sure the rules are abided by, but that is what we have got to 
do to every one of these countries, make sure they abide by the 
rules or some of this is worthless.
    Mr. BOUSTANY. Well, I think with TPP we have to get this 
right because this is going to be the standard, and so we will 
work with you on that.
    Mr. Paap, rice, I want to talk a little bit about the Farm 
Bureau position with regard to rice and rice market access. You 
know, when we did South Korea, rice was really not part of that 
agreement and my rice producers were not happy about it. TPP, 
we have gotten some market access now into Japan. I would have 
liked to have seen more. Hopefully this is a starting point.
    What is the Farm Bureau position with regard to rice access 
and the way TPP will play out?
    Mr. PAAP. Well, certainly in American Farm Bureau we 
represent all of agriculture, all the commodities. In 2015 rice 
exports were nearly 4 million metric tons with an export value 
of over $2 billion. This was the second largest volume in the 
last decade.
    One of the issues is Japan, as you mentioned, is very 
protective of their rice producers, kind of isolating them from 
that competition, very high tariffs. Despite that, U.S. 
producers shipped more than 320,000 metric tons of rice to 
Japan in 2015. They came via the WTO commitment.
    We believe that the rice producers, U.S. rice producers, 
will have the opportunity to capitalize on a U.S.-specific TRQ 
of up to 70,000 tons with the TPP. We are still going to face 
some more competition with Mexico, as Vietnamese rice exports 
will have those lower tariffs. But we want to make sure we can 
do everything we can, that whether you are a rice producer, a 
corn producer, a cattle or dairy, whatever the products are of 
U.S. agriculture, that we are at the table and have that 
ability to provide our products.
    Mr. BOUSTANY. Thank you. My time has expired.
    Thank you, Mr. Chairman.
    Chairman REICHERT. Mr. Paulsen.
    Mr. PAULSEN. Thank you, Mr. Chairman, for having a good 
host of folks testifying on agriculture in particular, and it 
is pretty clear it is important to our economy.
    And Minnesota, as Mr. Paap had mentioned, we are a leader 
in a number of different areas. Second largest exporter of 
pork, fourth largest exporter of soy beans, and the fourth 
largest exporter of corn.
    And, Mr. Paap, as president of the Farm Bureau, you know 
these statistics, you have shared them already. And you 
mentioned the 4 rows, the 40 percent, 4 rows out of every 10 
that you are planting that are being exported. And a big part 
of this is taking pride in our farmers' accomplishments and 
ranchers' accomplishments of the direction we are going, but 
also continue to look for new opportunities and additional 
opportunities of what trade is all about and selling overseas.
    Mr. Paap, just expand a little bit. What are the most 
important opportunities that are now on the horizon? You talked 
a little bit about the nontariff barriers. You mentioned 
biotechnology, having science-based food safety standards. Any 
other examples of nontariff barriers that prevent us from 
maximizing our opportunity to export and help our farmers here 
at home?
    Mr. PAAP. Well, certainly, in Minnesota we are very proud 
of the over 2.3 billion in ag products that we export. And 
those exports are important. TPP will be important to our 
animal agriculture.
    I think one of the things that we sometimes forget about--
yes, animal agriculture will be probably a bigger winner than 
other parts in trade, but just because we don't export the corn 
and soy beans we grow here, we can use those corn and soy 
beans, those go into the livestock as animal feed.
    And one of the things that we can do, that is that adding 
value, that adding jobs in our local community that is so 
important. And it also is important for generational 
sustainability. Animal agriculture many times gives those 
opportunities for adding people in the farming operation in 
that family farm.
    So we want to make sure that we have got that ability to 
export specifically to the nontariff. And those are the hard 
ones. You can see the tariff. You can negotiate that. It is a 
little harder, whether it is biotechnology, whether it is other 
nontariff items. That is why we need to have trade agreements, 
and that is why we need to follow those trade agreements.
    Mr. PAULSEN. Ms. McClung, let me just touch base with you, 
because I am a member of the Small Brewers Caucus. I am the 
lead author of the bill that you mentioned, the Craft Beverage 
Modernization Act. I am familiar with the challenges that you 
face on a daily basis as a small brewer and the folks that you 
represent there in Washington State, and you have an impressive 
story.
    I think it is also helpful for this subcommittee to 
understand how the benefits of agricultural exports that extend 
beyond just those who grow and raise the products themselves. 
And can you just talk a little more about how furthering these 
opportunities for America's small brewers overseas is actually 
going to help operations expand potentially for you or for the 
others that you represent in Washington State and the 100 small 
craft brewers we have now in Minnesota.
    Ms. MCCLUNG. Excellent. Thank you.
    Expanded trade would obviously mean increased sales for our 
brewery, and that would allow for a diversified revenue stream, 
which is important in a time of a shifting landscape in the 
brewing industry with all of the consolidation of the big 
breweries, as well as the explosion of the new craft breweries 
coming online. These additional sales would lead to additional 
employment opportunities for our own community as we are adding 
staff to help fill those export orders and production of those 
export items.
    And to touch base on the international competitions, for an 
American beer to take ``Best of Show'' in Belgium, which is 
renowned for their beer, just raises the profile of all 
American craft beer. And so that was a pretty great 
accomplishment and another testimony to the exporting.
    Mr. PAULSEN. Wonderful.
    And, Mr. Mooney, we are going to run out of time, but I 
think that one of the biggest barriers, looking at parmesan 
cheese right there in your basket there, one of the biggest 
barriers we have is the misuse of these protected geographical 
indications. And applying these protections in generic terms in 
establishing them through very unfair and nontransparent 
procedures is a big problem for U.S. dairy producers.
    And could you just discuss maybe the impact of the EU's 
misuse of GIs on U.S. dairy exports and how that can further 
threaten the exports in the future? It is something we need to 
address.
    Mr. MOONEY. Yeah, and we are part of a consortium for 
common food names. It is actually trying to do an economic 
analysis now of what that would actually mean to the dairy 
industry, and we know it is going to be in the billions, with a 
B, of the economic impact for dairy in the United States.
    And it is interesting, just to relate to this, this 
parmesan 2 years ago won ``Best of the World Class Cheese'' in 
Europe. We no longer can go to the European Union and be part 
of that contest because we beat them once. That is just a 
little interesting, I thought.
    But, no, this is a big deal. And we are not against GIs. 
Parmigiano-Reggiano, if it is compound names and geographic 
areas, that is fine. But when you are using a name parmesan 
that has been used here for decades, that is ridiculous to me. 
It will have a large economic impact.
    Chairman REICHERT. Thank you, Mr. Paulsen.
    Mr. Blumenauer.
    Mr. BLUMENAUER. Thank you.
    I appreciate several of you referencing the enforcement of 
trade agreements, and I would just put in a slight plug. One of 
the things I worked on with Senator Cantwell was a Trade 
Enforcement Trust Fund, which was a part of our customs 
approach for the earlier trade legislation.
    We have $15 million dedicated in the House CGS 
appropriations for the trust fund. There is nothing in the 
Senate. It would be great if the assembled multitude 
represented here of all the various agricultural interests that 
you are connected with could lean in a little bit on that 
process.
    Enforcing trade agreements is expensive, it is time 
consuming, it is hard. The thought was having a trust fund to 
make sure that all our agreements were honored would put us in 
stronger footing, not only to deal with people who are cheating 
on us, but make it less likely that we would have problems in 
the future.
    So if there is any way to look at that trust fund and to 
add your collective voices to having the Senate put that money 
in and that ultimately it is there, I think it might make all 
our jobs a little bit easier.
    Continuing my northwest theme here, we love the friendly 
rivalry with folks across the Columbia River from us in craft 
brewing, for instance, cider craft brewing. You are even 
starting to produce wine in Washington, I understand.
    I wondered, Ms. McClung, if you could just elaborate 
slightly on the specific challenges you face trying to 
penetrate the Japanese market to be able to go from a small but 
growing enterprise with an opportunity to expand your economic 
reach in Japan or elsewhere.
    Ms. MCCLUNG. Thank you. That is a great question.
    One of the challenges that we have encountered is the 
transport and the storage of our product once it arrives. And 
so that is why the export development program gave the 
educational seminar to retailers regarding proper storage. 
Because it doesn't do American craft beer any good to have our 
product leave the U.S. in pristine condition and then, once it 
reaches Japan, the hop flavor and aroma is depleted or it has 
gone bad due to improper handling. And so just the education 
side of what do we do with craft beer once it has arrived in a 
hot, humid climate.
    That has been one of our challenges. Otherwise, the 
Japanese people, we were very warmly welcomed and they have a 
great excitement for many things American, and craft beer 
definitely was on the top of their list. There is some 
competition with their own domestic industry, but our hop 
profiles, both with Oregon and Washington hops, definitely puts 
us a step ahead.
    Mr. BLUMENAUER. I appreciate your reference to the 
infrastructure. In terms of specifics, in terms of tariffs or 
procedures, I would welcome any feedback if it occurs to you.
    Mr. Foreman, you also, I think, represent sort of the other 
part of the equation, not so much talking about the 
industrialized modernization of American agriculture, but you 
are talking about fruits and vegetables, nuts, berries. Some 
people would call it food, not just the commodities, specialty 
crops.
    Can you speak to the challenges of being able to penetrate 
foreign markets from your perspective.
    Mr. FOREMAN. It has been very difficult to get into some 
foreign markets, but the Market Access Program, which Congress 
has enacted over and over again, has done a great job in 
opening up some doors. For example, the Oregon and Washington 
pear growers are represented by the Pear Bureau Northwest and 
the Northwest Hort Council, and they have spent money on cold 
chain training and introducing the foreign handlers in Vietnam, 
in the United Arab Emirates, in India, into how to handle and 
care for a very perishable commodity, like a Washington or 
Oregon Anjou pear or a Bosc pear.
    These are dessert quality, extraordinarily delicious 
fruits, but if you put it on a ship and it takes 21 days to 
cross the Pacific Ocean and it is not properly handled in the 
cold chain, and then once it gets to the street market in 
Mumbai or New Delhi nobody knows how to handle it, it becomes 
worthless fast.
    And so the Market Access Program has allowed us, in 
cooperation with some California citrus products and with some 
California grape growers, to join forces to train exporters or 
importers from their side and handlers from the grocery store 
cold chain down to the street market vendor in how to properly 
handle a perishable crop.
    So there are barriers, there are challenges, but the Market 
Access Program has consistently, year after year, helped us 
overcome some of those challenges.
    Chairman REICHERT. Mr. Marchant.
    Mr. MARCHANT. Thank you, Mr. Chairman.
    As the committee knows, anyone who has read much about the 
trade bill, Texas beef is considered to be one of the big 
winners in a TPP bill. But it is affected much by the same 
barriers that the rest of our agriculture is affected by--
tariffs, sanitary, phytosanitary, everything that affects. We 
have a huge border with Mexico. We deal with that all the time. 
These barriers are providing really very big impacts on our 
trade with our current partners, Canada and Mexico.
    But many of our row crops are considered to be low-value 
crops, so they are very dependent on high volume and very, very 
intensive in pest control, et cetera, et cetera. So the ability 
of the farmer to get these crops out of the country, this 40 
percent, I don't know what percentage of our crops in Texas go 
overseas, but the profitability really has to do mainly with 
tariffs.
    Mr. Paap, since you are in that crop category, with trade 
involved in so many of these different agriculture sectors, how 
can various barrier eliminations best serve my State, Texas?
    Mr. PAAP. Well, certainly reducing tariffs is important. It 
is crucial to increase those beef exports. Japan will reduce 
their 38.5 percent tariff to 9 percent over 15 years. We 
believe this, along with other export growth into the region, 
should add about 1 billion to the U.S. beef exports.
    You are exactly right, Congressman, beef is the largest 
agriculture sector in Texas to benefit from TPP, with over 190 
million of the 340 million additional exports being for beef. 
As we look at trade agreements and as we look at different 
crops, different products, things like that, TPP gives that 
opportunity for many, certainly some more than others. But when 
you represent all of agriculture, we always look at trade 
agreements, what it does for all of agriculture. But certainly 
beef is an important part and we recognize that.
    Mr. MARCHANT. Thank you very much. Yield back.
    Chairman REICHERT. Mr. Young.
    Mr. YOUNG. Thank you, Mr. Chairman.
    Thank you all for your appearance here today.
    I am going to focus narrowly on the issue of implementation 
and enforcement, enforcement in particular. As it has been 
pointed out here, we can have a very well written, well crafted 
trade agreement, one that pleases not just our ag producers in 
a State like mine that is a major ag producer. But if those 
provisions aren't enforced and predictably enforced, then that 
creates great challenges.
    You have dealt with some of these challenges in a very 
direct and on-the-ground way. Could you speak to the challenges 
of implementation? And perhaps you even have some ideas about 
how we could improve enforcement. One idea that has been baked 
into this agreement, referenced by one of my colleagues, was 
the Trade Enforcement Trust Fund.
    Are there other things we ought to be looking at, 
considering, as we try and ensure that the provisions that are 
important to you are, in fact, strictly enforced?
    Mr. Weber, we will start with you, sir.
    Mr. WEBER. And there are some trade implementation issues 
that we are very concerned with. They are being worked on. We 
have been working on them since last October when the trade 
agreement was announced, had some fears then, and are still 
working on them. And we are very hopeful that we are making 
significant progress on some of these issues.
    Again, our focus has been on the total benefits of the 
package to us, and we have had to get the agreement in place, I 
guess, first.
    But part of our role at NPPC is to monitor what we have 
been talking about here, to monitor if countries live up to 
those agreements once they are implemented and take place. And 
we have had significant successes in the past with working with 
the individual sectors that may be impacted on an 
implementation issue, and we are going to continue to do that. 
And we feel that is our best strategy.
    We need access into the market, and we will fight for these 
implementations to the best of our ability prior to getting 
there. And if the country doesn't live up to them, we will 
continue that pursuit through whatever means is available to 
us.
    Mr. YOUNG. Well, I know in my home State, our ag sector 
could benefit immeasurably from consummating this agreement. 
Projections have the State of Indiana realizing an annual 
increase of $80 million in corn and soy revenues, $50 million 
increase in net pork exports. We could go on and on.
    But I do think there is a linkage, especially outside of 
the ag sector, when you are dealing with some corners of our 
manufacturing economy, between faith or trust in enforcement on 
one hand and the particular provisions on the other. And so 
hoping we can create more confidence in that area.
    Mr. Mooney, you spoke earlier to Canada and your belief, at 
least, that they have not followed particular rules important 
to you. Could you speak to that episode, please?
    Mr. MOONEY. Yeah, in my written testimony there are 
actually four examples of things that we think that they are 
not going along with the current agreements that we have or 
won't go along with TPP. And I think the key is the penalty, 
what is the penalty for not doing what you are supposed to do, 
because if there is not a strict enough penalty, the people who 
want to find loopholes, they will continue to find loopholes.
    So I think we have got to have risk assessment, what is the 
risk, and what is the penalty, and the penalty has got to be 
great enough to stop what is going on.
    Mr. YOUNG. Mr. Paap.
    Mr. PAAP. Well, American Farm Bureau believes, whether it 
is in implementation process or an enforcement of anything as 
we deal with rules, regulations, that the process needs to be 
transparent. We need to make sure we have got all the 
stakeholders involved, that everybody is at the table.
    And as we look at specific to enforcement, there are 
concerns with those that are bending or breaking the rules, we 
want to make sure as we are having those transparent 
discussions that they are based on rules based, they are 
science based, and that we follow the rules. That is what life 
is all about, is we need to set the rules, we need to know how 
to follow them, and what happens if we choose not to follow 
those rules.
    Mr. YOUNG. As someone who raises children and not grow 
crops, I understand that indeed.
    I yield back.
    Chairman REICHERT. Thank you, Mr. Young.
    Mr. Kelly.
    Mr. KELLY. Thank you, Mr. Chairman.
    Thank you all for being here.
    When we talk about all these market opportunities and then 
the key becomes, oh, so how accessible are they? And I am from 
Pennsylvania. Every one of us can talk about what is important 
to our district and our State because we are all involved in 
agriculture. Agriculture is Pennsylvania's number one industry.
    But in the EU, if we look at a lot of things that are 
keeping us out of there, it is not transparent, it is 
unpredictable, EU regulations are there. So I keep hearing 
about we have these agreements. I really do wonder if there is 
such a thing as a free trade agreement, because people play 
with so many different things on it.
    And each of you, just to discuss a little bit about what 
keeps you out of those markets and how much of it is actually 
factual. Mr. Paap, any of you, because you all face the same 
problems.
    Mr. FOREMAN. Well, I had a container of organic pears 
shipped to Rotterdam, and when I was sitting at my desk I got a 
phone call from the shipper, and he said, your container has 
been rejected because it has such-and-such a chemical on it. 
And I said, that is impossible, we don't have that chemical in 
the State of Washington. And he said, well, they found it on 
your pears.
    So I called my chemical supplier, and I said, do we ever 
have that chemical? Has it been licensed? Is it available in 
the State of Washington? He said, no, it is a fraud. It is a 
lie. They are using you as a scapegoat.
    So I had $100,000 of pears sitting on a dock in Rotterdam. 
And the shipping agent calls me back and says, well, I can sell 
them for animal feed for 10 cents on the dollar. It is your 
choice. You either take them back, pay $20,000 to ship them 
back, or dump them for 10 cents on the dollar.
    That is a good, real life example of the problems that 
farmers have when they are dealing with nonrule-based, 
nontransparent, phony systems.
    Mr. KELLY. Yeah. Well, I mean, rather than everybody, 
because we have such limited time, someone gets so badly gamed 
on this. I think this is the thing that probably bothers me 
more than anything else. We talk about free trade, but then we 
say, so what are you going to do about? You had pears sitting 
on a dock, and I would just assume that they probably go bad 
after a while. I know you start with a green banana, it turns 
to a green and yellow banana, it turns to a yellow banana, then 
a yellow and brown banana, then a black banana, and then it 
doesn't become good for anything.
    We get so badly gamed in these trade agreements. This is my 
perception of it, of what should happen in the automobile 
industry. What would we do about it? Because it comes down to 
what you just said. So what was the remedial? So what are you 
going to do, take 10 cents on the pound for it or throw them 
away?
    Mr. FOREMAN. So we took 10 cents on the dollar. What else 
can you do? Your question was what rule of law, what systems 
can a trade agreement put in place to protect farmers and 
traders, and the answer is something better than we have now.
    Mr. KELLY. All right. So that all takes place during 
negotiations. But I keep hearing about this market that is 
outside of the United States and I say, yeah, that is fine, if 
you have access to it. And if you get so badly gamed you can't 
play in that field?
    Mr. FOREMAN. I haven't sent any pears back there since.
    Mr. KELLY. I don't blame you. I don't blame you.
    Now, Ms. McClung, first of all, congratulations on your 
award-winning performance. But each of you do something in 
addition to what you actually do. Talk about some of the other 
opportunities that take place in America whenever we do trade 
and whenever we expand our market, because we have bigger 
market accessibility. Because you have other people that 
produce things that help you produce your final product. So 
whether it is machinery or whatever it is, there are a lot of 
jobs involved in that, kind of ancillary things that maybe we 
don't recognize.
    Ms. MCCLUNG. Definitely. Expanded trade to other markets 
would also help our allied industries, such as equipment 
manufacturing, stainless steel, producers of equipment, 
fermenters, which are also used by our friends in the dairy 
industry as well, and packaging equipment, and even branding. 
They all need merchandise support to promote your brand out 
there, so your T-shirt manufactures are even going to get a 
bump from it. It is really exponential.
    Mr. KELLY. Mr. Weber.
    Mr. WEBER. For our industry to grow and prosper, trade is 
absolutely essential. I mean, we basically do have a mature 
market here in the United States. And I have a young son at 
home and young herdsmen working with me, that TPP is their 
future. It is their future. It is the growth of the industry. 
And to us gaining access into these markets will be critically 
important for the next generation.
    Mr. KELLY. So it creates an awful lot of jobs, maybe 
something we don't look at right off the top, but these are 
incredibly job-producing products that you put out there. And 
what I think bothers me is when we are the most attractive 
market in the world, why did we end up with such lousy trade 
agreements? I would think if you deal from a position of 
strength you would have a little more leverage.
    And I think when I look at this, I say, what in the world 
are we doing? We are getting gamed so badly. And we continue to 
sit back and say, boy, I wish they would play by the rules. 
Well, if there is no penalty for not playing by the rules, why 
the heck would they?
    And I know you face it every day. And I have got to tell 
you, we have such an opportunity, but we have got to be 
stronger. If we are a strong country, we are a strong country, 
and we have to make trade agreements that really benefit not 
only our workers but our entire economy, and we have the 
ability to do better. Why we don't, I will never understand.
    Thank you, Mr. Chairman.
    Chairman REICHERT. Thank you, Mr. Kelly.
    Sometimes we have to help him with the clock.
    Nothing. I said, sometimes we have to help you with the 
clock.
    Mr. KELLY. Well, the clock is running out on all our 
businesses. This is the thing that bothers me. We think it is 
something about a clock; it is not about a clock. It is about 
losing our economy, and we are sitting here watching it, and we 
are wringing our hands and saying what the heck can we do about 
it.
    We are the biggest economy in the world. Everybody wants to 
participate here. And my question is, if you want to 
participate, let us participate too. I am so tired of the damn 
debates over this stuff and we lose market share. I have 
watched General Motors go from 25 percent of the car market and 
30 percent of the truck market--that was just Chevrolet by the 
way, not of all General Motors--General Motors now tries to 
capture 13 or 14 percent of the market.
    We have allowed ourselves to be gamed so badly, we have 
lost jobs in every segment of our economy because we don't 
stand strong for the people that we represent.
    Sorry to get carried away, but I think we are way past the 
midnight hour when we talk about these things.
    Chairman REICHERT. We appreciate your energy, Mr. Kelly.
    Ms. Jenkins, you are recognized.
    Ms. JENKINS. Thank you, Mr. Chairman.
    And thank you for our panelists for being here today.
    First, I would just like to say that as a daughter of dairy 
farmers, I find the EU strategy of using geographical 
indications to impose barriers to U.S. exports very troubling. 
I agree with Mr. Mooney, we need to do all that we can to 
ensure our ag exports are treated fairly.
    But my question has to do today with growing wheat exports. 
Because as you all know, Kansas is the wheat State. We are 
usually the number one producer of wheat in the country, 
accounting for almost one-fifth of the country's production. In 
fact, as we speak, farmers across Kansas are hard at work 
harvesting this year's wheat crop.
    Historically, almost 50 percent of the wheat grown in 
Kansas is exported. Kansas farmers have been shipping wheat to 
Central America, Sub-Saharan Africa, and the Middle East for 
decades. However, this year, wheat exports are expected to hit 
a historic low, a 40-year low, in fact, and profitability is on 
the decline. As a result, planted wheat acres in Kansas are at 
their third lowest level since World War I.
    So my question, maybe for Mr. Paap. With wheat as one of 
the most trade-dependent crops we grow in the United States, 
what can we be doing on the trade front to help increase 
profitability of our wheat and raise the price of wheat for our 
Kansas farmers?
    Mr. PAAP. Well, certainly wheat is dependent on those 
exports. Our U.S. wheat producers, they are under pressure. 
Exports are under pressure. Competition, but also the higher 
dollar is a concern. Provisions in the trade agreements that 
lower tariffs such as TPP will hopefully increase the 
opportunities for even more wheat exports. Wheat is expected to 
make gains in sales to Vietnam and maintain our position as the 
number one source of wheat in Japan. Better tariff treatment 
will certainly make the U.S. more competitive with the 
Australian wheat.
    So certainly we recognize that, we understand the 
importance of export to wheat and the other markets, and the 
way we do that is with rules-based trading and opening those 
opportunities.
    Ms. JENKINS. Thank you, Mr. Chairman. I will yield back.
    Chairman REICHERT. Mrs. Noem.
    Mrs. NOEM. Thank you, Mr. Chairman. Thank you for holding 
this hearing today.
    I am a South Dakota farmer and rancher, so it is what I 
have done my entire life. After my dad was killed in a farm 
accident at the age of 49, I spent almost 20 years farming with 
my two brothers and my sister in a partnership. So this is an 
important issue for me, and I recognize that 95 percent of the 
world's consumers are outside the United States. So it would be 
foolish for us to sit here and say we don't need trade 
agreements.
    And that is really what frustrates me too about the fact 
that this has somehow in this Presidential election become 
controversial. Everybody that has to make a decision on what we 
are going to eat tomorrow morning should want us to have trade 
agreements.
    For me, when I look at food supply, it is a national 
security issue. I don't want one or two large corporations or 
another country growing our food for us because then they 
control us. That is why we have a farm bill, and I served on 
the Ag Committee that put together the last farm bill to make 
sure we had good policy that protected this volatile industry 
that needs protecting to make sure we have thousands and 
thousands of farmers out there growing our food supply, and 
then moved over to the Ways and Means Committee because the 
next two big issues that are threatening the agriculture 
industry is trade and tax policy.
    And so that is why we are here today. In South Dakota in 
2013, 41 percent of our crops were exported. So it is 
critically important, and I think it is pretty consistent from 
State to State.
    But what frustrates me is this has somehow become a 
political issue, and I don't really understand that. People say 
we have lost jobs in this country due to trade. People say we 
have gained jobs.
    What we need to do is look at this and view it as to what 
kind of opportunities are in front of us. And you come to this 
committee today and you tell us you guys need to work harder to 
educate Members of Congress to get them on board, keep your 
powder dry through the tough political environment, this is 
something that we need and it is very important to agriculture. 
And I know that it is.
    And every time I go home to South Dakota and talk to people 
or talk to other Members, I tell them how important trade 
agreements are in TPP. And I have traveled all over in those 
countries talking about the trade agreements, how we need them 
to be fair in a level playing field. So I am heavily invested 
in this.
    Supposedly, the President is, but I haven't seen him 
working Congress like he should. And if he wants this trade 
agreement to be done, he needs to engage more.
    But what I am going to ask you is, what are you doing as 
organizations to promote these trade agreements? Because it has 
to be all hands on deck to really take advantage of these 
opportunities. So I am working, I am traveling to spread the 
message, I am fighting for a fair agreement that is good for 
South Dakota agriculture, but also American agriculture, to 
take hold of this opportunity.
    But could each of you speak to what you are doing as 
organizations to make sure that Members of Congress vote on 
this bill, first of all, and get it passed so that we have 
these opportunities that we can grab.
    Listen, any community that you are doing business in is a 
friendlier community. So where do we need friendly communities? 
Asia would be a good place to start. If we don't grab this 
market, China will. And so we want to be there, we want to 
trade with them, create a friendlier environment so that we 
control the narrative there.
    And I am just curious as to your organizations that you are 
a part of, what are you doing to motivate people at the grocery 
store, at church, at the gas station, or even other Members of 
Congress to how important these trade agreements are to their 
food supply.
    Mr. MOONEY. First of all, I would say it is very insightful 
comments about the security of this country. I also believe it 
has everything to do with food.
    One of the things that we are doing in the dairy industry 
is we are building new plants. And when you look at the 
economic driver, you look at the multiplier effect. These 
communities, these small communities, one in Garden City, 
Kansas, we are spending $500 million on a new plant there, and 
we are going out and talking about the multiplier effect of 
what those farms generate, and taking that to town, taking it 
to Kansas City. That message is getting out there.
    And I think if we are going to change the attitude of 
people in Congress that don't understand agriculture, it has 
got to be talking about a trade agreement that is really about 
labor. It is not necessarily about trade. It is about labor. It 
is about putting people to work.
    Mrs. NOEM. Good.
    Mr. PAAP. From a Farm Bureau perspective, not only are we 
doing what we can here nationally, here in Washington, D.C., or 
in our 50 States and Puerto Rico on a State-wide level, but 
probably most important with Farm Bureau being a grassroots 
organization is those 2,800 county or parish farm bureaus. The 
78 county farm bureaus we have got in Minnesota are working 
with our members, talking with our members, and finding out 
exactly what these trade agreements are and they are not, 
whether it is with their elected officials in the----
    Mrs. NOEM. But, you have got parishes and you have got Farm 
Bureau entities in districts where maybe their representative 
is not supportive of TPP. Are you motivating them to be 
educating their Member of Congress?
    Mr. PAAP. What we are doing is we are trying not to educate 
as much as we are trying to engage. We are engaging them and 
doing a lot of listening, because what we are hearing is, well, 
I have heard this in it or it is going to do that. And what we 
are doing is we are having those conversations, listening to 
their concerns, and then getting those answers, helping put the 
right people, whether it be USTR, USDA, to help answer those 
questions, to say, well, I heard this is in it. It is not in 
it. It is available. And that is having those conversations.
    And you are exactly right, Congresswoman, we are fortunate 
to have members in areas that are not a lot of agriculture, but 
it is still part of this country and part of Minnesota. So 
having that engagement, those conversations to find out what 
are the myths, what are the misconceptions, and address those.
    Mrs. NOEM. Mr. Weber, let me give you 10, 15 seconds. I am 
out of time, if the chairman will allow.
    Chairman REICHERT. Yes.
    Mrs. NOEM. You look like you want to say something.
    Mr. WEBER. Yeah. I will make just a couple brief comments. 
I think NPPC has been engaged since day 1 in TPP. Obviously, it 
was an extremely difficult summer with the candidates, whatever 
you want to call it, the rhetoric that is used against trade. 
And certainly it is our hope that that will quiet down and 
people will come to their senses on trade.
    But we have always been a pro-trade organization. It is not 
hard to go out in the country and talk to our personal pork 
producers and our constituents about the importance of trade to 
our organization, to our industry.
    And believe me, we will be engaged. We are starting to gear 
that up right now. We think it is time to engage, not only 
perhaps the individual candidates that are running for 
President, but to be involved on demonstrating the importance 
of free trade to the whole ag sector, not just pork producers, 
but to the whole ag sector.
    So believe me, our organization, I think, stands second to 
none on being engaged on trade.
    Mrs. NOEM. Thank you.
    Mr. Chairman, yield back.
    Chairman REICHERT. Thank you, Mrs. Noem.
    I thank the witnesses for being here today. Thank you for 
your testimony. Thank you for being patient with the questions.
    We all, as you might have picked up from the conversation, 
on both sides of the aisle recognize the importance of trade. 
We recognize the importance of, look, we are in a global 
economy, right? We are not going to wind that clock backwards. 
So what is the answer to that?
    And I think Mr. Kelly was very eloquent in his passionate 
words saying, look, if we are going to be in this global 
economy--and we are--we have to lead. We have to set the high 
standard. We have to define what a global economy looks like. 
When America does that, the rest of the world will follow us 
and will be a part of that high standard fair trade agreement.
    In Washington State, as my two Washington friends know, we 
are the most trade-dependent State in the country. Forty 
percent of our jobs are directly related to trade. So one of 
the things that we have recognized in Washington State, it may 
not be so obvious in other parts of the country, is that trade 
jobs pay more. So if we want to talk about raising the minimum 
wage, one of the ways to do that is to trade with the rest of 
the world because they pay 15 to 20 percent higher wages.
    Trading with the rest of the world, of course, is a good 
thing because we all want to buy American. We make American, 
grow American. We all want to buy American. But we want to sell 
American also. And, as we have learned today, we can't sell all 
of American products, grown or made, in the United States. 
Because why? It is only 5 percent of the market. The other 95 
percent of the market that you want to sell to is the rest of 
the world. We want the rest of the world to buy American 
products, not Chinese products.
    So that is, simply put, the benefits of trade. However, we 
do have a lot of work to do, and there are some issues that we 
want to resolve. We want to make sure, as the bottom line, I 
think, statement for all of us is, we want to make sure that 
this works for the American people, that this creates jobs here 
at home, protects jobs here at home, and most of all then, 
creates jobs here at home for our younger generation.
    As Mr. Rangel so aptly described, education and technology 
and science is really where we need to prepare our young people 
in looking forward to this new global trade environment that we 
are going to be leading in, in the future.
    I have to say, as a part of my closing, I think that you 
have given us all a lot to think about. And please be advised 
that members will have 2 weeks to submit written questions to 
be answered later in writing. Those questions and your answers 
will be made part of the formal hearing record. Our record will 
remain open until June 28. And I urge interested parties to 
submit statements to inform the committee's consideration of 
the issues discussed today.
    Chairman REICHERT. With that, this committee stands 
adjourned.
    [Whereupon, at 11:54 a.m., the subcommittee was adjourned.]
    [Submissions for the record follow:]
    
    
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