[Congressional Record Volume 143, Number 8 (Tuesday, January 28, 1997)]
[Senate]
[Pages S749-S752]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DASCHLE (for himself and Mr. Grassley):

  S. 219. A bill to amend the Trade Act of 1974 to establish procedures 
for identifying countries that deny market access for value-added 
agricultural products of the United States; to the Committee on 
Finance.


      Value-added Agricultural Products Market Access Act of 1997

  Mr. DASCHLE. Mr. President, I am pleased to introduce today with my 
distinguished colleague, Senator Grassley, two important pieces of 
international trade legislation. These bills are designed with one very 
simple, clear goal in mind: to secure fair trade opportunities for 
America's highly competitive producers of agricultural products.
  There is no more important sector of the U.S. economy than 
agriculture as far as international trade is concerned. Last year, the 
trade surplus in agricultural products reached $28.5 billion, the 
largest of any industry, including aircraft. This surplus offset to an 
important degree the Nation's large and persistent deficit in 
manufactured goods.
  Trade is vitally important to farmers. Production from more than one-
third of harvested acreage is exported. Agricultural exports are 
important to the rest of the economy as well. According to the U.S. 
Department of Agriculture, each dollar generated by agricultural 
exports stimulates another $1.39 in supporting economic activity to 
produce those exports. Nearly every State exports farm products.
  Despite the obvious success American producers are enjoying in world 
markets, a closer look reveals that we could be doing far better. 
Judging from the annual surveys compiled by the Office of the U.S. 
Trade Representative, roughly half of all foreign trade barriers facing 
U.S. products are in the agricultural sector. This suggests that our 
overall merchandise trade deficit, which is estimated to total nearly 
$170 billion for 1996, could be considerably lower if we succeeded in 
removing more of these barriers.
  The recent Uruguay round took only the first, tentative steps toward 
devising effective and fair rules governing international agricultural 
trade. As our able negotiators would be the first to acknowledge, we 
have a long way to go. Although we made significant progress in 
subjecting export subsidies to international rules, the Uruguay round 
secured only modest commitments by governments to open their markets 
and administer food health and safety standards fairly. In the long 
run, the fairness of world trade in agricultural products will depend 
on how aggressively and systematically the U.S. Government insists on 
compliance by foreign governments with their existing commitments and 
presses them for new ones.
  The two bills we introduce today will improve our ability to meet 
this challenge both institutionally and with respect to one specific, 
immediate problem regarding the European Union. Passage of this 
legislation will help to assure farmers and their communities that 
trade liberalization remains in their interest as much in practice as 
in theory.


         the Value-Added Agricultural Market Access Act of 1997

  The first bill, the Value-Added Agricultural Market Access Act of 
1997, would improve our institutional capacity to set priorities among 
the vast array of foreign agricultural trade barriers we face and give 
those priorities the high-level attention they deserve within the 
executive branch. In so doing, it would provide our negotiators with an 
important new tool with which to increase their leverage in 
consultations with foreign governments.
  The bill would create a ``Special 301'' procedure for value-added 
agricultural products virtually identical to that which currently 
exists for intellectual property products. It would require the U.S. 
Trade Representative [USTR] each year to designate as ``priority 
countries'' those trading partners having the most onerous or egregious 
acts, policies, or practices resulting in the greatest adverse impact--
actual or potential--on U.S. value-added agricultural products.

[[Page S750]]

  The USTR would be required to initiate a section 301 investigation 
within 30 days after the identification of a priority foreign country 
with respect to any act, policy, or practice that was the basis of the 
identification, unless the USTR determines initiation of the 
investigation would be detrimental to U.S. economic interests and 
reports the reasons in detail to Congress. The procedural and other 
requirements of section 301 authority would generally apply to these 
cases with the important exception that investigations, and 
negotiations must be concluded and determinations made on whether the 
measures are actionable within 6 months, as opposed to 12 or 18 months 
for conventional section 301 cases. This 6-month deadline may be 
extended to 9 months if certain criteria are met. USTR may choose not 
to designate a country as a priority foreign country if it is entering 
into good faith negotiations or making significant progress in 
bilateral or multilateral negotiations to provide fair and equitable 
access to its markets.
  According to the Congressional Research Service, agriculture as a 
whole is the largest positive contributor to the U.S. trade balance, 
and exports of value-added products--intermediate products such as 
wheat flour, feedstuffs, and vegetable oils or consumer-ready products 
such as meats--have recently become the largest component of our 
agricultural trade. In fiscal year 1996, these higher value exports 
accounted for $32 billion, or 54 percent by value, of all such exports.
  It is no wonder that U.S. value-added agriculture is making such 
gains. Our farmers have worked hard to increase their value-added 
production, and they should be proud of what they have accomplished. 
Unfortunately, they are being denied the full fruits of their labors by 
a varied and complex array of market restrictions in many foreign 
countries. Notwithstanding the progress made in the Uruguay round, many 
foreign governments maintain considerably stricter limits on U.S. 
products than we do on theirs. In addition, even as formal barriers 
fall or become more transparent as a result of the Uruguay round, new 
and informal trade barriers often take their place. These may take the 
form of arbitrary sanitary and phytosanitary measures that ignore sound 
principles of science and globally accepted food safety and inspection 
standards.
  In the past few years alone, United States sausages have been denied 
entry to Korea because the Korean Government imposed arbitrary and 
unscientific shelf-life standards on imported sausages; the European 
Union has banned U.S. beef treated with natural hormones even though 
scientists from Europe and around the world have declared natural-
hormone-treated beef to be safe; and, high-value U.S. pork products 
cannot be exported to Europe because European meat inspectors require 
U.S. slaughter and packing plants to meet standards that even their own 
producers cannot meet.
  These are but a few examples of the barriers to entry facing U.S. 
producers of value-added farm products. The unfortunate result is that 
our farmers are being prevented from realizing their full export 
potential. The Foreign Agricultural Service estimates that U.S. 
agricultural exports are reduced by $4.7 billion annually due to 
unjustifiable sanitary and phytosanitary measures alone. Imagine the 
impact on farm income, rural communities, and the U.S. economy if these 
barriers were removed.
  The Value-Added Agricultural Market Access Act of 1997 will bring 
added focus to this set of issues within the trade policymaking 
machinery of the U.S. Government. We have a strong inter-agency team of 
trade negotiators and analysts; over the years, through Democratic and 
Republican administrations alike, it has been one of the most efficient 
operations anywhere in the Federal Government. However, the USTR and 
its support agencies confront an almost overwhelming variety of demands 
and challenges. They currently are deeply involved in several very 
ambitious multilateral trade negotiations or preparations for them, 
including free trade arrangements in the Western Hemisphere and the 
Pacific rim, NAFTA expansion, and WTO agreements on high-technology 
products and telecommunications equipment and services.
  The sheer number and complexity of the issues confronting the USTR 
make priority-setting one of USTR's most important responsibilities. 
With so much attention now on visionary multilateral initiatives, we 
must take care not to lose sight of two other practical aspects of 
trade policy: our bilateral efforts to improve market access and our 
responsibility to ensure that governments comply with the agreements 
they have already signed with us, be they multilateral or bilateral. 
These two aspects of U.S. trade policy are particularly important to 
the agricultural community, which, as I have emphasized, is second to 
none in terms of our international commercial prospects.
  As my colleague, Senator Grassley, the distinguished chairman of the 
Finance Subcommittee on International Trade, knows well, Congress holds 
a major share of the responsibility, indeed prerogative, for setting 
U.S. trade policy. It is explicitly assigned that power under article 
I, section 8 of the U.S. Constitution. Our bill would exercise this 
authority to institutionalize an appropriate degree of attention on 
agriculture in U.S. trade policy.
  U.S. agriculture traditionally has been one of the strongest of any 
segment of the economy in its support for multilateral trade 
liberalization, including the negotiation of free trade agreements. 
Yet, in talking to individual farmers in my State as well as their 
national representatives, I have the impression that the strength of 
American agriculture's future support for such initiatives will hinge 
on how well our Government performs in these areas of our bilateral 
trade relations. Indeed, I believe that adroit use by the USTR of the 
procedures established by this bill would enhance our chance of 
achieving new multilateral rules for agriculture in the next 
negotiating round of the World Trade Organization in the same way that 
creation of ``Special 301'' by Congress in 1988 created leverage and 
momentum for our negotiators in the run-up to the adoption of 
intellectual property rules in the Uruguay round.


            Fair Trade in Meat and Meat Products Act of 1997

  The second bill we are introducing today addresses one specific, 
egregious barrier to U.S. value-added agricultural exports: the 
European Union's [EU] continuing refusal to implement a commitment it 
made in 1992 to treat our food safety and inspection standards as 
roughly equivalent in effectiveness to their own. This procedural form 
of protectionism has shut American exports of pork and beef out of the 
European market. The loss of this lucrative market has contributed to 
the severe drop in cattle prices in this country and deprived American 
pork producers of an estimated $60 million in sales last year. By any 
objective standard, U.S. meat products are among the most competitive 
in the world and represent one of the most promising areas of growth 
for American trade.
  On November 1, 1990, the European Union prohibited imports of U.S. 
pork and beef on the grounds that our products did not comply with the 
safety and inspection requirements of the EU's Third Country Meat 
Directive [TCD]. The prohibition was imposed despite the fact that the 
requirements of the TCD are largely similar to those already mandated 
by the U.S. Department of Agriculture. As a result, American pork and 
beef exports to the European Union virtually ceased.
  Following this action, the industry filed and the Bush administration 
accepted a petition under section 301 of the 1974 Trade Act. After USTR 
concluded preliminarily that the EU's administration of the TCD imposed 
a burden and restriction on U.S. commerce, the EU agreed to resolve the 
dispute in an exchange of letters that came to be known as the 1992 
Meat Agreement. At the time, U.S. Trade Representative Carla Hills 
noted that the practices of the European Union would have been 
actionable under section 301 absent the 1992 agreement and would become 
so again if the European Union violated its terms. Overwhelming 
evidence now indicates that the European Union has done just that.
  The 1992 Meat Agreement outlined a specific series of steps that 
American producers could take to become eligible for export to the 
European Union,

[[Page S751]]

and concluded that the inspection systems of the United States and 
European Union provided ``equivalent safeguards against public health 
risks.'' The GATT Agreement on Sanitary and Phytosanitary Measures 
corroborated this finding and required the European Union to treat USDA 
inspection requirements as equivalent to its own.
  Five years later, after millions of dollars in investment by American 
producers to meet the terms of the 1992 Meat Agreement, only a handful 
of American plants have been recertified for export to the European 
Union. Plants managers report that inspections for certification have 
not been conducted in an objective or transparent manner, and the 
European Union has failed to acknowledge changes enacted specifically 
at its request. The cost of this unjustified action has been millions 
of dollars in lost sales to American pork and beef producers.
  The administration has been more than patient with the European 
Union, consulting with its diplomats for many months. In my view, the 
time for waiting has ended. The European Union must tear down its walls 
and give our farmers and ranchers the level playing field they were 
promised. Indeed, in just the last few weeks, the European Union has 
been considering yet another change in animal product approval 
procedures that would block an additional $1 billion in agricultural 
exports to the European Union. This action was taken despite the fact 
that the United States has been working in good faith for over 2 years 
on a veterinary equivalence agreement that would accommodate European 
Union concerns. Simply put, it is time to send the European Union a 
clear message that we will not stand by while they ignore their 
obligations.

  For this reason, Senator Grassley and I are introducing legislation 
to require the USTR to determine formally whether the European Union 
has violated its international obligations, seek prompt initiation of 
the relevant international dispute settlement proceedings, and review 
our certification of their meat exporting facilities. This is a 
straightforward response to a blatant breach of faith on the part of 
the European Union. The bill sends a clear message that trade is a two-
way street, and procedural protectionism is every bit as unacceptable 
as traditional market barriers like discriminatory quotas and tariffs.
  Mr. President, we have consulted with the USTR and Department of 
Agriculture as we have drafted the legislation, and I am pleased to 
inform my colleagues that the administration is fast coming to an 
appreciation of the need for the type of action prescribed by the bill. 
Last week, it notified the European Union via telex that, absent a 
resolution of this issue, as of April 1, 1997, all European Union meat 
and meat product exports will have to ``specifically adhere to and meet 
U.S. regulatory standards.'' Moreover, ``Any plant in the member states 
of the European Unionropean Union which desires to ship meat, meat 
products, poultry, or poultry products to the United States will have 
to be inspected by officials of the Food Safety and Inspection Service 
of the U.S. Department of Agriculture and be certified before it is 
eligible to ship to market.''
  I am pleased that the administration is headed in the direction 
prescribed by our bill. I call on my colleagues to support this 
legislation as well as the value-added agricultural products market 
access bill as a way to reinforce our Government's emerging stance on 
this immediate problem and ensure that similar problems in the future 
receive the serious and timely attention they deserve.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 219

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Value-added Agricultural 
     Products Market Access Act of 1997''.

     SEC. 2. FINDINGS; PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) The export of value-added agricultural products is of 
     vital importance to the economy of the United States.
       (2) In 1995, agriculture was the largest positive 
     contributor to the United States merchandise trade balance 
     with a trade surplus of $25,800,000,000.
       (3) The growth of United States value-added agricultural 
     exports should continue to be an important factor in 
     improving the United States merchandise trade balance.
       (4) Increasing the volume of value-added agricultural 
     exports will increase farm income in the United States, 
     thereby protecting family farms and contributing to the 
     economic well-being of rural communities in the United 
     States.
       (5) Although the United States efficiently produces high-
     quality value-added agricultural products, United States 
     producers cannot realize their full export potential because 
     many foreign countries deny fair and equitable market access 
     to United States agricultural products.
       (6) The Foreign Agricultural Service estimates that United 
     States agricultural exports are reduced by $4,700,000,000 
     annually due to unjustifiable imposition of sanitary and 
     phytosanitary measures that deny or limit market access to 
     United States products.
       (7) The denial of fair and equitable market access for 
     United States value-added agricultural products impedes the 
     ability of United States farmers to export their products, 
     thereby harming the economic interests of the United States.
       (b) Purposes.--The purposes of this Act are--
       (1) to reduce or eliminate foreign unfair trade practices 
     and to remove constraints on fair and open trade in value-
     added agricultural products;
       (2) to ensure fair and equitable market access for exports 
     of United States value-added agricultural products; and
       (3) to promote free and fair trade in value-added 
     agricultural products.

     SEC. 3. IDENTIFICATION OF COUNTRIES THAT DENY MARKET ACCESS.

       (a) Identification Required.--Chapter 8 of title I of the 
     Trade Act of 1974 is amended by adding at the end the 
     following:

     ``SEC. 183. IDENTIFICATION OF COUNTRIES THAT DENY MARKET 
                   ACCESS FOR VALUE-ADDED AGRICULTURAL PRODUCTS.

       ``(a) In General.--Not later than the date that is 30 days 
     after the date on which the annual report is required to be 
     submitted to Congressional committees under section 181(b), 
     the United States Trade Representative (hereafter in this 
     section referred to as the `Trade Representative') shall 
     identify--
       ``(1) those foreign countries that--
       ``(A) deny fair and equitable market access to United 
     States value-added agricultural products, or
       ``(B) apply standards for the importation of value-added 
     agricultural products from the United States that are not 
     related to public health concerns or cannot be substantiated 
     by reliable analytical methods; and
       ``(2) those foreign countries identified under paragraph 
     (1) that are determined by the Trade Representative to be 
     priority foreign countries.
       ``(b) Special Rules for Identifications.--
       ``(1) Criteria.--In identifying priority foreign countries 
     under subsection (a)(2), the Trade Representative shall only 
     identify those foreign countries--
       ``(A) that engage in or have the most onerous or egregious 
     acts, policies, or practices that deny fair and equitable 
     market access to United States value-added agricultural 
     products,
       ``(B) whose acts, policies, or practices described in 
     subparagraph (A) have the greatest adverse impact (actual or 
     potential) on the relevant United States products, and
       ``(C) that are not--
       ``(i) entering into good faith negotiations, or
       ``(ii) making significant progress in bilateral or 
     multilateral negotiations,

     to provide fair and equitable market access to United States 
     value-added agricultural products.
       ``(2) Consultation and consideration requirements.--In 
     identifying priority foreign countries under subsection 
     (a)(2), the Trade Representative shall--
       ``(A) consult with the Secretary of Agriculture and other 
     appropriate officers of the Federal Government, and
       ``(B) take into account information from such sources as 
     may be available to the Trade Representative and such 
     information as may be submitted to the Trade Representative 
     by interested persons, including information contained in 
     reports submitted under section 181(b) and petitions 
     submitted under section 302.
       ``(3) Factual basis requirement.--The Trade Representative 
     may identify a foreign country under subsection (a)(1) only 
     if the Trade Representative finds that there is a factual 
     basis for the denial of fair and equitable market access as a 
     result of the violation of international law or agreement, or 
     the existence of barriers, referred to in subsection (d)(3).
       ``(4) Consideration of historical factors.--In identifying 
     foreign countries under paragraphs (1) and (2) of subsection 
     (a), the Trade Representative shall take into account--
       ``(A) the history of value-added agricultural trade 
     relations with the foreign country, including any previous 
     identification under subsection (a)(2), and
       ``(B) the history of efforts of the United States, and the 
     response of the foreign country, to achieve fair and 
     equitable market access for United States value-added 
     agricultural products.

[[Page S752]]

       ``(c) Revocations and Additional Identifications.--
       ``(1) Authority to act at any time.--If information 
     available to the Trade Representative indicates that such 
     action is appropriate, the Trade Representative may at any 
     time--
       ``(A) revoke the identification of any foreign country as a 
     priority foreign country under this section, or
       ``(B) identify any foreign country as a priority foreign 
     country under this section.
       ``(2) Revocation reports.--The Trade Representative shall 
     include in the semiannual report submitted to the Congress 
     under section 309(3) a detailed explanation of the reasons 
     for the revocation under paragraph (1) of the identification 
     of any foreign country as a priority foreign country under 
     this section.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Value-added agricultural product.--The term `value-
     added agricultural product' means a product that has 
     traditionally been considered by the Secretary of Agriculture 
     as being a value-added product within the scope of section 
     303 of the Agricultural Trade Act of 1978 (7 U.S.C. 5653).
       ``(2) Fair and equitable market access.--A foreign country 
     denies fair and equitable market access if the foreign 
     country effectively denies access to a market for a product 
     through the use of laws, procedures, practices, or 
     regulations which--
       ``(A) violate provisions of international law or 
     international agreements to which both the United States and 
     the foreign country are parties, or
       ``(B) constitute discriminatory nontariff trade barriers.
       ``(e) Publication.--The Trade Representative shall publish 
     in the Federal Register a list of foreign countries 
     identified under subsection (a) and shall make such revisions 
     to the list as may be required by reason of the action under 
     subsection (c).
       ``(f) Annual Report.--The Trade Representative shall, not 
     later than the date by which countries are identified under 
     subsection (a), transmit to the Committee on Ways and Means 
     and the Committee on Agriculture of the House of 
     Representatives and the Committee on Finance and the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate, a report on the actions taken under this section 
     during the 12 months preceding such report, and the reasons 
     for such actions, including a description of progress made in 
     achieving fair and equitable market access for United States 
     value-added agricultural products.''.
       (b) Clerical Amendment.--The table of contents for the 
     Trade Act of 1974 is amended by inserting after the item 
     relating to section 182 the following:

``Sec. 183. Identification of countries that deny market access for 
              value-added agricultural products.''.

     SEC. 4. INVESTIGATIONS.

       (a) Investigation Required.--Subparagraph (A) of section 
     302(b)(2) of the Trade Act of 1974 (19 U.S.C. 2412(b)(2)) is 
     amended by inserting ``or 183(a)(2)'' after ``section 
     182(a)(2)'' in the matter preceding clause (i).
       (b) Conforming Amendment.--Subparagraph (D) of section 
     302(b)(2) of such Act is amended by inserting ``concerning 
     intellectual property rights that is'' after ``any 
     investigation''.

     SEC. 5. AUTHORIZED ACTIONS BY UNITED STATES TRADE 
                   REPRESENTATIVE.

       Section 301(c)(1) of the Trade Act of 1974 (19 U.S.C. 
     2411(c)(1)) is amended--
       (1) by striking ``or'' at the end of subparagraph (C);
       (2) by striking the period at the end of subparagraph 
     (D)(iii)(II) and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(E) with respect to an investigation of a country 
     identified under section 183(a)(1), to request that the 
     Secretary of Agriculture (who, upon receipt of such a 
     request, shall) direct the Food Safety and Inspection Service 
     of the Department of Agriculture to review certifications for 
     the facilities of such country that export meat and other 
     agricultural products to the United States.''.
                                 ______