[Congressional Record Volume 145, Number 128 (Tuesday, September 28, 1999)]
[Senate]
[Page S11567]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS (for himself, Mr. Gorton, and Mr. Bingaman):
  S. 1648. A bill to amend the Agricultural Trade Act of 1978 to 
require the Secretary of Agriculture to take certain actions if the 
European Union does not reduce and subsequently eliminate agricultural 
export subsidies; to the Committee on Agriculture, Nutrition, and 
Forestry.


                   AGRICULTURE FAIR TRADE ACT OF 1999

  Mr. BAUCUS. Mr. President, I rise to introduce the Agriculture Fair 
Trade Act of 1999. I am joined by Senator Gorton of Washington and 
Senator Bingaman of New Mexico.
  I begin by saying I believe the next round of the WTO is vital to 
American farmers. As a Senator who represents Montana, a State whose 
primary industry is agriculture, this next round will decide the fate 
of our next generation of producers. It is that simple.
  It is becoming increasingly clear that while the rest of the Nation 
continues to experience astounding economic growth and prosperity 
through open and global trade, America's farmers and ranchers across 
the Nation are suffering, and they have yet to reap the fruits of free 
trade's bounty.
  During the last several months, we have worked to identify goals for 
agriculture in the next round of the WTO. The consensus is that we must 
step up our efforts dramatically in order to make genuine progress in 
leveling the playing field for our agriculture industry.
  It is our intention that this bill will begin this process. The 
Agriculture Fair Trade Act provides a mechanism through which we can 
target unfair export subsidies and fight for their total elimination by 
January 1, 2003.
  It is our hope that such legislation will provide an incentive for 
our trading partners to voluntarily reduce their export subsidies 
during the next round of the WTO. The elimination of these subsidies 
will benefit farmers on both sides of the Atlantic.
  I believe this act provides a powerful two-tier trigger approach to 
the reduction of export subsidies.
  First, the European Union must reduce its agriculture export 
subsidies by 50 percent by January 1, 2002. If the EU fails to do so, 
the U.S. Agriculture Secretary shall take appropriate measures to 
protect the interests of American agricultural producers and ensure the 
international competitiveness of U.S. agriculture.
  In particular, the Secretary shall be authorized to target EU's most 
sensitive export market for grains and spend over $1 billion in Export 
Enhancement Program funding in that market.
  Step 2 requires the EU to enter into an agreement with the United 
States by January 1, 2003. The EU must agree to completely eliminate 
its export subsidies, and if not, the U.S. Secretary of Agriculture 
shall be authorized to, again, target EU's most sensitive export market 
for grain, double the Export Enhancement Program to $2 billion, and 
increase and utilize export funding for market promotion and direct ag 
export credit sales in the best interest of American ag producers.
  It is high time the Senate takes action to ensure that the next round 
of negotiations result in benefits to our agricultural producers.
  Why target EU export subsidies? I believe the United States has taken 
the high road in leading by example. That lead hurts U.S. producers. 
The United States has long taken the position that if we reduce support 
for agriculture, especially export subsidies, we will get a fair 
trading system.
  That is not the case across the Atlantic, where the EU export 
subsidies are 60 times greater than export subsidies in the United 
States. In fact, the EU accounts for nearly 85 percent of the world's 
agricultural export subsidies.
  I can remember in the 1980s when the U.S. and EU engaged in an 
``export subsidy war.'' At the same time, they both battled to undercut 
each other's prices in the world's wheat export markets. But over the 
decade, U.S. market share declined while EU market share increased 
dramatically.
  Europe, formerly the world's largest net importer, suddenly became 
the world's largest net exporter of agricultural products. It had 
nothing to do with luck. It had everything to do with their aggressive 
use of export subsidies.
  How did the United States fight back? We didn't. To date, the United 
States maintains an anemic Export Enhancement Program. Authorized at 
$500 million a year, EEP operates well below its Uruguay Round 
reduction commitments. If EEP is to be a credible tool in international 
trade, it is high time we start flexing its muscle.
  The United States will remain the most open market in the world. I am 
committed to that. At the same time, we must do everything possible to 
open foreign markets. A ``trigger'' is the first step--it has 
leverage--but one that must be taken as a very large stride in the path 
toward free trade.
  Again, I thank Senators Gorton and Bingaman for cosponsoring this 
legislation. I urge my colleagues vested in the future of American 
agriculture to join us in this endeavor.
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