[Congressional Record (Bound Edition), Volume 145 (1999), Part 20]
[Senate]
[Pages 28954-28957]
[From the U.S. Government Publishing Office, www.gpo.gov]



                     THE UPCOMING WTO TRADE SUMMIT

  Mr. DORGAN. Mr. President, I am pleased to come to the floor today 
along with my colleague from Idaho, Senator Craig, to discuss 
objectives we have for the upcoming WTO trade summit in Seattle, WA. We 
want that trade summit, the initiation of a new round of trade talks, 
to be as productive as possible for this country and especially for 
this country's family farmers and ranchers.
  In recent years, we have seen the results of our trade negotiators 
negotiating trade agreements in secret around the globe and developing 
the conditions under which we trade goods and services. Family farmers 
and ranchers largely have discovered they have been given short shrift 
and not treated very well. In fact, their remedies to attempt to 
confront unfair trade arrangements were taken away. They discovered 
that in many cases the competition they face in the marketplace for 
agricultural goods was unfair competition. They discovered foreign 
markets were still closed to them, with little promise of them being 
opened.
  We decide this time that the round of trade talks that will begin 
with the WTO in Seattle would be different. So Senator Craig and I 
convened a caucus, the WTO Trade Caucus for Farmers and Ranchers. We 
called our colleagues in the House, Congressman Simpson and Congressman 
Pomeroy, and, with the four of us as cochairs, created an organization 
in Congress that has nearly 50 Senators and Congressmen, to try to 
establish, a set of objectives that will be helpful to family farm 
interests in this country for our trade ambassador and our trade 
negotiators to follow.
  Mind you, we are not simply focusing on the issue of family farmers. 
We want our trade talks to be fruitful to our country and our economy 
as a whole. But we believe very strongly, representing rural States, 
that family farmers have been hurt by recent trade agreements and that 
ought not be the case. Trade arrangements and trade negotiations ought 
to help our producers, not hurt them. So our caucus--again, nearly 50 
Senators and Congressmen strong--Republicans and Democrats working 
together, established a set of objectives. Those objectives we have 
used in meetings with the trade ambassador and with the Secretary of 
Agriculture and others, and many of us will in fact go to Seattle the 
first week of December and be present at the initiation of these trade 
talks, trying to press the case that this time family farmers and 
ranchers across this country must not be given short shrift in the 
trade talks.
  I would like to go through a couple of charts that describe the 
seriousness of the situation we want to confront with this trade 
agenda. Here is a chart that shows what has happened to our trade 
deficit. We are beginning a new round of trade talks at a time our 
trade deficit is going through the roof, $25 billion in a month in 
trade deficits. That is very serious. That is the highest trade deficit 
anywhere in history, by any country, any place, any time.

[[Page 28955]]

  What is happening with imports and exports? This chart shows that 
imports keep going up, up, and up, while exports are basically a flat 
line. That is, of course, what is causing our trade imbalance.
  Just on agricultural trade alone, in the last couple of years, we 
have had a very healthy surplus in agricultural trade that has shrunk, 
and shrunk, and shrunk some more. This is a chart that spells out the 
difficulties family farmers now face--the rather anemic ability to 
export to other countries. We are not exporting as much as we used to, 
and there is a substantial amount of increased imports in food products 
from abroad.
  Finally, let me take it from the general to the specific, to say one 
of the burrs under my saddle has always been the trade with Canada. It 
is fundamentally unfair. This chart shows what has happened with our 
agricultural trade balance with Canada. The United States-Canadian 
trade agreement and NAFTA turned a healthy trade surplus with Canada in 
agricultural commodities alone into a very sizable deficit. That is the 
wrong direction. In durum wheat, in the first 7 months of this year 
compared with the first 7 months of previous years, which themselves 
are an all-time record, you will see once again we continue a massive 
quantity of unfair trade coming in from Canada.
  I simply tell my colleagues this to explain that we have serious 
challenges in this trade round. The caucus that we have established 
created some objectives on behalf of farmers and ranchers, under the 
heading of Fair trade for agriculture at the WTO conference:
  Expand market access. Too many markets around the world are closed to 
American farmers and ranchers who want to compete. Expand access, 
eliminate export subsidies. Those are trade-distorting.
  The fact is, we are barraged with export subsidies in multiples of 
what we are able to do. We ought to eliminate export subsidies--the 
Europeans, especially, are guilty of massive quantities of export 
subsidies.
  Discipline state trading enterprises. These are sanctioned monopolies 
that would not be legal in our country. The Canadian Wheat Board, 
especially, engages in unfair trade.
  Improve market access for products of new biotechnology.
  Deny unilateral disarmament; that is, do not give up the tools to 
combat unfair trade; and do not give up the domestic tools to support 
family farmers.
  We have a substantial list on our agenda. Rather than go through all 
of this, I want to yield to the Senator from Idaho in a moment, but let 
me also say the Presiding Officer, the Senator from Wyoming, is also 
involved in this caucus, as are many others, Republicans and Democrats, 
working together for a common purpose, and that common purpose is to 
say: Farmers and ranchers around this country work hard, and they do 
their level best. They raise livestock and grain and they do a good 
job. They can compete anywhere, any time, under any condition, but they 
cannot compete successfully when the rules of trade are unfair.
  That, sadly, too often has been the case, and we intend this time in 
this WTO round to see that is no longer the case. We want these 
negotiations to bear fruit--bear grain, actually, now that I think 
about it, from my part of the country, but fruit for others. We want 
these negotiations to work for our family farmers and ranchers.
  Bipartisan work in Congress does not get very much attention because 
there is not much controversy attached to it, but there are many 
instances in which we work together across the aisle. This is one. A 
bipartisan group of 50 Members of the House and Senate are working 
together for a common objective: to improve conditions in rural America 
as a result of the upcoming WTO round of trade talks. I am very pleased 
to have been working with my colleague, Senator Craig, from the State 
of Idaho. I yield to the Senator from Idaho.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, I thank Senator Dorgan for outlining the 
intent of the effort underway by the Senator, myself, and 49 other 
colleagues. It was Senator Byron Dorgan who approached me on the idea 
of creating aWTO caucus to elevate the interests of agriculture in this 
up-and-coming round of the WTO planning session in Seattle in December.
  I thank him for that vision. It has been fun working with him as we 
have created what I think is--sometimes unique in the Congress--a 
bipartisan, bicameral effort where we are all standing together on a 
list of items and issues we know are key for American agriculture. The 
Senator has outlined those on which we came together in a consensus 
format that we think are critical, that we presented to our Trade 
ambassador and to our Secretary of Agriculture.
  Market access--we know how critically important that is; export 
subsidies and how they are used or used against us; State trading 
enterprises and their ability to mask the reality of subsidies from 
products that enter the marketplace in a nontransparent way; nontariff 
barriers that are used to block the movement we want to see in certain 
trade efforts.
  All of these are the issues we have presented and because of our 
effort collectively, we have caused the Secretary of Agriculture and 
the Trade ambassador to suggest that No. 1 on the agenda of America's 
negotiators at the WTO will be agricultural issues.
  Why are we concerned about it? Here is an example. Even after the 
Uruguay agreement which required tariff reductions of some 36 percent, 
the average bound agricultural tariff of WTO members is still 50 
percent. In contrast the average U.S. tariff on agricultural imports is 
less than 10 percent--50 percent versus 10 percent on the average. 
Those are the kinds of relationships we have to see brought into 
balance and corrected.
  The United States spends less than 2 percent, $122 million a year, of 
what the European Union spends on export subsidies. They spend $7 
billion a year, buying down the cost of their product to present it 
into a world market. In fact, the European Union accounts for 84 
percent of the total agricultural export subsidy worldwide. Subsidized 
foreign competition has contributed to the nearly 20-percent decline in 
U.S. agricultural exports, as Senator Dorgan so clearly pointed out on 
his charts a few moments ago. That dramatic reduction in the 
agricultural trade surplus from a $27 billion surplus for us in 1996 to 
just $11.5 billion this year says it very clearly. We have to do 
something on behalf of American agriculture to allow them a much fairer 
access to world markets.
  Those are the issues we think are so critical as we deal with our 
world traders in Seattle. Nontariff barriers have become the 
protectionist weapon of choice particularly for the products derived 
from new technologies, as Customs tariffs are lowered. U.S. negotiators 
should prevent our trading partners from making crops and other foods 
produced with genetically modified organisms into second-class food 
products. Yes, we have to do a better job of convincing the world of 
our tremendous scientific capability. At the same time, they cannot 
arbitrarily be used as a target for nontariff barriers, as will be 
argued or debated in Seattle.
  That is a collection of many of the issues with which we are going to 
be dealing. It is so important America recognizes the abundance of its 
agriculture and the unique situation we find ourselves in a world 
market today where we have had the privilege, through the productivity 
of America's farmers, to lead the world. We now do not lead when it 
comes to agricultural exports but we will search to cause it to happen, 
through the openness of the marketplace, through the fairness of 
competition we know American agriculture, given that opportunity, can 
offer.
  Again, I thank Senator Dorgan for his cooperativeness and the ability 
to work together with our colleagues Mike Simpson and Earl Pomeroy from 
the House and, as Senator Dorgan mentioned, the Senator from Wyoming 
who is presiding at this moment. All of these are tremendously 
important and critical issues for our home States and for America at 
large. The abundance, the productivity of American agriculture hangs in 
the balance. To the

[[Page 28956]]

consumer who walks in front of a supermarket shelf every day to see 
such phenomenal abundance, that in itself could decline if we are not 
allowed the world marketplace in which to sell the goods and services 
of American agriculture.
  Mr. President, I ask unanimous consent to print in the Record 
agricultural trade priorities for the WTO Conference.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     WTO Trade Caucus for Farmers and Ranchers--Agricultural Trade 
 Priorities for the WTO Ministerial Conference and New Round of Global 
                           Trade Negotiations


                             market access

       Expand market access through tariff reduction or 
     elimination.
       Negotiate zero-for-zero for appropriate sectors.
       Strive for reciprocal market access.
       Even after the Uruguay Round Agreement, which required 
     tariff reductions of 36 percent, the average bound 
     agriculture tariff of WTO members is still 50 percent. In 
     contrast, the average U.S. tariff on agriculture imports is 
     less than 10 percent.


                            export subsidies

       Eliminate all export subsidies.
       Reduce European Union (EU) subsidies to the level provided 
     by the United States before applying any formula reduction. 
     Negotiations must not leave the EU with an absolute subsidy 
     advantage.
       The United States spends less than 2 percent ($122 million) 
     of what the EU spends on export subsidies ($7 billion). In 
     fact, the EU accounts for 84 percent of total agriculture 
     export subsidies worldwide. Subsidized foreign competition 
     has contributed to the nearly 20 percent decline in U.S. 
     agriculture exports over the last three years, and the 
     dramatic reduction in the agriculture trade surplus, from $27 
     billion in 1996 to just $11.5 billion this year.


                       no unilateral disarmament

       Combat Unfair Trade.
       Restore and strengthen enforcement tools against unfair 
     trade practices.
       Improve enforcement of WTO dispute panel decisions, 
     accelerate the process, and make it more transparent.
       Support Family Farmers.
       Preserve the flexibility to assist family farmers through 
     income assistance, crop insurance and other programs that do 
     not distort trade.
       Retain the full complement of non-trade distorting export 
     tools including export credit guarantees, international food 
     assistance, and market development programs.


                       state trading enterprises

       Establish disciplines on STEs to make them as transparent 
     as the U.S. marketing system.
       Expose STEs to greater competition from in-country 
     importers and exporters.
       Eliminate the discriminatory pricing practices of STE 
     monopolies that amount to de facto export subsidies.
       Export STEs like the Canadian Wheat Board and the 
     Australian Wheat Board Ltd. control more than \1/3\ of world 
     wheat and wheat flour trade. Import STEs keep U.S. farmers 
     and exporters out of lucrative foreign markets.


                       non-tariff trade barriers

       Ensure that science and risk assessment principles 
     established by the Sanitary and Phytosanitary Accord during 
     the Uruguay Round are the basis of measures applied to 
     products of new technology and that this process be 
     transparent.
       Assume that regulatory measures applied to products of new 
     technologies do not constitute ``unnecessary regulatory 
     burdens.''
       Negotiate improved market access for products of new 
     technology, including bioengineered products.
       Non-tariff barriers have become the protectionist weapon of 
     choice, particularly for the products derived from new 
     technologies, as customs tariffs are lowered. U.S. 
     negotiators should prevent our trading partners from making 
     crops and other goods produced with genetically-modified 
     organisms into second-class food products that are the 
     subject of discrimination in foreign markets.

  Mr. CRAIG. I yield the floor.
  Mr. DORGAN. Mr. President, I ask unanimous consent to add 10 minutes 
to the discussion. I want to ask the Senator from Idaho a question.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I listened to the Senator from Idaho, and 
one of the points he made is important. A lot of people do not 
understand that following the conclusion of the latest round of trade 
talks, there remains a 50-percent tariff on average in other countries. 
To the extent we can get our agricultural commodities into those 
countries, there is a 50-percent tariff on those goods.
  In previous speeches I talked about eating American T-bone steaks in 
Japan and that there is a 40.5-percent tariff on every pound of beef 
going into Japan. That is actually a bit lower than the average tariff 
that is confronting our products going elsewhere in the world.
  I think anyone would conclude it is a failure if we had a 50-percent 
tariff onan agricultural commodity coming into this country, and yet 
our producers confront it all across the world. In fact, those are the 
cases when we can get products in. There are many circumstances where 
we will not get products into a market at all or, if we get some 
products in, we cannot get sufficient quantity; is that not correct?
  Mr. CRAIG. The Senator is absolutely correct. When we came out of the 
Uruguay Round, when the round was heralded to have significant 
improvements in overall tariff levels, the problem was that most 
tariffs in the world were very high and ours were very low.
  So we negotiated everybody down equally. We took a reduction in 
tariff. They, the European community, and others, took a reduction in 
tariff, which brought the average, other than the tariffs of the United 
States, down to 50 percent; and ours were down in the 10-percent-or-
less range. So it was this kind of gradual slide.
  I do not call that fair or balanced. It would have been different if 
the rest of the world had come down to a 20-percent-or-less range or 
properly on parity with the United States at 10 percent or less. That 
really is the way we should negotiate.
  Thank goodness our Trade Representative, Charlene Barshefsky, agrees 
with us now and has agreed they will not negotiate from that position 
in Seattle, that clearly the European community and others have to 
bring that down to a near level area.
  Mr. DORGAN. Mr. President, further inquiring, is it not the case that 
exactly the same thing happened on export subsidies? The Senator from 
Idaho described tariffs that exist in our country versus other 
countries and trade talks attempting to reduce those tariffs, except 
they left the tariffs much higher in other countries than in our 
country. If you go down 10 percent, and one country has a 50-percent 
tariff, that means you have taken their tariff down from 50 to 45 
percent. If we have a 10-percent tariff, we go from 10 to 9. That does 
not make any sense to me.
  Exactly the same thing was true with respect to export subsidies. So 
the European countries were left with export subsidies many times in 
excess of anything we could possibly use. That was probably fine in the 
first 25 years after the Second World War because then our trade policy 
was really foreign policy. We were trying to help other countries out 
of the trouble they were in. We could beat anybody else around the 
world in trade with one hand tied behind our back. It didn't matter 
very much. We could do a lot of concessional things.
  That is not the case anymore. The European Union is a tough, shrewd 
economic competitor. Japan is a tough, shrewd economic competitor. The 
same is true of many of our trading partners. We must begin to insist 
that trade policy be hard-nosed economic policy, not foreign policy.
  I inquire of the Senator from Idaho, is it not the case that the 
point we are making in these trade objectives is to say, on both market 
access--on tariffs, on export subsidies--and other items, that we do 
not want to be in a circumstance anymore when, at the end of the 
negotiation, we have made concessions to other countries that put our 
producers at a significant and distinct disadvantage?
  Is it not the case that our producers, at the end of the previous 
rounds, were at a distinct and dramatic disadvantage, and our objective 
is to make sure that does not happen again.
  Mr. CRAIG. The Senator is absolutely correct. In fact, let me give an 
example of the disadvantage we were in that caused great frustration.
  The Senator's State and my State produce a variety of grains. And we 
produce them at high rates of yield. They are high-quality grains. Yet 
we found shiploads of grains, barley in

[[Page 28957]]

some instances, from foreign countries sitting at our docks, being sold 
into our markets at below our production costs.
  How did that come about? That came about because the government of 
the producing country that sent the boatload of grain to the Port of 
Portland subsidized it down to a level that they could actually enter 
our market and compete against our producers who were getting 1950 
prices for their 1998 barley crop.
  How do you pay for a brand new tractor or a brand new combine with 
1950 dollars in 1998? You do not. You run the old combine, you fix it 
up, or you go bankrupt. But that is exactly what was happening because 
our negotiators did not do the effective job of bringing down export 
subsidies in a way that would disallow the greatest grain-producing 
country in the world to accept grain at its ports from foreign nations 
at below our cost of production. That is the best example I can give.
  Mr. DORGAN. If the Senator would yield, I think the Senator is 
describing, at least in one case, a barley shipment coming from the 
European Union to Stockton, CA. It pulled up to the dock in Stockton, 
CA, and was able to offload barley shipped over here from Europe at a 
price that was dramatically below the price that was received in this 
country by barley growers, at a time, incidentally, when our barley 
price was in the tank.
  How could that be the case? The reason they could do it is they 
deeply subsidized it. In fact, they dumped it into our marketplace. 
When that ship showed up at the California dock, it represented legal 
trade. Think of that: A deeply subsidized load of grain coming into a 
country that is awash in its own barley, with prices in the tank, and 
that ship shows up, and it is perfectly legal. They can just dump it 
into our marketplace. They can hurt our farmers. It doesn't matter 
because it is legal under the previous trade agreement.
  That describes why our farmers and ranchers in this country are so 
upset. They have reason to be upset. They ought to be able to expect, 
when our negotiator negotiates with other countries, that we get a fair 
deal. It is not a fair deal to say to other countries: We will compete 
with you, but you go ahead and subsidize; drive down the price. Dump 
it, if you like, and there will be no remedy for family farmers to call 
it unfair trade because we in our trade agreement will say it is OK.
  It is not OK with me. It is not OK with the Senator from Idaho. It is 
not OK with many Republicans and Democrats who serve in Congress who 
insist it is time to ask that trade be fair so our producers, when they 
confront competition from around the world, can meet that competition 
in a fair and honest way. That is not what is happening today.
  If I might make one additional point, the Senator represents a State 
that borders with Canada, a good neighbor of ours to the north. My 
State borders with Canada. I like the Canadians. I think they are great 
people.
  But following the trade agreement with Canada, and then NAFTA, we 
began to see this flood of Canadian durum coming into this country. It 
went from 0 to 20 million bushels a year. Why? Do we need durum in this 
country? No. We produce more than we need. Why are we flooded with 
durum? Because Canada has the state trading enterprise called the 
Canadian Wheat Board, which would be illegal in this country but legal 
there.
  They sell into this country at secret prices. It is perfectly legal. 
You can sell at secret prices. You dump and hide behind your secrecy, 
and no one can penetrate it. That is why our farmers are angry. It has 
totally collapsed the price of durum wheat. It is unfair trade. All the 
remedies that farmers and ranchers would use to fight this unfair trade 
are gone.
  Ranchers have just gotten together in something called R-CALF. They 
have spent a lot of money and legal fees and so on and taken action 
against the Canadians. Guess what. The first couple steps now they have 
won. But that should not be that way. You should not have to force 
producers to spend a great deal of money to go hire Washington law 
firms to pursue these cases.
  Trade agreements ought to be negotiated aggressively on behalf of our 
producers in order to require and demand fair trade. But I wanted to 
make the point about State trading enterprises, which must be addressed 
in this new WTO round, because the STEs have dramatically injured 
American farmers and ranchers.
  My expectation is that Senator Craig has discovered exactly the same 
circumstance in Idaho in terms of his ranchers and farmers trying to 
compete against sanctioned monopolies from other countries.
  Mr. CRAIG. The Senator is absolutely right. When he speaks of 
Statetrading enterprises, the Canadian Wheat Board and the Australian 
Wheat Board control over one third of the world's wheat and wheat flour 
trade. As the Senator just explained, those negotiations are kept 
secret. Those trading enterprises buy the grain from farmers at the 
going market price. Then when they sell it, they do not report it. If 
they are to sell it well below the cost of the market, to get it into 
another country for purposes of sale, they sell it, and they are 
subsidized accordingly. If they can make money, they make money. But 
the point is, those kinds of transactions are not transparent. They are 
not reported.
  In my State of Idaho, you can get a truckload of barley out of Canada 
to an elevator in Idaho cheaper than the farmer can bring it from 
across the street out of his field to that elevator. Why? Because that 
was a sale conducted by that particular trading enterprise, and it was 
sold well below the market, and, of course, that was not reported. You 
do not have marketplace competition. You cannot even understand it and 
compare figures, if you have no transparency in the marketplace. State 
trading enterprises are known for that, and we have asked our Secretary 
of Agriculture and our trade ambassador to go directly at this issue. 
Even the farmer of Canada now recognizes that this is also 
disadvantaging the producer in Canada, to have this kind of a 
monopolistic power controlling the grain trade of the world.
  Mr. DORGAN. Mr. President, I have been pleased to work with Senator 
Craig and others in establishing this caucus. I will be in Seattle at 
the trade talks, as are many of my colleagues. We are determined this 
time to make sure that, at the end of these trade talks, we do better 
than we have done before on behalf of family farmers and ranchers.
  Will Rogers said, I guess 60 years ago, the United States of America 
has never lost a war and never won a conference. He surely would have 
observed that if he had observed the trade negotiations that have 
occurred with Republican and Democratic administrations over recent 
decades. We are determined to try to change that. That is the purpose 
of this caucus.
  I yield the floor.

                          ____________________