[Congressional Record (Bound Edition), Volume 149 (2003), Part 22]
[Senate]
[Pages 31065-31066]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            MORNING BUSINESS

                                 ______
                                 

                      THE FLORIDA CITRUS INDUSTRY

  Mr. NELSON of Florida. Mr. President, this week, leaders from thirty-
four countries around the Western Hemisphere gathered in Miami for the 
Free Trade Area of the Americas (FTAA) Ministerial and Americas 
Business Forum for the purposes of expanding free trade within the 
Western Hemisphere.
  The negotiations at this and future Ministerial meetings will greatly 
impact my State of Florida.
  This event drew large headlines in the papers across the hemisphere 
as leaders converged upon Miami and anti-globalization protesters 
gathered outside to voice opposition. In this context, I feel it 
appropriate to commend Miami-Dade County, the City of Miami, and all 
the local and Federal law enforcement officers who helped keep the 
peace during a tense week of negotiations, and everyone who made it a 
success.
  But in light of these talks, I want to share my own concerns 
regarding the FTAA negotiations, and the path ahead.
  These talks did generate positive movement forward, towards greater 
economic integration in the hemisphere. Trade Ministers agreed to a 
baseline of minimum standards for a full and comprehensive agreement 
that takes into account differing levels of development among nations. 
This framework is a step forward that gives nations flexibility.
  A carefully negotiated Free Trade Area of the Americas could generate 
new economic opportunities for Florida, our country, and the entire 
Western Hemisphere.
  Yet, the FTAA poses opportunities and challenges for Florida as we 
work to make Miami the premier U.S. candidate city for the location of 
the permanent FTAA Secretariat, while at the same time protecting the 
viability of a key part of our way of life in Florida--the domestic 
citrus industry.
  We must be cautious about the scope of the final FTAA and consider 
how it affects our domestic industries. I urge U.S. negotiators to take 
some important concerns into account as an agreement is shaped in the 
months ahead. The different parties, alliances, and groups involved in 
the negotiations have gone back and forth on which goods and products 
to include in a final agreement, and the flexibility provided for in 
the final Miami Declaration reflects this fact.
  Citrus is one product that must not be included in these 
negotiations. I again call upon the Administration, as I have done in 
the past, to give citrus special consideration; given the unique nature 
of the citrus fruit and juice trade.
  The administration should state unambiguously that it will not agree 
to any reduction of the current tariff on imported orange juice in the 
context of the FTAA or any other trade negotiation, until Brazil ceases 
its monopolistic, anticompetitive trade practices. Let me explain why 
this is so important to the State of Florida.
  This tariff is a lifeline for Florida's citrus industry and the 
State's economy because it helps to promote competition--and it enables 
us to compete in the global marketplace.
  It is very clear that any reduction in the tariff would destroy 
Florida's citrus industry and devastate the State's economy. The citrus 
industry is the State's second largest, contributing over $9 billion to 
our economy. And the citrus industry accounts for nearly 90,000 direct 
and indirect jobs throughout Florida and the country.
  A collapse of this industry would not only cost tens of thousands of 
jobs, it would also cost the State and county governments of Florida up 
to $1 billion in lost tax revenues.
  This would mean less money for other vital public services, such as 
police and firefighters.
  This spring, I arranged for Andrew LaVigne, Executive Vice President 
and CEO of Florida Citrus Mutual to testify before the Senate Foreign 
Relations Committee and share these arguments, for the benefit of my 
colleagues in the U.S. Senate so that they could be made a permanent 
part of the record, because they are so strong.
  Orange juice consumption is concentrated chiefly in two places: the 
United States and the European Union. Unlike other agricultural 
products, production is also limited chiefly to two places: the United 
States and Brazil. Florida's growers provide the vast majority of U.S. 
citrus that is used for orange juice.
  Florida's citrus industry is efficient, competitive, and 
environmentally responsible; it is also one of only a handful of U.S. 
agricultural commodities that receives no federal or state subsidies. 
Let me say it another way: American taxpayers do not subsidize the 
citrus industry, unlike many other sectors that reaped benefits in last 
year's farm bill.
  Florida's citrus industry is composed of 12,000 growers, many of them 
small family-owned operations, in addition to the many tens of 
thousands of others around the state and country who contribute to this 
$9 billion industry. But, this is more than just an economic engine to 
Florida. It is an American way of life.
  Brazil's citrus industry, in contrast, is dominated by four large 
producers who form large export cartels to maximize their advantage and 
squeeze small producers. The industry also benefits from advantages 
brought by years of past subsidization and dumping, lax environmental 
laws, weak and largely un-enforced labor laws, and price manipulation. 
And, Brazilian orange juice already has access to U.S. markets. Their 
government's pronouncements to the contrary are counterproductive to 
advancing greater hemispheric economic cooperation.
  Brazil's citrus industry also continues to rely heavily on child 
labor and the low wages associated with using children.
  In Florida, we do not allow children to work in our orange groves.
  Until Brazil whole-heartedly enforces its labor laws, putting an end 
to child labor and paying workers a decent living wage, there will not 
be a level playing field for competition.
  Florida's citrus industry can compete with Brazil, or anyone else, as 
long as there is a fair playing field. WTO negotiations should deal 
with these problems. But in the meantime, the tariff on frozen 
concentrated orange juice imports acts to balance the anti-competitive 
practices of Brazil. It also acts to prevent the large Brazilian 
producers from overwhelming the U.S. market and driving Florida's 
12,000 growers out of business.
  During the Trade Promotion Authority debate in 2001, Senator Graham 
and I offered an amendment that would have prevented tariffs from being 
reduced on commodities imported from other countries in violation of 
trade laws, such as Brazilian orange juice.
  Although this amendment was defeated, we were successful in including 
language that required the Administration to study and report to the 
Congress on the economic effects that a tariff removal would have on 
import-sensitive commodities like frozen concentrated orange juice and 
citrus. I look forward to reviewing the results of these studies as the 
debate progresses.

[[Page 31066]]

  Without this tariff, the Florida citrus industry could collapse, and 
Brazil would have a monopoly over the global market. Already, Brazil 
produces 53 percent of the world's orange juice and has a virtual 
monopoly over the European market.
  Removal of this tariff would not enhance free trade--it would, 
rather, giver Brazil a total world monopoly and make that country the 
world's dominant citrus and citrus juice producer and enable them to 
control market supply, access and prices with no competition.
  This would not only devastate Florida's citrus industry, it would 
also be bad for all consumers. Absent competition from Florida's 
growers, the large Brazilian cartels would have all consumers at their 
mercy.
  I have worked to bring these issues to the attention of the 
Administration and to ensure that one of Florida's primary industries 
is not traded away at the negotiating table, and I will continue to do 
so. In fact, I plan to travel to Brazil in the coming weeks and have 
asked to meet with President Lula da Silva so that I can carry the 
message of the Florida citrus growers: free trade can only benefit 
American consumers if it offers free and fair competition and is not 
monopolistic--so Brazil must reform its monopolistic citrus industry.
  It is past time for this administration to acknowledge the 
inequalities between the U.S. and Brazilian citrus industries, and 
recognizing these inequities, to treat citrus accordingly.
  I would like to conclude by again urging the administration not to 
agree to any reduction of the current tariff on imported orange juice, 
because if they do, an American industry and American consumers will 
pay a steep price. These issues are too important to the people of 
Florida to be ignored, and we will all be watching closely in the 
months ahead.
  I ask unanimous consent to have printed in the Record conclusions in 
the testimony from Andrew LaVigne, Executive Vice President and CEO of 
Florida Citrus Mutual, from a hearing before the House Agriculture 
Committee on June 18, 2003, and Squire Smith, President of Florida 
Citrus Mutual, before the House Agriculture Committee, Subcommittee on 
Livestock and Horticulture on November 5, 2003, and an Op-Ed that 
appeared in the Miami Herald on November 19, 2003.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                               Conclusion

       The U.S. market is by far the most significant market we 
     have. Unlike dairy and crop commodities, which are consumed 
     throughout the world, orange juice is consumed primarily in 
     the highly developed market economies of the United States 
     and Europe. With Brazilian juice firmly entrenched in Europe 
     at rock bottom prices, it only makes sense for Florida 
     producers to concentrate on sales at home. Our growth in 
     exports of specialty products, such as NFC, must necessarily 
     be incremental and secondary to the domestic market for FCOJ. 
     While the Florida industry will continue to seek out new 
     export markets, both for fresh and processed products, it is 
     myopic to think that we are likely to be as large a factor in 
     foreign markets as Brazil. We simply do not have the domestic 
     subsidies we would need to compete with the Brazilians and 
     Europeans in Europe. Furthermore, we cannot be there to 
     develop those new foreign markets slowly over the many years 
     it will take them to achieve higher disposable incomes, if 
     the Florida industry is forced out of existence by the 
     elimination of the tariff. We want to serve the U.S. market 
     and we can do so without the huge government payments that 
     other agricultural sectors receive. However, the U.S. orange 
     juice tariff is necessary to offset the unfair or artificial 
     advantages that lower the price of Brazilian juice.
       Florida Citrus Mutual understands that free trade in many 
     industries, including many agricultural industries, leads to 
     increased competition, eventual price benefits to consumers, 
     and overall global economic growth. Unfortunately, free trade 
     cannot deliver these rewards to such a concentrated and 
     polarized global industry, especially one in which the 
     developing country's industry is, in fact, already the most 
     highly developed in the world. Florida Citrus Mutual 
     appreciated the opportunity to explain to the Committee the 
     unique global structure of the orange juice industry and the 
     negative economic effects that would occur as a result of 
     U.S. tariff reduction or elimination.
                                  ____


        Domestic Policies Affecting the Specialty Crop Industry


                               conclusion

       The U.S. Government's approach to domestic policy that 
     impacts the fruit and vegetable industry, including the 
     citrus industry, is to a large extent driven by the U.S. 
     trade policy as it affects the industry. Our ability to 
     properly address issues of pest and disease interdiction and 
     eradication, labor law reform, agricultural research and 
     export market growth depend almost entirely upon the 
     balancing impact of the tariff, which assures that the 
     industry can continue to exist in an unsubsidized domestic 
     environment alongside otherwise artificially manipulated 
     global competition.
                                  ____


                 [From the Miami Herald, Nov. 19, 2003]

                    Tariffs Would Control Oversupply

                           (By Mark Ritchie)

       Last September in Cancun, the Bush administration's 
     promises of free trade's benefits ran headlong into the 
     reality of the last ten years under the World Trade 
     Organization and the U.S.-Canada-Mexico arrangement known as 
     NAFTA--the North American Free Trade Agreement.
       Governments from Latin America, Africa and Asia decried the 
     loss of millions of farm jobs, and denounced a system that 
     promotes the continued export of agricultural commodities 
     below their cost of production price (dumping) by U.S. and 
     European agribusiness corporations. That's why the WTO talks 
     in Cancun collapsed.
       Fortunately, a close look at the underlying conflicts at 
     the WTO reveals the potential for a new approach that 
     negotiators trying to create a Free Trade Area of the 
     Americans should use as a blueprint. It would create a win-
     win solution to the chronic low prices that plague farmers in 
     the United States, Brazil and elsewhere.
       International trade negotiations used to be about finding 
     solutions that were aimed at benefiting societies as a whole. 
     In 1947, just a few miles from Miami, governments met in 
     Havana to discuss the creation of the International Trade 
     Organization (ITO). The stared goal for the organization was 
     full employment and the need to global monopolies and 
     predatory trade practices. At that time, the nations gathered 
     knew well the ravages of war and the role that brutal trade 
     conflicts played in creating the economic Depression of the 
     1930s, the breeding ground for fascism.


                            Balancing needs

       At the talks in Havana, the U.S. Department of Agriculture 
     brought forward a special set of agricultural trade rules 
     that would help balance the needs of producers and consumers 
     with an emphasis on protecting food security over the long 
     term. In essence, U.S. negotiators, with the Great Depression 
     still very much on their minds, developed rules that helped 
     nations balance supply and demand.
       The ITO never got off the ground, but these agricultural 
     rules were included in the original general Agreement on 
     Tariffs and Trade, precursor to the WTO. The rules allowed 
     nations to use quantitative import controls as long as they 
     were imposing supply controls. This spurred countries to 
     address domestic oversupply, helping to bring global supply 
     and demand into balance. This plan was key to the ``golden 
     era'' for U.S. and global agriculture in the 1950s and 60s.
       The WTO Agreement on Agriculture undid this important work, 
     but now the ministers gathering in Miami have an opportunity 
     to make improvements by returning to the work done by the 
     pioneers back in Havana in 1947. They have to tackle global 
     over-supply in ways that can help producers in Florida and 
     Brazil earn a profit by restoring the balance between supply 
     and demand that has been damaged by the ``race to the 
     bottom'' results of free trade.
       Negotiators must address monopoly-style business practices 
     that dominate global trade in highly competitive products 
     when global prices fall too far.


                           Tariffs beneficial

       The solution to low commodity prices in general, be it 
     orange juice or coffee, is not that complicated. Every 
     business knows that when supply and demand are out of 
     balance, there is going to be trouble. In agriculture, when 
     there is not enough supply, some people go hungry. When there 
     is too much supply, prices drop, farmers suffer and many go 
     out of business.
       We need modern trade agreements that enable countries to 
     restore the balancing mechanisms for supply and demand. To 
     take that step, the Bush administration needs to unlock the 
     ``free trade'' straitjacket of eliminating tariffs at all 
     costs, and start focusing on agricultural market 
     fundamentals.

                          ____________________