[House Report 105-672]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-672
_______________________________________________________________________


 
 SENSE OF CONGRESS REGARDING ELIMINATION OF RESTRICTIONS ON IMPORTS OF 
                  UNITED STATES AGRICULTURAL PRODUCTS

                                _______
                                

   August 3, 1998.--Referred to the House Calendar and ordered to be 
                                printed

_______________________________________________________________________


    Mr. Archer, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                    [To accompany H. Con. Res. 213]

  The Committee on Ways and Means, to whom was referred the 
concurrent resolution (H. Con. Res. 213) expressing the sense 
of the Congress that the European Union is unfairly restricting 
the importation of United States agricultural products and the 
elimination of such restrictions should be a top priority in 
trade negotiations with the European Union, having considered 
the same, report favorably thereon with amendments and 
recommend that the concurrent resolution as amended be agreed 
to.
  The amendments are as follows:
  Strike out all after the resolving clause and insert in lieu 
thereof the following:

That it is the sense of the Congress that--
          (1) many nations, including the European Union, unfairly 
        restrict the importation of United States agricultural 
        products;
          (2) the restrictions imposed on United States agricultural 
        exports are among the most vexing problems facing United States 
        exporters;
          (3) the elimination of restrictions imposed on United States 
        agricultural exports should be a top priority of any current or 
        future trade negotiation;
          (4) the President should develop a trade agenda which 
        actively addresses agricultural trade barriers in multilateral 
        and bilateral trade negotiations and steadfastly pursues full 
        compliance with dispute settlement decisions of the World Trade 
        Organization;
          (5) in such negotiations, the United States should seek to 
        obtain competitive opportunities for United States exports of 
        agricultural products in foreign markets substantially 
        equivalent to the competitive opportunities afforded to foreign 
        exports in United States markets, and to achieve fairer and 
        more open conditions of trade;
          (6) because of the significance of the issues concerning 
        agricultural trade with the European Union, the United States 
        Trade Representative should not engage in any trade negotiation 
        with the European Union if the Trade Representative determines 
        that such negotiations would undermine the ability of the 
        United States to achieve a successful result in the World Trade 
        Organization negotiations on agriculture set to begin in 
        December 1999; and
          (7) the President should consult with the Congress in a 
        meaningful and timely manner concerning trade negotiations in 
        agriculture.

  Amend the preamble to read as follows:

Whereas on a level playing field, United States producers are the most 
competitive suppliers of agricultural products in the world;

Whereas United States agricultural exports reached a level of 
$57,000,000,000 in 1997, compared to a total United States merchandise 
trade deficit of $198,000,000,000;

Whereas the future well-being of the United States agricultural sector 
depends, to a large degree, on the elimination of trade barriers and the 
development of new export opportunities throughout the world;

Whereas increased United States agricultural exports are critical to the 
future of the agricultural, rural, and overall economy of the United 
States;

Whereas the opportunities for increased agricultural exports are undermined 
by unfair subsidies provided by trading partners of the United States, and 
by various tariff and nontariff trade barriers imposed on highly 
competitive United States agricultural products;

Whereas the Foreign Agricultural Service estimates that United States 
agricultural exports are reduced by $4,700,000,000 annually due to the 
unjustifiable imposition of sanitary and phytosanitary measures that deny 
or limit market access to United States products;

Whereas Asian markets account for more than 40 percent of United States 
agricultural exports worldwide, but the financial crisis in Asia has caused 
a severe drop in demand for U.S. agricultural products and a consequent 
drop in world commodity prices;

Whereas multilateral trade negotiations under the auspices of the World 
Trade Organization and the Asia Pacific Economic Cooperation Forum and 
trade negotiations for a Free Trade Area of the Americas represent 
significant opportunities to reduce and eliminate tariff and nontariff 
trade barriers on agricultural products;

Whereas negotiations for country accessions to the World Trade 
Organization, particularly China, present important opportunities to reduce 
and eliminate these barriers;

Whereas the United States is currently engaged in a number of outstanding 
trade disputes regarding agricultural trade;

Whereas disputes with the European Union regarding agriculture matters 
involve the most intractable issues between the United States and the 
European Union, including--

                  (1) the failure to finalize a veterinary equivalency 
                program, which jeopardizes an estimated $3,000,000,000 
                in trade in livestock products between the United 
                States and the European Union;
                  (2) the ruling by the World Trade Organization that 
                the European Union has no scientific basis for banning 
                the importation of beef produced in the United States 
                using growth promoting hormones, and that the European 
                Union must remove by May 13, 1999, its import ban on 
                beef produced using growth promoting hormones;
                  (3) the failure to use science, as in the beef 
                hormone case, which raises concerns about the European 
                Union fulfilling its obligations under the WTO 
                Agreement on the Application of Sanitary and 
                Phytosanitary Measures;
                  (4) the promulgation by the European Union of 
                regulations regarding the use of specified risk 
                materials for livestock products which have a disputed 
                scientific basis and which serve to impede the 
                importation of United States livestock products, 
                despite the fact that no cases of bovine spongisorm 
                encephalopathy (mad cow disease) have been documented 
                in the United States;
                  (5) the ruling by the World Trade Organization in 
                favor of the United States that the European import 
                regime restricting the importation of bananas violates 
                numerous disciplines established by the General 
                Agreement on Tariffs and Trade and the General 
                Agreement on Trade in Services, and that the European 
                Union must be in full compliance with the decision of 
                the World Trade Organization by January 1, 1999;
                  (6) the hindering of trade in products grown with the 
                benefit of biogenetics through a politicized approval 
                process that is nontransparent and lacks a basis in 
                science; and
                  (7) continuing disputes regarding European Union 
                subsidies for dairy and canned fruit, and a number of 
                impediments with respect to wine: Now, therefore, be it

  Amend the title so as to read:

    A concurrent resolution expressing the sense of the 
Congress that the elimination of restrictions on the 
importation of United States agricultural products by United 
States trading partners should be a top priority in trade 
negotiations.

                            I. INTRODUCTION

                         a. purpose and summary

    The purpose of H. Con. Res. 213 is to emphasize the 
importance of achieving the reduction of barriers to trade in 
agriculture and to underscore that the elimination of these 
barriers should be a top priority of multilateral and bilateral 
trade negotiations. As amended, the resolution calls on the 
President to: (1) develop a trade agenda which actively 
addresses agricultural trade barriers in multilateral and 
bilateral trade negotiations; (2) in conducting such 
negotiations, seek competitive opportunities for U.S. exports 
in foreign markets substantially equivalent to the competitive 
opportunities afforded foreign exports in U.S. markets, in 
consultation with Congress; and (3) aggressively pursue full 
compliance with dispute settlement decisions of the World Trade 
Organization (WTO).

                 b. background and need for legislation

    Agricultural goods accounted for $93.1 billion in total 
(two-way) U.S. goods trade during 1997, up 40 percent (26.6 
billion) from 1992. The Committee notes that United States 
producers of agricultural products are the most competitive 
suppliers in the world. Because domestic food consumption is 
projected to stay relatively stable, the future well-being of 
the United States agricultural sector depends, to a large 
degree, on the elimination of trade barriers and the 
development of new export opportunities throughout the world. 
The Committee's view is that United States agricultural exports 
are critical to the future of the agricultural, rural and 
overall economy of the U.S. The issue has become urgent in 
light of the fact that agricultural export markets in Asia, 
accounting for more than 40 percent of U.S. agriculture exports 
worldwide, have been severely affected by the Asian financial 
crisis. The United States economy is suffering from the 
consequent drop in world commodity prices and downturn in 
demand for U.S. agricultural products.
    The resolution points out that multilateral trade 
negotiations under the auspices of the WTO and the Asia Pacific 
Economic Cooperation forum (APEC) and trade negotiations for a 
Free Trade Area of the Americas represent important 
opportunities to reduce and eliminate tariff and nontariff 
trade barriers on agricultural products. Similar opportunities 
exist in negotiations for country accessions to the WTO.
    The resolution states that disputes regarding agricultural 
matters involve the most difficult and intractable issues 
between the United States and our largest trade and investment 
partner, the European Union (EU). For example, Europe has 
failed to finalize a veterinary equivalency program, which 
jeopardizes an estimated $3,000,000 in trade in livestock 
products between the United States and the EU. Europe continues 
to maintain an import ban on beef produced using growth 
promoting hormones, despite the fact that the WTO has ruled 
that there is no scientific basis for this ban. The Committee 
notes that the WTO has ruled that this ban must be removed by 
May 13, 1999 and fully expects Europe to come into compliance 
with its international obligations by this date at the latest.
    In another important ruling for U.S. exporters, the WTO 
determined that the EU import regime restricting the 
importation of bananas violates numerous disciplines 
established by the General Agreement on Tariffs and Trade and 
the General Agreement on Trade in Services. Furthermore, the 
WTO ruled that the EU must be in full compliance with its 
obligations in this sector by January 1, 1999. The Committee 
notes that full implementation of these WTO decisions will be 
indicative of Europe's basic commitment to the credibility and 
long viability of the WTO dispute settlement system.
    Notwithstanding the fact that no cases of bovine spongisorm 
encephalopathy (mad cow disease) have been found in the United 
States, the EU has issued regulations specifying risk materials 
for livestock products which lack a scientific basis and which 
have the effect of impeding the importation of U.S. livestock 
products. Similarly, U.S. exports of trade in products grown 
with the benefit of biogenetics are hindered due to a non-
transparent and politicized approval process that also lacks a 
sound scientific basis.
    Finally, the Committee takes note of the fact that there 
are ongoing disputes with the EU over subsidies in Europe for 
dairy and canned fruit. The Committee is also very concerned 
about the existence of numerous impediments in Europe to the 
exports of American wine.
    Because of the significance of the issues concerning trade 
with the EU, the resolution states that the United States Trade 
Representative should not engage in any trade negotiation with 
the EU if the Trade Representative determines that such 
negotiations would undermine the ability of the United States 
to achieve a successful result in the WTO negotiations on 
agriculture set to begin in December 1999.

                         c. legislative history

Committee action

    H. Con. Res. 213, sponsored by Congressman Ewing, was 
introduced on February 11, 1998, and referred to the Committee 
on Ways and Means. The Full Committee marked up the bill in 
open session, pursuant to notice, on July 29, 1998.
    At that time, an amendment in the nature of a substitute 
was offered by Chairman Archer. It was adopted by voice vote. 
The Committee then ordered the resolution favorably reported by 
voice vote, with a quorum present.

Legislative hearing

    The Subcommittee on Trade held a hearing on United States 
efforts to reduce barriers to trade in agriculture on February 
12, 1998 and a hearing on trade relations with Europe and the 
new Transatlantic Economic Partnership on July 28, 1998. At 
these hearings, Members of Congress, as well as representatives 
of the Administration and business groups, expressed their 
views regarding agricultural trade with the European Union.

                     II. EXPLANATION OF PROVISIONS

Current law

    No applicable provision in current law.

Explanation of the resolution

    The resolution expresses the sense of the Congress that: 
(1) many nations, including the European Union, unfairly 
restrict the importation of U.S. agricultural products, (2) the 
restrictions imposed on U.S. agricultural exports are among the 
most vexing problems facing U.S. exporters, (3) the elimination 
of restrictions imposed on U.S. agricultural exports should be 
a top priority of any current and future trade negotiation, (4) 
the President should develop a trade agenda which actively 
addresses agricultural trade barriers in multilateral and 
bilateral trade negotiations, (5) in such negotiations, the 
United States should seek to obtain competitive opportunities 
for U.S. exports and agricultural commodities in foreign 
markets which are substantially equivalent to the competitive 
opportunities afforded to foreign exports in U.S. markets, and 
to achieve fairer and more open conditions of trade, (6) the 
United States Trade Representative should not engage in any 
trade negotiation with the European Union if the Trade 
Representative determines that such negotiations would 
undermine the ability of the United States to achieve a 
successful result in the World Trade Organization negotiations 
on agriculture set to begin in December 1999, and (7) the 
President should consult with the Congress in a meaningful and 
timely manner concerning trade negotiations in agriculture.

Reason for change

    It is necessary to state the sense of the Congress about 
agriculture at this time due to the weather-related problems 
which are hurting U.S. agriculture during the growing season, 
as well as the decline in agricultural exports due to the Asian 
financial crisis.

                       III. VOTE OF THE COMMITTEE

    In compliance with clause 2(l)(2)(B) of rule XI of the 
Rules of the House of Representatives, the following statements 
are made concerning the vote of the Committee on Ways and Means 
in its consideration of H. Con. Res. 213.

                       Motion to Report the Bill

    H. Con. Res. 213 was ordered favorably reported with an 
amendment in the nature of a substitute to the House by voice 
vote, with a quorum present.

                  IV. BUDGET EFFECTS OF THE RESOLUTION

               A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

    In compliance with clause 7(a) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of this resolution, H. 
Con. Res. 213 as reported: The Committee believes that a 
concurrent resolution such as H. Con. Res. 213 has no budgetary 
effect.

    B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX EXPENDITURES

    In compliance with subdivision (c) of clause 2(l)(3) of 
rule XI of the Rules of the House of Representatives, the 
Committee states that enactment of H. Con. Res. 213 would have 
no effect on the receipts of the U.S. government.

      C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE

    In compliance with subdivision (c) of clause 2(l)(3) of 
rule XI of the Rules of the House of Representatives, requiring 
a cost estimate prepared by the Congressional Budget Office 
(CBO), the following statement is made: No CBO cost estimate is 
required for a concurrent resolution such as H. Con. Res. 213.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

          A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    With respect to subdivision (A) of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives (relating to 
oversight findings), the Committee believes that passage of H. 
Con. Res. 213 would place Congress on record in the matter of 
negotiating trade agreements with respect to agriculture.

    B. SUMMARY OF FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE ON 
                    GOVERNMENT REFORM AND OVERSIGHT

    With respect to subdivision (D) of clause 2(l)(3)of rule XI 
of the Rules of the House of Representatives, no oversight 
findings or recommendations have been submitted to the 
Committee by the Committee on Government Reform and Oversight 
with respect to the subject matter contained in the resolution.

                 C. CONSTITUTIONAL AUTHORITY STATEMENT

    With respect to clause 2(l)(4) of rule XI of the Rules of 
the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article I of the 
Constitution, Section 8 (``The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States * * * '').

                                
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