The review of U.S. efforts to negotiate on behalf of American agriculture came as extensive efforts are underway to win a place for China in the World Trade Organization and the deadline approaches for another important decision in the banana dispute with the EU.
"China and the EU are the largest and second-largest markets in the world for American agricultural products," Grassley said. "Real progress must be made by China on removing discriminatory licensing practices and restrictive sanitary regulations aimed at U.S. agricultural products before we can give serious consideration to China's bid to join the WTO."
Grassley warned that now is a critical time for the U.S. to negotiate for American agriculture. "Our farmers will lose out if we let China in to the WTO with the attitude that we'll work on the details later. That's just what happened with Japan in the 1950s, and we're still fighting for market access. I want to make sure that U.S. negotiators use the leverage they have right now to resolve these issues in advance of China's possible accession. We only have one chance to get it right, and the stakes are very high."
During this morning's hearing, Grassley released a letter from former President Gerald R. Ford, who wrote, "I strongly believe that China must make more than a down payment on market access concessions. Rather, China should guarantee unconditional and full market access upon entry into the World Trade Organization, and should abide by the same trading rules the WTO applies to any other major industrial power. We have seen too many times over the years when promises of future concessions to open foreign markets are made, and then the promised concessions fail to materialize. The stakes this time are too high to engage China on anything but normal commercial terms."
Grassley specifically cited the commitments made by China in 1997, to permit the importing of meat for its retail market during a one-year trial program. Under the plan, China agreed to allow meat imports into the general market form selected plants in three countries, including the U.S. Of the 36 companies granted permission to import meat under this program, just one was approved to import pork.
When the program expired, almost no U.S. pork had been purchased, and the Chinesegovernment did not reveal the extent of any quotas placed on the volume of meat allowed to be imported by this one company, despite a 1992 commitment to provide transparency on all laws and regulations regarding the sale, distribution, processing, or other use of imports or exports.
"Words alone on market access are not enough," Grassley said. Last week, Grassley met with Ambassador Li Zhaoxing of China to discuss the sale of U.S. pork in China.
Agricultural trade issues with the EU have never been more important or more contentious. The EU's huge direct farm subsidies, which are about eight times the amount of U.S. direct subsidies ? along with its price supports and market-distorting quotas under its Common Agricultural Policy ? have made it difficult to conduct free trade in many agricultural products. Just last week, the EU farm ministers announced a reform of the Common Agricultural Policy that will actually boost total EU farm spending from 2000 to 2006 by about $4 billion over 1999 spending levels.
The U.S. and EU are also at odds over biotechnology and food safety requirements that "are nothing more than non-tariff trade barriers," Grassley said.
Grassley said that today's hearing of the International Trade Subcommittee was to help inform continued discussions with China and the WTO on behalf of American agriculture.
In addition, he said there is important unfinished business of the Uruguay Round in new multilateral trade negotiations on agriculture. "The conversion of quantitative restrictions to tariff rate quotas left many agricultural products highly protected. Tariffs on ag products worldwide are three to four times higher than the rates for most industrial products, with some tariffs reaching 200 percent or more," Grassley said.
"We've come a long way in the sense that the 23 original members of the General Agreement on Tariffs and Trade in Geneva in 1947 are now a group of 134 nations seeking even greater nondiscriminatory access to markets and the ability to more effectively settle trade disputes through the WTO. The system has expanded our collective wealth and helped to secure peace in the world," Grassley said. "Today, new challenges face us and we need to confront them aggressively to ensure free trade that's also fair trade."
Grassley is chairman of the Senate subcommittee and a congressional advisor on trade policy. The following individuals testified at the hearing Grassley chaired today:
