Grassley convened the hearing as chairman of the Senate Finance Subcommittee on International Trade. He said he organized the discussion because of the "critical importance of preparing for the next round of world trade negotiations for agriculture."
Grassley opened today's hearing by stressing that with the new farm bill, Congress and the President made a commitment to farmers to finding and opening new markets for their products. "We committed to negotiating tough trade agreements and demanding compliance with these agreements. And we committed to leading the world in being an advocate for trade liberalization," he said.
The next round of world trade negotiations for agriculture will take place in accordance with the Uruguay Round Agreement on Agriculture. It requires the issues to be re-visited no later than December 1999. To date, the Agreement has mandated a reduction in tariffs, export subsidies and trade-distorting domestic support for agriculture. It attempted to clarify rules governing import restrictions imposed due to sanitary and phytosanitary concerns. And it sought to apply market access and subsidy disciplines to state trading enterprises.
Grassley said that while agricultural trade is already "a success story," it is crucial that further trade liberalization continue. He said today's subcommittee hearing provided an excellent opportunity to discuss what steps the administration is taking now to prepare for these negotiations next year and to solicit guidance from the industry on its priority areas.
"Agriculture is extremely dependent on foreign markets for its prosperity. Fully one-third of all acres planted in the United States produce crops that are exported. Without exports, one-third of our productive acres would lie idle. In Iowa, about 40 percent of all farm income is earned from foreign sales. It's hard to imagine many farmers who could afford to give up 40 percent of tier income and still be in business," Grassley said.
In fact, Grassley said agriculture is truly the "shining star" of the U.S. balance of payments. Agricultural exports total about $60 billion per year and represent a trade surplus with the rest of the world in excess of $20 billion. "That's among the highest trade surpluses of any sector of our economy," Grassley said.
During today's hearing, Grassley led a discussion of key trade issues for American farmers, including the need for the President of the United States to have the authority to negotiate for the best interests of American farmers, business owners and consumers.
"Last weekend, the President of the most open economy in the world, a country literally built on free trade, was left to begin talks on a new Free Trade Area of the Americas from a position of weakness," Grassley said. "The rest of the world is questioning our will to lead in world affairs. And that is dangerous."
In addition, Grassley raised questions today about what the administration and the private sector is doing to prepare for the 1999 talks. He sought to identify what various farm groups want to accomplish during the next round of negotiations. And he focused the discussion on how best to address the unique trade problems that have arisen due to the increased use of biotechnology by American farmers.
Grassley has voiced serious concerns this year about consideration by the administration of a comprehensive trans-Atlantic free trade pact that would not include agricultural issues. In February, Grassley and Sen. Sam Brownback of Kansas introduced a sense of the Senate resolution stating that agriculture must be a top priority of the office of the U.S. Trade Representative (USTR) in any agreements sought with the European Union (EU). Brownback testified at Grassley's hearing today.
Among other witnesses at today's hearing, Iowans Dean Kleckner and Chuck Johnson also testified. Kleckner is President of the American Farm Bureau Federation and Johnson is Chairman and CEO of the largest seed company in the world, Pioneer Hi-Bred International, Inc.
Grassley is an outspoken advocate for the interests of American farmers in world trade. In December 1996, Grassley traveled to Singapore for the first-ever meeting of the WTO to provide input on behalf of American agriculture.