Erocess. No canned corned beef is produced in the United States
ecause U.S. producers are not required to retort beef and to do is
not economical.
Recently, during the special GSP review for the Eastern and
Central European countries, canned cooked beef, as opposed to
canned cornea beef, was also added to the list of GSP-eligible
items, with the caveat that product produced in Argentina was ex-
cluded due to its perceived competitiveness. Therefore, canned
cooked beef from Brazil and Uruguay is now eligible for duty-free
treatment under GSP.
In summary, CCMIA strongly supports renewal and extension of
GSP since it: promotes U.S. jobs and economic competitiveness;
provides an economical, low-cost source of meat protein for low-in-
come consumers; and it does not harm U.S. business since it does
not apply to import-sensitive goods.
Thank you.
Chairman Gibbons. Well, thank you, and I thank all the mem-
bers of the panel.
This concludes the subcommittee's hearing on the administra-
tion's request for fast-track extension and on other expiring provi-
sions of the Trade Act. The record of the hearing will also close at
the close of business today.
I thank all of you for coming and for your participation.
[Whereupon, at 12:01 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
100
AGORA INTERNATIONAL LTD.
184-10 JAMAICA AVE., HOLLIS, NT 1 1423
TOLL-FREE 800 223-5825 TEL. (M.T. STATE): 718 454 7700 TELEX. DYNAMIC6647SUW CABLE: ENGEL-AGORA FAX: 1 -718 2 17-7 184
APRIL 29 1993
The Honorable Dan Rostenkowski
U.S. House of Representatives
Washington, D.C. 20515
Dear Representative Rosetenkowski ,
I'm writing this letter with deep concern after I heard that the
GSP System will die July 4th this year.
I don't consider myself to be an economist, but as a simple
businessman I can see the following negative results if the above
will happen.
DA threat for a sizable reduction of our business dealing in
Stationery, School Supplies, Writing Supplies, Educational
Art Materials etc.. which are all imported.
2)In such case, part of our office staff and a bigger part yet of
our warehouse employees will have to be laid off and thus be
added to the big number of umemployed people we have now in
this country.
3)As we cater to stores and chains who serve the low income
class who make merchandise available to them at very fair and
low prices, we feel that this merchandise will now have to go
up on price substantially and create hardship to these people
as well as be a part of inflation trend.
4)Reduction of activities will also cause reduction of Trucking,
Distribution Personel and services as well as Banking and
all related offices such as Custom Broker's, Pier Workers etc.
As importer's of merchandise' from these countries now in danger
to be removed from GSP system, such as, Indonesia, Malaysia,
Thailand, Brazil, India and Israel, we appeal to you to do
everything in your power to extend this system at least for one
more year during which time it could be replaced with a new fair
system which is good for this country and its people as well as
for our friends overseas.
>resi dent
IMPORTERS EXPORTERS MANUEACTURERS « DISTRIBUTORS SERVING THE VOLUME TRADE IN
SCHOOL SUPPLIES. STATIONERY PAPER PRODUCTS PHOTO ALBUMS FRAMES AND GENERAL MERCHANDISE
101
April 28, 1993
Ms. Mary Jane Wignot
Professional Assistant
House Trade Subcommittee
1136 Long worth House Office Building
Washington, D.C. 20515
Dear Ms. Wignot:
According to Ambassador Kantor, the President is requesting a 15-month renewal of the
authority for the Generalized System of Preferences (GSP) program, which expires in
July of this year.
980 Nimh Street
The Alliance of Western Milk Producers is the trade association which
represents 80 percent of the dairymen and 90 percent of the milk produced
in California. The Alliance recently adopted a resolution stating as its
position that dairy products should be exempt from the GSP program. We
THE ALLIANCE as ^ L vou to ' cee P tms P ^ 011 in mind as the Congress considers the
♦ of ([sun mti piooiKfts «■reauthorization of the GSP program. If the Congress determines to make
policy changes in the program, we strongly urge you to support an
exemption for dairy products.
Sacramento. CA
As you know, the federal government operates a support program for U.S. -produced
milk. The 1990 Farm Bill made U.S. dairy producers financially responsible for support
program purchases in excess of 7 billion pounds milk equivalent. Under the 1990 Budget
Reconciliation Act, U.S. dairymen pay assessments which are used to offset dairy
program costs. For these reasons, it is difficult to justify to U.S. dairymen that foreign
dairy products be allowed to enter the U.S. market duty-free when those imports will
take the place of domestic dairy products - and thus lead to domestic producers not only
losing market to these imports, but essentially paying for their impact on support program
outlays as well.
The U.S. dairy industry is moving toward a more market-oriented approach. The
ongoing negotiations in the Uruguay Round of the General Agreement on Tariffs and
Trade (GATT) are addressing the support structure for the dairy industry of the U.S., as
well as that of other countries. The GATT negotiations are clearly the appropriate forum
to address the relative treatment of subsidized commodities by the various member
countries. Such a complicated and multi-faceted analysis cannot be adequately or fairly
handled on a piece-meal basis in the context of the GSP program.
The Alliance of Western Milk Producers appreciates your attention to this matter. If we
can provide any further information on our position, we will be pleased to do so.
Sincerely,
C-James E. Tillison
Executive Director/CEO
016)449-094]
+49-9046
102
The Aluminum Association
900 19th Street. NW Phone (202) 862-5100
Washington. DC 20006 Fax (202) 862-5164
April 20, 1993
The Honorable Dan Rontenkowski
Chairman, House Ways and Means Committee
U.S. House of Representatives
Washington, D.C. 20515
Dear Mr. Chairman:
The U.S. aluminum industry, an ardent supporter of the
Uruguay Round multilateral negotiations, applauds The Clinton
Administration's decision to seek renewal of "fast-track"
authority. We are also hopeful this extension will bring about a
successful conclusion of these most important international trade
talks.
Member companies of the The Aluminum Association believe
that the future of the U.S. industry absolutely depends on their
ability to compete in the international market. As you know, we
have been an active player in the Uruguay Round negotiations and
were an early supporter of zero-for-zero tariffs.
We continue to support the removal of all trade barriers.
An open, fully accessible world market for aluminum is in the
best long-term interests of all aluminum producers, fabricators,
and consumers.
We are vitally concerned about the outcome of the
international trade negotiations and stand readv to work with you
on this and other issues of importance to the U.S. aluminum
industrv.
-?iX*~r
David N. Parker
President
103
American Automobile Manufacturers Association
1620 Bye Street N.W.. Suite 1000 • Washington. DC 20006
TeL No. 202-775-2700 • Fax No. 202-775-2710
April 28, 1993
The Honorable Dan Rostenkowski
U.S. House of Representatives
Washington, D.C. 20515
Dear Mr. Rostenkowski:
The American Automobile Manufacturers Association (AAMA), the trade association for
the domestic automobile industry, urges you, as a member of the House Ways and Means
Committee, to quickly approve the extension of the Generalized System of Preferences (GSP)
program before its expiration on July 4, 1993.
AAMA's member companies, Chrysler Corporation, Ford Motor Company, and General
Motors Corporation, have supported the GSP program for many years. All three companies rely
on GSP to make our products more competitive in the global automotive market. If GSP benefits
are allowed to lapse in July, our companies' costs will increase and reduce the competitive gains
U.S. automakers have made in recent years.
AAMA asks your quick consideration and approval of GSP extension. If you have any
questions about GSP as it relates to the automotive industry, please call AAMA at (202)775-
2742.
Sincerely,
"WVK^'HIV
Thomas H. Han na
President &
Chief Executive Officer
THH/de
Chrysler Corporation • Ford Motor Company • General Motors Corporation
104
TESTIMONY OF THE AMERICAN CORN GROWERS ASSOCIATION
I am Carl L. King from Dimmitt, Texas. I am a farmer and I
am also the Chairman of the American Corn Growers Association.
I appreciate the opportunity to submit written testimony to
the Subcommittee on Trade in regard to the President's decision,
announced on April 9, 1993, to seek legislation to extend Congressional
"fast track" trade agreement procedures to an implementing
bill for the Uruguay Round of multilateral trade negotiations.
We have always been concerned about NAFTA and GATT and we certainly
did not endorse "fast track" in the first place. We finally
got to see some of the trade agreements that were drafted secretly
for many years and we feel that the farmer will not receive
the benefits that other sectors of the economy will receive.
Agriculture is the biggest single industry in the United States
and yet is has been overlooked not only in regular ag legislation
but also in the Omnibus Trade and Competitiveness Act as well.
We feel that Mickey Cantor, the new Trade Representative, should
certainly produce a fairer shake at any trade agreement than
we had under the past two administrations.
Until both agreements are completely rewritten, we do not feel
that agriculture will get a fair trade agreement. We do not
believe that there is any such thing as free trade, it has
to be fair trade. We are already sending corn to Mexico on
a monthly basis. The biggest concern that we have is Section
22 in these agreements. NAFTA and GATT are compatible in relation
to Section 22. Of course, sugar is really concerning corn
farmers as well as sugar beet and cane producers.
105
The way that GATT and NAFTA are written now with no point of
origin and doing away with Section 22' s, it would certainly
leave Mexico as a broker country to ship into the U.S. from
all South American countries, including Cuba.
We are in an area in West Texas where we have a large milling
operation making fructose corn sweeteners. Holly sugar also
has a plant in Hereford, Texas with receiving stations for
sugar beets within a twenty mile radius. This would certainly
have a devastating impact on these industries all over the
United States.
These are just a few examples of problems in GATT and NAFTA
that would drastically affect agriculture. We urge this committee
to reject the "fast track" agreement until a complete new agreement
is written allowing the producers to give their input. I am
enclosing a review that was done on the proposed NAFTA treaty
that was written in October by one of my close associates.
Thank you for your time.
106
American Corn Growers Association
P.O. Box 18157
Washington, D.C. 20036
(202) 835-0330
218 E. Bedford
Dimmitt. Texas 79027
1-800-666-8506 or
(806) 647-4224
Carl L. King
Tens
CHAIRMAN OF THE BOARD
Gary Goldberg
Hetmki
FIRST VICE-CHAIRMAN
Doug Higgins
Tun
SECOND VICE-CHAIRMAN
Sam Darwin
Alabama
SECRETARY-TREASURER
MEMBERS OF THE BOARD
Jerry Glover
Teus
John Little
Illinois
Charles Pyatt
lowi
Keith Dittrich
Nebraska
Bart Kaderty
OMe
Bert Williams
New Mexico
Larry Coomer
Indiana
Virgil Thompson
Ohio
ADVISOR
Vic Tomka
Iowa
John E. Ford
Director
Congressional and
Public Affairs
Washington. DC.
Oan Nines
Director
Public Affairs
St. Louis. MO.
October 19, 1992
Review of the NAFTA proposed treaty
I. OVERVIEW
I have included in this packet approximately 25 pages from
the 2,240 pare NAFTA agreement signed by the President.
The purpose of these pages is tc give you an overview of
the 22 chapters of the agreement, as well as numerous
annexes and exceptions to the agreement itself. A portion
of the agricultural chapter has been included so you can
see hov; this agreement is worded.
While I reviewed the entire agreement, I especially
focused on tne following chapters:
A. Chapter 1-Ob^ectives
B. Chapter 3-Rule's of Origin
C. Chapter 6-Snergy '
D. Chapter "-Agriculture (including phytosanitary
measures)
E. Chapter 12-Cross Border Trade in Services
F. Chapter 17-Intellectual Property
G. Chapter 19-Dispute Settlement
H. Chapter 21-Exceptions
Since many trade associations, congressional staffs and
agricultural groups have now reviewed this treaty, I have
approached my review not to redo theirs, but instead to
look for provisions that you would care about that have
not been discussed generally or even revealed.
107
Pleas* understand that ay comments in this memo are not
intended to be argumentative , partisan, cr opinionated.
Ho-*ve- it is a fact that trade agreements negotiated By
the "Reagan and Bush administrations, such as the Canadian
Fr^e Trade Agreement and earlier versions of the GATT
treaty, have'been done in total secrecy. Congress passed
th* Canadian acreement with only a hanoful of members
fcft^v-ag what •..•is in it. USTR's strategy cr. these types of
agreements is to negotiate them in secrecy, a.-.c then get
r ngr*j. to aoree to either vcte them up or down. ( z*: -
track") On HAFTA, however, with work that your board nas
done and wcrk by most of the other ag'iculjurai
organisations
the C ongressicnal leadership of bcth
;jrtiis hts been r-r..«- -•■>v» - *••» - . ••-.
use reus
'h* T:?£, in testimony before the :cngres; »..- - ^— ;
letters tc the Congress, has never ^^bied :cr /JJ 1 *:"* '"
enabling legislation ." The'TCPm! however, has asked
.ions or
This
v ; u m i o h t rare a ;
numerous questions i.".o cam:
is'Vvery ippropriate"and legal function of this board.
Wher* I appear critical of USTR cr the Administration, It
is simply observations based on fact, and =n 20 years or
experience in dealing with these matters, «** «"" - nd
outside of the Administration. My motive is simply to
»w. K« - -i lraf-h^rs so that vou can cnoose as a
inform you, the boa.o memoer.3, »« tuoc .««
board what actions you want to take.
II. GATT COMPATI BILITY
It is shocking to me that in all of the thcusands of
speeches and written words by the Administration and
Congress about this agreement, no one has talked about the
scores of provisions in the NAFTA agreement that â–
incorporate, cr require compatibility with, the General
a- r . ft „.-. t 3r -ariffs and Trade. I think this is the ,air.
concern that vou as a beard should be wcrr
. — • a .
108
Throughout the NAFTA agreement, there are numerous
provisions that require this treaty be interpreted
consistent with either the general provisions of GATT , or
in many cases with specific titles or provisions of GATT.
It is a statement of the obvious, since the agricultural
provisions of the GATT negotiations are as of the date
this memo in a deadlocked situation, that Congress could
possibly be asked to vote on this treaty next year without
even knowing what the incorporated GATT previsions would
be. Added tc that is the strong opposition of many
agricultural groups about the Administration's motives
regarding support levels for U.S. agriculture. The
strategy of USTR in such GATT "compatibility requirements"
regarding NAFTA becomes obvious.
As stated, there are many requirements of GATT
compatibility in the NAFTA agreement, but let me lust set
out several ;f these so that there can be no question
about this issue. The page citations follow:
A. "Each party shall comply with Annex 704.2 with respert
tc tariffs ana quantitative restrictions, including GATT
market access requirements and trade in sugar". (Page 7-2)
B. "The parties recognize that domestic support measures
can be of critical importance to their agricultural
sectors but may also have trade distorting effects and
effects on production. The Parties further recognize that
domestic support commitments may result from the
agriculture negotiations in the Uruguay Round of
multilateral trade negotiations under the GATT.
Accordingly, to the extent a Party decides to support its"
agricultural producers, such Party should endeavor to move
toward domestic support policies that: (a) have minimal or
no trade distortion effects or effects on production; or
(b) are exempt from domestic support reduction commitments
under the GATT." (Page 7-2)
C. "...tc the extent a tariff applied by =
party ... exceeds the applicable bound rate ;f duty for that
agricultural gcod as set forth in its GATT Schedule of
Tariff Concessions ... the other Party hereby waives its
rights with respect to the applicable bound rate of duty
under GATT Article II..." (Page 7-10)
109
D. "If the GATT Uruguay Round Agreement on Agriculture
enters into force with respect to a Party, pursuant to
which that Party has agreed to convert its quantitative
restrictions into tariff quotas, that Party shall ensure
that the over-quota tariff rates it applies to
agricultural goods of the other Party are not greater...".
(Page 7-11)
E. "Subject to this Section, Canada and Mexico
incorporate their respective rights and obligations with
respect to agricultural goods under the General Agreement
on Tariffs and Trade (GATT) and agreements negotiated
under the GATT, including the rights and obligations under
GATT Article XI". {Page 1-19) NOTE; This provision, in ray
judgment, incorporates the entire GATT treaty into NAFTA.
F. "Paragraph 1 (Agricultural Grading and Marketing
Standards. 1 shall be without pre-udice to the rights of
either the United States or Mexico under the GATT...".
(Page 7-2?)
III. CPRM
A. NAFTA assures the U.S. a 2.5 million metric ton duty
free quota for corn that will increase by 3 percent each
year. The over-quota tariff for U.S. corn will be reduced
to rero by the end of the 15 year transition.
B. The NAFTA will guarantee the U.S., for corn exports
above the 2.5 million metric tons, a high initial tariff
that will be gradually reduced by 24 percer.t in the first
6 years, then reduced to zero in the following 9 years.
C. The Mexican-imposed 15 percent seasonal tariff on
sorghum will be eliminated immediately.
D. In the 1980's, the U.S. supplied 80 percent of
Mexico's corn imports. The 1989-1991 average was 2.6
million metric tons, but in 1991 the U.S. exported only
1.1 millior. tons of corn to Mexico.
E. The Administration states that because of NAFTA, corn
exports to Mexico will increase 50 percent over the 15
year period, that U.S. revenues will increase S400-450
million dollars, and that there will be a 5 cent increase
in the cash price for corn.
no
IV. WHEAT
A Mexico currently licenses durum wheat and other wheat
imports. Under the NAFTA, Mexico will eliminate its
licenses for all wheat immediately and apply, instead, a
tariff of 15 percent which will be reduced annually to
zero over a 10 year period for durum, and £ years for
other wheat.
B. Mexican wheat imports from the U.S. have been
variable, ranging from 50,000 tons in 1982 to about 1.2
million tons in 1988.
C The Administration states that because cf NAFTA, at
the And of~th* transition period U.S. wheat exports to
Mexico are expected to be consistently in the 1.0 to 1.5
million metric ton ranee, a 40 percent improvement. The
revenue increments are expected t. be small, pernaps 30
million dollars.
V. SUGAR
A There is a lot of confusion about sugar. First off,
at page 7-11 of the NAFTA agreement, is found, "The United
States shall not adopt or maintain, with respect to
imports into its territory of agricultural goods
originatina in the territory of Mexico, any fee applied
pursuant to Section 22 of the Agricultural Adjustment Act
of 1923, or any successor statute."
B. The NAFTA provisions allow for a 15 year transition
period for the U.S. to "harmonize its sugar price with
that of the rest of the world".
C. Mexico will eliminate its sugar import permit
requirement, and the variable levy will be adjusted to
bridge the gap between the target price and the world
Ill
D. However, all of this is dependent on Mexico becoming a
net sugar exporter, which the agreement certainly
encourages through the tariff system, and, of course, that
it must be GATT compatible. The current U.S. position in
GATT is to eliminate Section 22, the basis for all of the
above .
VI. CATTLE AN2 BEEF
A. Currently, the U.S. imports around 1 million feeder
calves per year from Mexico, while shipping about 140,000
head of mostly slaughter cattle to Mexico. The U.S.
exported €4,000 tons of beef to Mexico in 1991, while
importing less that 1,0C0 tens from Mexico.
E. The U.S. Heat Import Law will no longer apply to
Mexican beef exports to the U.S.
C. Under NAFTA, the U.S. will immediately eliminate its
tariffs. Imports of beef from Mexico will receive similar
tariff treat: k e : ~ t as beer from Canada.
D. The Administration states that under NAFTA,
U.S. -Mexican cattle trade will likely increase in both
directions. By the end of the transition period, U.S.
prices for cattle and beef will likely increase by about 1
percent (50.50 to SI. 00 per hundred weight' and industry
revenues will increase by S200-S400 million compared to no
NAFTA.
E. The Texas Cattle Feeders Association and Texas and
Southwestern both support NAFTA. However, there are those
who fear a large increase in cattle slaughtering and
processing in Mexico, perhaps with foreign capital from
Japan.
VII. COUNTRY OF ORIGIN REQUIREMENTS
A. This is a critical issue, because cf the fear of
barter or transshipment of such commodities as sugar and
corn into Mexico, and then into the U.S. The question has
been whether we are negotiating a free trace agreement
with Mexico, or with all of Central and South America?
112
B. It is impossible to get a real handle on the rules of
origin requirements, because the NAFTA treaty makes so
many references to and incorporations of agreements and
earlier treaties that are not included in the NAFTA text.
C. The NAFTA appears to be fairly tough on rules of
origin in the general provisions, but the concern is that
there is approximately 40 pages of exceptions.
D. The general provisions are that the good is wholly
obtained or produced in the territory of one or more of
the Parties, or that its transformation is no more than 7
percent 'with a complicated formula to arrive at that
conlusicn). However, there are, as I said, numerous
exceptions. This is an area where I would urge many
questions and strong caution.
VIII. EXPORT SUBSIDIES
A. The NAFTA determines as a fact that expert subsidies
are trade distorting.
B. The treaty eliminates all export subsidies between the
three countries.
C. As the NAFTA is GATT dependent, the negotiations in
GATT would alsc apply.
IX. PHYTOSANITARY, SANITARY AND FOOD SAFETY ISSUES
A. This is commonly recocnired as one cf the real
problems in the NAFTA agreement. The parties could not
agree in their negotiations, so they simply left it for
separate legislation.
B. The agreement states "...each Party may in protecting
human, animal or plant life or health, establish its
appropriate level of protection in accordance with Article
757. " (Page 7-25).
C. The above provision is, of course, meaningless. The
trouble is that Mexico has very tough environmental and
food safety laws, but does not, and will not in the
future, have the resources to enforce such laws. Chairman
de la Garza has stated publicly that this matter will be
dealt with in separate legislation.
113
X. JOBS-JOB TRAINING
A. In the middle of a presidential campaign, it is
difficult to get an accurate handle on this issue.
B. The Administration has stated that NAFTA would result
in the loss of approximately 150,000 U.S. jobs, but will
be the basis for the creation of 400,000 new jobs over the
15 year transition period. These figures are challenged
by other groups. The three categories of highest job loss
would be in auto manufacturing, textiles, and agriculture.
C. In October, the President announced a 2.5 billion
dollar jobs retaining program, mostly because of NAFTA.
The Clinton campaign says it will take more than 10