42 



Mr. Bovee. By and large. 



Mr. Penny. Is there any indication that your member groups or 

 member entities are going to be doing more processing in the near 

 term? 



Mr. Bovee. With certain commodities, meat products, but in 

 other types of shelf items which we believe that there is a demand 

 and a market for, we would probably be restricted from that mar- 

 ket. 



Mr. Penny. Carol, we discussed with the previous panel the need 

 for some bilateral agreements to deal with phytosanitary problems, 

 other sort of narrow trade impediments that aren't necessarily ad- 

 dressed in the General Agreement on Tariffs and Trade. Where do 

 you see the greatest need for us to focus those bilateral trade ef- 

 forts? 



Ms. Brookins. I think that we are going to have to focus them 

 in several areas. One, the sanitary and phytosanitary implementa- 

 tion under the Uruguay Round in terms of sound science, I think 

 we are going to have to be willing to bring trade cases if we need 

 to, if countries — for example, if the Europeans try to keep out our 

 dairy products where we have just negotiated access, because of 

 bST. If we cannot resolve the hormone issue in terms of meats into 

 Europe, we are going to have to do that. 



And I think for countries, having negotiated more open trade and 

 are being forced to bring down those trade barriers, the 

 phytosanitary area is going to be a very key area. We are going to 

 have to establish a whole body of precedent in international law. 



Two, I think we have a big problem on our hands in an 

 unaddressed subject, which is causing a hullabaloo right now 

 across the border. And that has to do with state trading and state 

 trading monopolies. There was an attempt in the Uruguay Round 

 to try to create some control over the way state trading monopolies 

 operate. 



If somebody wants to have a state trading monopoly or a Govern- 

 ment board or whatever, they should be able to have it. But it was 

 really trying to put some constraints on the way they operate. And 

 I think that is at the heart of our current problem with Canada. 



I think we are going to have to negotiate in this area in the fu- 

 ture, because as we start bringing down our export subsidies in a 

 transparent way with the United States and European Union, 

 countries that operate state trading with pooling practices or state 

 import monopolies where they buy our product at world market 

 prices and then sell it in the domestic market at 10 times world 

 market prices which limits demand growth, I think we are going 

 to have to really tackle that issue in the area of competition policy. 



I think we are going to have to be particularly mindful in Asia. 

 And certainly a third area would be as the European Union gets 

 bigger — there are going to be four countries added to it at the end 

 of this year and they are also working on negotiating — they have 

 already negotiated — kind of — preferential agreements with many 

 countries in Eastern Europe; they are talking about FTA's with 

 Eastern Europe and North Africa — we are going to have to make 

 very sure that they have to pay due compensation in any areas 

 that they are keeping us out. 



