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to have programs and tools that allow it to combat unfair foreign 

 trade practices and trade-distorting subsidies. USDA programs to 

 offset unfair foreign subsidies, and trade policy tools like 

 Section 301 of the Trade Act of 1974 (19 U.S.C. 2411), as amended, 

 which allows retaliation against unfair trading practices, should 

 remain an important component of a U.S. agricultural trade 

 strategy. 



In addition, even in a world with reduced barriers, market 

 imperfections will continue to exist. Certain developing countries 

 may be weak credit risks or lack hard currency but still have long- 

 term potential as future cash customers for U.S. agricultural 

 products. To overcome these imperfections, and to provide maximum 

 export opportunity for U.S. producers, USDA may have to continue to 

 use tools such as export credit guarantees in certain markets. 



ENSURING FOOD SECURITY 



One side effect of the U.S. production-oriented policies of the 

 past was that the United States invariably ended up holding large 

 carryover stocks of staple grains. These inventories contributed 

 to world food security by ensuring that in the event of drought or 

 other natural disaster, stocks would exist that could cover a 

 shortfall in production. If the shift to a market-oriented 

 approach leads to a reduction in surplus U.S. production and 

 related carryover inventories, the United States might not have 



