35 



that we really do try to create an equitable opportunity, because 

 that's all my folks are asking for. 



Ambassador Kantor. I appreciate that. The President said in his 

 speech that we're going to "compete, not retreat." He has great con- 

 fidence, as you do, not only in American workers but American 

 farmers. 



Let me talk for a moment if I could, Mr. Chairman, to respond 

 to that, because I think it's really a critical question that Mr. 

 Dooley has raised here. 



Let's take the EC, for example. As you know, for years they have 

 had variable levies which in fact raised the price of goods coming 

 into Europe above the world market price and make it almost im- 

 possible to compete, although it's amazing that our farmers con- 

 tinue to do fairly well even in face of that. Their internal supports 

 are about $48 billion. Their export subsidies are about $13 billion, 

 whereas ours are about $1 billion, I think, in 1991. They have enor- 

 mous advantages, not only in operating here in this market be- 

 cause of those factors in keeping our farmers out of their markets, 

 but also in terms of third markets where we compete with them. 



It should not go unnoticed that in 1975 the Europeans were the 

 greatest net importer of agricultural products in the world, and by 

 1985, because of what I just mentioned, Mr. Chairman, they were 

 the greatest net exporter of agricultural goods due to these sub- 

 sidies and internal supports and variable levies and other matters 

 that they have used. 



Now, what we need to do in the Uruguay Round, Mr. Dooley, is 

 have a good, effective market access package. Now, there has been 

 some positive movement. In the Dunkle text itself, over 6 years we 

 lower by 20 percent internal subsidies on the 1986-1988 base. That 

 will help. In the Blair House agreement we lowered export sub- 

 sidies by 21 percent over 6 years, which will help, of course. 



I have to say quickly that it does not close the gap, but at least 

 it puts us in a better competitive position than we are today. But 

 it is market access that really makes the difference. We have to in- 

 sist on disaggregation. We have to insist that we don't start at a 

 lower base than we are at today. 



It was interesting that on January 2, when my predecessor met 

 with Sir Leon Brittan, he suggested that in market access we start 

 at a lower base for agricultural products than we are at today. 

 That was somewhat stunning, and to her credit, of course. Ambas- 

 sador Hills rejected that, as any good USTR would, and she was 

 a good one. 



So we have opportunities; we have concerns. I think the NAFTA 

 is a big net winner if we can get these supplemental agreements, 

 Mr. Dooley. But you can rest assured that this USTR under this 

 President will be advocating for U.S. agriculture every chance I get. 



Mr. Dooley. Just to follow up, we really believe strongly that the 

 EEP and the MPP are real tools which we can use to address some 

 of these unfair barriers and we hope the administration will be 

 willing to use those aggressively when conditions merit them. 



Ambassador Kantor. Every time we have a chance to open mar- 

 kets and expand trade, we're going to do so, and we're going to use 

 every tool at our disposal. 



