49 



metric tons and it goes up after that, but the net production has 

 to increase. 



I went through earUer that in the sugar area production in Mex- 

 ico has gone down in the last few years. But there is no agreement 

 other than what you have seen in the NAFTA as signed by Presi- 

 dent Bush on December 17. All that we have said in this adminis- 

 tration is that we understand the concern about substitutions of 

 fructose, which might lead to the assumption of more net produc- 

 tion therefore more exports into the United States. 



We said that we will look at that problem seriously, and we are. 



Mr. Barrett. Do you anticipate any kind of an agreement? 



Ambassador Kantor. With all due respect, and I hope with some 

 sensitivity to my position as a negotiator, we are looking at it seri- 

 ously. It is not a subject that has been unstated to our trading 

 partners, and we will follow up on it. I don't think I should go any 

 further than that. 



Mr. Barrett. I understand. Thank you. 



Mr. English. Mr. Ambassador, I may have some written ques- 

 tions as well. Mr. Barrett was referring to some questions he want- 

 ed to submit, and I am sure other members of the committee will, 

 too. So we would appreciate it if you would consider those written 

 questions and get a timely response to our office. 



Mr. Roberts. 



Mr. Roberts. If the chairman would yield, I have a statement 

 and questions that are submitted by Congressman Crapo of Idaho. 

 I would like to ask permission to insert those, Mr. Chairman. 



Mr. English. Without objection, his prepared statement will ap- 

 pear in the record. 



Ms. Long. 



Ms. Long. Thank you, Mr. Chairman. 



Welcome, Mr. Ambassador. It is good to have you here. 



I have a question regarding the NAFTA that I have not received 

 a satisfactory answer to date. What impact would the North Amer- 

 ican Free-Trade Agreement have on individual farm commodity 

 prices? 



Ambassador Kantor. Frankly, because it lowers tariff barriers, 

 as you know, quite substantially it may not affect prices directly. 

 It will certainly affect the amount of our sales into Mexico, which 

 has become a very large importer and consumer of United States 

 agricultural products. So in that extent, it may affect prices be- 

 cause of a supply and demand situation. 



I am certainly not an agricultural economist, so I cannot tell you, 

 but it will have a very profound effect on farm income. For exam- 

 ple, GATT will increase farm income from $1 to $2 billion, which 

 is substantial. We believe it will also have a profound effect on 

 farm income with agriculture, assuming that we get these supple- 

 mental agreements that make sense and all the criteria I have 

 mentioned before. 



The fact is that I am not sure it will have a direct impact on 

 prices, but it certainly will have a direct impact on sales. 



Ms. Long. I think it would be helpful if you were to conduct a 

 study and do some research to make some projections on individual 

 commodity prices. When you talk about increasing farm income by 

 $1 to $2 billion, you're looking at figures in the aggregate, v/hich 



