55 



damage determination, places insurmountable burden to proving 

 the damage. The bilateral safeguard contained in the NAFTA 

 agreement talks about threat of injury as opposed to actual dam- 

 age. I think that might be an extremely important distinction if we 

 are to arbitrate these in a fair manner going forward. 



My time has expired, Mr. Ambassador. Thank you very much. 



Ambassador Kantor. Thank you for your kind remarks. I appre- 

 ciate that. 



Mr. English. Mr. Goodlatte. 



Mr. Goodlatte. Thank you, Mr. Chairman. I have no questions. 



Mr. English. Mr. Bishop. 



Mr. Bishop. Thank you very much, Mr. Chairman. 



Mr. Ambassador, I am from the peanut-producing area of the 

 country, the State of Georgia, where 45 percent of the country's 

 peanuts are grown, 90 percent of which are in my district. 



Under the NAFTA and based on continuation of the current sup- 

 port price policy, the domestic quota of peanuts in the United 

 States, the world price for peanuts, plus the proposed tariff would 

 be equal to less than the support price in the second or third year 

 of the North American Free-Trade Agreement. The economic im- 

 pact on the United States peanut industry could increase substan- 

 tially if Mexican farmers and even United States investors in Mexi- 

 can agriculture start producing peanuts for export to the United 

 States. 



Lost revenue to the U.S. peanut farmers would easily reach $75 

 million to $100 million annually soon after NAFTA becomes oper- 

 ational. The economic impact on local rural communities in peanut- 

 growing areas would be substantial. It is estimated that it will 

 more than double the amount of lost revenue, which would mean 

 $150 million to $200 milhon. 



I would like to know whether or not the side agreements will 

 contain any provisions to ameliorate or eliminate this drastic eco- 

 nomic impact on U.S. peanut farmers and on the rural commu- 

 nities in which they live. These communities are tied to the farm- 

 ers, the farm bankers, the crop insurance people, the feed and seed 

 people, the fertilizer people, and so forth and so on, with a domino 

 effect. 



Ambassador Kantor. Let me address that in a couple of ways. 

 I appreciate your comments. 



Even though it wasn't this administration, I think there was 

 some sensitivity to peanuts in the negotiations. Let me just indi- 

 cate that the volume in metric tons of peanuts shipped to Mexico 

 in 1989, 1990, and 1991 is quite substantial and the coming in is 

 quite limited, as you know. 



Mr. Bishop. As of right now. 



Ambassador Kantor. That's correct. I understand that. I also un- 

 derstand that you are raising an issue which concerns the future, 

 and I appreciate your concern. 



The rules of origin are very strong and very strict in terms of 

 peanuts as well as other commodities. No. 2, there is a 15-year 

 phase-out on the tariffication of our quotas on peanuts, which gives 

 us a very long phase-out period, which is protective of the industry 

 itself. 



