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Ambassador Kantor. As I said before, as a member of the Flor- 

 ida bar, and as someone who has Hved and worked in southwest 

 Florida when I was very young, the fact is that I am aware of these 

 problems, we are sensitive to them at this office, and the President 

 is sensitive to them. We understand that there is a sense of a lose- 

 lose situation. I think with the proper supplemental agreements 

 and with the proper advocacy we can make this a win- win situa- 

 tion, even for Florida agriculture, about which we are deeply con- 

 cerned. 



I have talked to a number of people in your delegation and your 

 Senators about this. But rest assured that we are acutely aware of 

 your concerns and will continue to address them as we go forward. 



Mrs. Thurman. I am going to hold you to that. 



Ambassador Kantor. I know you will. 



Mr. English. Mr. Condit. 



Mr. Condit. Mr. Ambassador, we are honored to have you here 

 with us today. As a fellow Californian we are particularly honored 

 and proud of the work you have done in the trade area as well as 

 other work you have done over the past year or so. We are ex- 

 tremely proud of you. 



Coming from California, I know that you're aware of one of the 

 issues I am concerned with, which is the wine provision in the 

 NAFTA agreement. As you are aware, California produces 90 per- 

 cent of all the wine in the country and is responsible for about 95 

 percent of the wine exported from the United States. 



The North American Free-Trade Agreement gives U.S. wine a 

 general tariff phase-out of 10 years with a tariff reduction of 2 per- 

 cent per year over the next 10-year period. The wine industry 

 should be a preferred trading partner with Mexico under the North 

 American Free-Trade Agreement. However, in the pact with Chile, 

 which was implemented in 1992, Mexico agreed to cut the tariff on 

 the Chilean wine immediately from 20 percent to 8 percent and 

 eliminate the remaining part of that over the next 4 years. 



As you know, the wine industry and the people from California 

 feel that the Chilean wine is a major competitor for California. As 

 of January 1, 1993, the Mexican tariff on Chilean wine has been 

 reduced to 6 percent. By 1996, the Chilean wine will enter Mexico 

 duty-free and the United States wine will enter Mexico with a 14 

 percent tariff. 



To get to the point, we don't believe that is a fair playing field 

 for the wine industry, which is extremely important to the economy 

 of California, particularly important to the economy where I live in 

 California, the Central Valley. In search for votes for the North 

 American Free-Trade Agreement, I just wanted to bring this up so 

 that if there is a way of dealing with this issue we would encourage 

 you to do that and try to find some fairness and level the playing 

 field. 



Ambassador Kantor. As you know, Mr. Condit, I have had dis- 

 cussions with leaders of the wine industry in California. Many of 

 them are close friends. 



There is an acceleration clause m the NAFTA itself, assuming it 

 goes through all the necessary requirements to be enacted and goes 

 into effect. We would have the right to begin immediate discussions 

 to accelerate the decrease in tariffs at that point. You can rest as- 



