8 



Currently, Importers have to market through their domestic co-op. Also, 

 the Koreans have not officially accepted GATT rules of trade for beef. In any 

 event, prospects for keeping and expanding this market are extremely 

 favorable . 



The success stories of Japan and South Korea hold for other Pacific 

 markets such as Malaysia, Thailand, Philippines, Singapore and Hong Kong. The 

 region Is experiencing strong growth in both economic and population. 



However, one of the greatest potential markets Is right at our back 

 door. I am speaking, of course of Mexico. 



The proposed North American Free Trade Agreement will prove valuable to 

 the livestock industry generally, and the beef industry specifically, for a 

 number of reasons. 



It will eliminate the potential for tariffs on US beef like the ones 

 imposed by Mexico in December. Our competitors In Europe, Australia and New 

 Zealand will not have this advantage. 



When Mexico's economy grows so does their beef consumption. Mexican 

 beef consumption expanded 60 percent from 1986-89 as per capita GNP Increased 

 35 percent. This, coupled a population growth has dramatic consequences. 

 Mexico's population Is expected to go from 84 to 102 million by the year 2000; 

 that's quite a market. 



A cross-border market leads to a more efficient industry. By improving 

 carcass utilization, one USDA economists suggests we could see a 3-5 percent 

 price increase. 



And, while all this Is happening, It Is important to remember that 

 Mexico will have to improve its infrastructure to increase beef production 

 while we're ready to go right now. Our cattle industry is ten times the size 

 of Mexico's. 



I'm regarded as a shameless advocate of the beef industry, and I'm 

 comfortable with that role. However, my colleagues should understand that the 

 health of the beef industry has Implications for all of agriculture. Its 

 Important to remember that beef exports represent a value-added commodity, a 

 very popular concern these days. 



The 100 million head of cattle In this nation have to put on weight to 

 be profitable to their owners. They eat grain. When the beef Industry gets a 

 chill, the rest of agriculture gets a cold. 



Over 22,000 feedlots and 4,300 packing plants are backed by almost a 

 million cattle operations. The beef industry involves countless others In 

 transportation, retail marketing at home and, as I've mentioned, our export 

 sector. 



When we examine the full plate of Issues before us this year; FIFRA 

 reauthorization, Department reorganization, food safety, conservation 

 compliance, export credit guarantees, and all the others, we must keep one 

 critical thought In mind. The future of agriculture In America Is exports. 



We need to resolve GATT. We have to finish NAFTA. We need to keep EEP, 

 GSM 102 and 103, and MPP healthy. We must examine every policy decision 

 effecting agriculture with an eye towards international competitiveness. 



To do anything less is to undermine the future economic health of 

 agriculture and rural America. 



