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Senator Lugar. Ambassador Kantor, pardon me just a moment. 

 Mr. Chairman, I would like unanimous consent to submit a state- 

 ment of Senator Dole for the record. 



The Chairman. Without objection. 



Senator Lugar. Ambassador Kantor, revisiting just for a moment 

 the question of high fructose syrup and sugar, I appreciate the an- 

 swers you and Secretary Espy have given about the unlikelihood of 

 the Mexican soft drink industry converting to high fructose in the 

 short run. But let me just say generally that those of us who are 

 interested in corn farmers have a different perspective on the situ- 

 ation. In other words, we would like for Mexicans in due course to 

 consider high fructose syrup because our corn farmers produce, ob- 

 viously, corn that is used by the soft drink industry in this country 

 for just that purpose. 



Therefore, even though you may be under pressure from the 

 sugar people to try to contain high fructose usage and thus dis- 

 advantage corn farmers, I would gently push back from the corn 

 farmer side and indicate we are equally interested in keeping that 

 choice open to Mexican manufacturers. 



I would hope you would remain silent, neutral, in essence let free 

 trade work, and not only with regard to Mexico but with regard to 

 the competition that goes on from time to time, as you have no- 

 ticed, between corn farmers and sugar farmers in this country. 



I just make that point. You may already have come to that con- 

 clusion that you will remain neutral and silent, and I am hopeful 

 that will be the case. 



Let me ask this, however, with regard to another consideration. 

 We have had at least suggestions today that Section 22 might be 

 applied to Canadian wheat. Now, I iust want to think through for 

 a moment the analysis of the Canadian wheat situation in view of 

 the fact that our Export Enhancement Program would appear to 

 keep U.S. domestic wheat prices $30 to $40 a ton higher than 

 world prices. And, in fact, Mr. Secretary, you paid, according to my 

 records, a bonus of over $57 a ton for a sale to Morocco under the 

 Export Enhancement Program just last week. 



In effect, wheat is being priced as a feed grain and is selling at 

 a substantial discount to corn, which has not received EEP sub- 

 sidies. So my question is: Have wheat imports from Canada risen 

 because of the existing free trade agreement with Canada or be- 

 cause we deliberately — that is, the United States Government pol- 

 icy keeps domestic wheat prices more than $1 above the price the 

 Canadians can get almost any other place in the world? 



I think this is an important question. As we are berating the free 

 trade agreement with Canada, if by our own policies we inflate 

 wheat prices in this country to an extraordinarily attractive area, 

 it seems to me, dubious whether in the negotiations on the NAFTA 

 treaty we try to penalize the Canadians, having provided a situa- 

 tion that would make that flow a perfectly natural consequence. 



I would like a comment from either of you as to this situation 

 because clearly it is a big one. A suggestion has been made today 

 that Senators from wheat-producing States are very concerned 

 about this and putting some pressure on you to do something about 

 it. I just want the basis of your economic analysis on what you 

 might be prepared to do. 



