27 



deliberately raising domestic prices and then suddenly accusing the 

 Canadians of bad faith. Both may be true, but the mix of the situa- 

 tion is very important to analyze and make explicit, I believe. 



Secretary Espy. I think the answer to all of this ultimately is to 

 be found in the GATT agreement. 



Senator Lugar. That would be obviously very helpful. 



Secretary Espy. Yes. 



Senator Lugar. Let me ask you, Secretary Espy. Some constitu- 

 ents have written to me about statements of Mr. William J. Leh- 

 man, a USDA meat inspector in Montana, who testified before a 

 House panel in February alleging that U.S. meat inspection proce- 

 dures on Canadian beef are inadequate and that Australian beef 

 was being transshipped in the United States through Canada in 

 circumvention of the voluntary restraint agreement, and that by 

 implication the situation would only get worse under NAFTA. I 

 think it is important there be an official response to that allegation 

 by Mr. Lehman. 



Secretary Espy. Senator, I was briefed on that specific allegation 

 this afternoon, and some would even allege that Mr. Lehman suf- 

 fered some negative employment consequences because of these al- 

 legations. That is certainly not true. The gentleman was moved at 

 his request. But with regard to his allegation, that is certainly un- 

 true. Just completely untrue. 



Senator Lugar. Well, can you testify what type of inspection pro- 

 cedures would occur under NAFTA so that what Mr. Lehman has 

 charged with regard to the past would not be true in the future? 



Secretary Espy. We will not reduce or dilute or suffer any dimin- 

 ishment in our enforcement standards at present, Senator. The 

 Customs officials, in addition to the FSIS officials, will make sure 

 that we don't import any meat products or poultry into this country 

 that are adulterated or suffer any damage at all. And under the 

 NAFTA, that would not be reduced at all. 



Senator Lugar. Ambassador Kantor, my final question is a more 

 macroeconomic question. Two parts: To what extent does the suc- 

 cess of this hearing/ratification process we are now engaged in on 

 NAFTA increase our bargaining power with European countries or 

 Asian countries, both with regard to GATT or with regard to other 

 agreements we may need to enter into? And, likewise, the other 

 side of that coin, what would be the effect of failure of passage of 

 NAFTA on any potential success of the GATT negotiations that are 

 currently coming to a conclusion? 



Ambassador Kantor. There is no doubt in the President's mind 

 or in mine or anyone in this administration that the success of 

 NAFTA before this Congress would be tremendously helpful to our 

 position in getting a successful conclusion to the Uruguay Round, 

 the GATT round. We grow a bigger market. It is much more attrac- 

 tive. It is a trade preference zone. There is no way to say it any 

 more clearly than that. It is in our interest to do so, and we would 

 gain confidence in terms of the whole world that the United States 

 was not only opening its market but was cooperating with other 

 countries to open their markets and enter into successful trade 

 agreements, agreements that were good for all sides — as Secretary 

 Espy said, a win-win situation. 



