32 



Mr. O'Mara. We can certainly submit it. 



Senator Feingold. I would appreciate receiving just a little more 

 detail. I appreciate the answers. 2 



Senator Feingold. Thank you, Mr. Chairman. 



Senator Daschle [presiding]. The chairman has yet to arrive. As 

 I understand the order, I am next and then Senator Kerrey, Sen- 

 ator Harkin, and Senator Boren. 



Senator Conrad asked some very good questions along the lines 

 of those I was going to ask, but tnere is another related question 

 that I would like the Ambassador to answer for us, if he could. The 

 trilateral portion of the ag title, chapter 7, has a paragraph that 

 I think is very important, out somewhat unclear. The quote is: "It 

 is inappropriate for a party to provide export subsidies for an agri- 

 cultural good exported to the territory of another party where there 

 are no other subsidized imports of that good into the territory of 

 the other party." 



I am wondering what effect that has. Basically, if this were law, 

 if this were practiced by all three countries, we wouldn't have a 

 problem. And yet we are spending a lot of time talking about the 

 very fact that we anticipate serious problems. The Secretary talked 

 about it; Mr. Moos has just talked about the ongoing problem we 

 have with Canada. 



What does that paragraph mean? 



Ambassador Kantor. Well, the paragraph is fairly clear, I think, 

 on its face that if a country subsidizes in a particular product and 

 ships it into — let's say we subsidize and we ship into Mexico, but 

 Canada, or a third party, does not subsidize the same product, then 

 that would be a violation of the agreement. Therefore, it would be 

 subject to dispute resolution. 



Mr. O'Mara. If I could, Ambassador, the main reason that that 

 language reads as it does, in addition to what the Ambassador is 

 saying, is that because of this Canadian problem, this provision of 

 the agreement, and because that Canadian problem hasn't been re- 

 solved, this agreement permits us to use EEP for wheat in the 

 Mexican market. 



Senator Daschle. It is clear on the face of it, if the face of it is 

 what we all intend to adhere to. But clearly Canada is going to be 

 using a transportation subsidy, which in my view would be in di- 

 rect violation of the intent of this paragraph were they to continue 

 this practice after the NAFTA is consummated. But yet we are — 

 I am struggling here for a definition or some understanding as to 

 how Canada can continue to conduct themselves in that fashion 

 using subsidies to the degree we know they will, given language in 

 the trilateral portion of the ag title which states that it is illegal. 



Mr. O'Mara. It does not prohibit the use of export subsidies. 



Senator Daschle. Well, it says that it is inappropriate. What 

 does inappropriate mean? 



Mr. O'Mara. Not a good idea. [Laughter.] 



Senator Daschle. Is that the best we can do, to say that it is 

 not a good idea? 



Mr. O'Mara. Well, the language reads as it does, frankly, as a 

 defensive mechanism because we had not yet been able to accom- 



zThe information is retained in the committee file. 



