33 



modate the concerns raised here today with respect to Canadian 

 subsidization. Now, when the time comes that we do that, which 

 I hope is soon, then it is a different situation. But in the absence 

 of having resolved that problem, Senator, we did not want to leave 

 U.S. producers in the situation where we could not use EEP to ship 

 wheat to Mexico. 



Senator Daschle. Well, I understand 



Ambassador Kantor. May I say it one more time? 



Senator Daschle. Yes. 



Ambassador Kantor. I am going to be as clear as I can be. We 

 could take it to dispute resolution and try to enforce our rights 

 under that provision. "Inappropriate" is not as strong a word as I 

 would have liked to have negotiated. So that is not there at the 

 time. But the fact is we could take it to dispute resolution. That 

 is the best I can do, and let me not mislead you or any other mem- 

 ber of this committee. That is the best we could do under these cir- 

 cumstances. 



Senator Daschle. I agree with you, Mr. Ambassador, that we 

 could take it there. But I must tell you, I think any board looking 

 at this language would say, look, it says it is inappropriate, which 

 means, as Mr. O'Mara has interpreted it, it is not a good idea, but 

 it is not illegal, it is not strictly prohibited. 



It leads me to my next point, which is, if that is the case — and 

 I think Mr. O'Mara just laid it out as well as he can. If it is not 

 a good idea but not expressly prohibited, our only option is to take 

 unilateral actions, the likes of which Senator Conrad has been talk- 

 ing about and what I hope will be done in the very near future. 



We have to have some clear understanding as to what actions we 

 can take short of taking the dispute for some kind of international 

 reconciliation. That isn't going to happen given the language we 

 have. 



The second question I have is how we define export subsidies and 

 what effect that would have on other tools we use besides EEP. Not 

 only export subsidies, but what would it do, for example, to the 

 Acreage Reduction Program? Could that in any way be interpreted 

 as something that the United States could not continue to do? 



Mr. O'Mara. No, sir. 



Senator Daschle. So there is no dispute about that? 



Mr. O'Mara. No. 



Senator Daschle. Okay. The problem also is addressed with re- 

 gard to inspections. As some of you know, we have had problems 

 in the bilateral negotiations with Canada on the appropriateness of 

 reinspecting Canadian meat. Is there any misunderstanding in 

 your view with regard to the right of this country to continue to 

 use all of its means for inspection of meat imported from Mexico 

 under this agreement? 



Mr. O'Mara. Not to my knowledge, sir, no. There would be no 

 reason why we couldn't do that. As far as I know, no. But I would 

 have to check to be absolutely sure. But to my knowledge, there is 

 nothing in this agreement that would prohibit us from doing that. 

 The FSIS will continue to operate as it now does, in terms of meat 

 inspection in Mexico and in Canada, and the NAFTA would not ab- 

 rogate that or reduce the effectiveness or in any way change what 

 FSIS does. 



