45 



Senator Boren. But it continues to apply — and this isn't a mat- 

 ter of a flaw in this current negotiating round but it is a flaw in 

 past negotiations that gives us trouble and undermines our credi- 

 bility with producers and processors as we go into this agreement. 



Is there anything that we can do about the loophole that now ex- 

 ists in that area with the Canadians? 



Ambassador Kantor. Other than reopen negotiations on this 

 particular product, no. That doesn't mean we can't. I would work 

 with you on that. You are absolutely correct it has to be 100-per- 

 cent home-grown Mexican peanuts in peanut butter from Mexico, 

 but not Canada. 



I can't explain why that was done, and I am not critical of it. I 

 am sure there was a legitimate reason. The NAFTA in many ways 

 is much stronger than the Canadian FTA. 



Senator Boren. Yes. 



Ambassador Kantor. And that is one of the reasons Canada did 

 not want to join into the agricultural arrangements under the 

 NAFTA as they had joined with us in the FTA. They had the FTA 

 agreement, which is not as strong in many aspects. 



Senator Boren. Well, I was looking at the figures in terms of the 

 tonnage going back and forth, both in terms of peanuts and cotton, 

 which our quota impacted potentially. And, of course, we are 

 strongly a net exporter in both areas to Mexico, Mexico being prin- 

 cipally an importer. So I think that in terms of those two commod- 

 ities there is a strong argument that can be made that NAFTA will 

 be beneficial in the long term. But I would urge you to see if we 

 can go back and look at some way of getting redress, because it is 

 the cause of some of the opposition in the agricultural community. 

 Some of my constituents have concerns, although I think by and 

 large the majority of the agricultural community supports this 

 agreement because they see many opportunities in it. But I think 

 that the loopholes in the Canadian agreement, really more than 

 anything else, the past insufficiencies are inflaming and causing 

 some of the opposition on the question of this agreement, even 

 though it is not responsible for the ongoing problems. 



Ambassador Kantor. Frankly, Senator, every time we don't en- 

 force our trade laws in other areas, we hurt our credibility in the 

 same way and the American people don't have as much confidence 

 in us. That is why this administration has tried to enforce those 

 laws in a fair but strong manner, in order to create confidence in 

 the American people that they will believe the agreements we 

 reach are in the best interests of our workers and our businesses. 



Senator Boren. Well, I commend you for that spirit, and I know 

 that is a hard line to draw, at what point does toughness cross the 

 line toward reigniting trade wars and protectionism. And let me 

 say that I think from my observation of the way you and your col- 

 leagues have conducted yourselves since the beginning of the ad- 

 ministration, I think there has been a vast improvement, and I 

 think you have walked that line very, very well. And I think that 

 you have increased the level of confidence that Congress has. That 

 is one of the reasons why in the past there have been attempts to 

 reduce the discretion the executive branch has in these areas. 



I think that when we have an administration clearly committed 

 to looking after our rights and enforcing those rights under existing 



