48 



the United States. This concern has been addressed. Any product 

 that does not meet the specific rules-of-origin provisions is excluded 

 from the agreement. 



In my opinion, dairy and beef will gain significantly under the 

 provisions of NAFTA. With the cost of capital at more than 20 per- 

 cent, lack of infrastructure, expensive inputs, there isn't much in- 

 centive for U.S. production to move south. 



So what does this mean to Vermont and dairymen in general? 

 Less pressure to downsize agriculture than there would be without 

 NAFTA; more U.S. jobs; more income in Mexico to spend on U.S. 

 value-added products. NAFTA allows for easier flow of value-added 

 products into Mexico. One-quarter to one-third of the Mexicans 

 have relatively high incomes, creating a market nearly the size of 

 Canada's for U.S. goods. As we heard earlier, Mexicans already 

 purchase more per capita from the United States than do the Japa- 

 nese or Europeans. 



Many U.S. products currently carry heavy tariffs. Even so, the 

 United States has a trade surplus with Mexico of $5.4 billion in 

 1991, compared to a trade deficit of over $75 billion with Asia — so 

 much for less iobs because of NAFTA. 



NAFTA makes trade a two-way street. If we turn down NAFTA, 

 we are relinquishing a $3.8 billion market. Vermont, like most 

 other States, is an exporter of goods, products, and services. Ac- 

 cording to The Economist, July 3 business section, Vermont exports 

 grew $1 billion in 1988 to over $4 billion this past year. That's one 

 trend I don't want to change. 



One final point: Agriculture has a multiplier effect of approxi- 

 mately 4.5 to 7 times. This is true in Vermont, and it is also true 

 nationally. Most of the products bring dollars into a State, and 

 then those producer's dollars are spent many times over in that 

 State. 



Value-added products will continue to be the success story in the 

 future, I believe. U.S. grain will be converted in the United States 

 to these products, creating jobs at home. According to several dairy 

 economists, NAFTA could bring as much as $1 billion more in in- 

 come to dairy farmers and generate as many as 10,000 new jobs 

 throughout the dairy industry in this country. 



I trust that you will base your decision on the facts and what is 

 good for the long-term interests of this country. NAFTA means 

 more U.S. jobs. NAFTA means a stronger American agriculture. 

 NAFTA will help maintain and revitalize rural America. 



NAFTA is a win-win situation for everyone — American, Cana- 

 dian, or Mexican, whether they are a laborer, a farmer, a 

 consumer, or an environmentalist. 



Thank you. 



Senator Conrad. Thank you, Mr. Foster. 



And now, Mr. Lee Swenson, head of the National Farmers Union. 

 Welcome. 



STATEMENT OF LELAND SWENSON, PRESIDENT, NATIONAL 

 FARMERS UNION, DENVER, CO 



Mr. Swenson. Thank you, Mr. Chairman. I would enter for the 

 record a copy of the testimony; in addition to that, provide an ini- 

 tial document that analyzes the impact of the Canadian Free Trade 



