APPENDIX 



PREPARED STATEMENTS 



Senator Lugar 



Mr. Chairman, NAFTA deserves our support because it will be good for American 

 exports and American jobs. It will give U.S. goods and services preferential access 

 to Mexico's dynamic developing economy. It will preserve our ability to make our 

 own decisions on critical consumer issues like food safety, highway standards and 

 professional certification — and back up those decisions with action. 



Many different U.S. industries will benefit from NAFTA. For example, the De- 

 partment of Commerce says U.S. automotive exports could rise by $1 billion in the 

 first year of the agreement. But agriculture is a particularly clear case of NAFTA's 

 benefits. 



The anticipated increase in exports from just six commodity sectors — corn and 

 corn products, soybeans and soybean products, wheat, pork, beef and dairy prod- 

 ucts — would increase Indiana farm income by $100 million a year once NAFTA is 

 fully implemented. 



And the increase in exports will not benefit just bulk commodities. Processed food 

 sales to that market have grown dramatically since the late 1980s. So it is not sur- 

 prising that support for this agreement in my State includes not only farm groups 

 like the Indiana Farm Bureau, the Indiana Pork Producers and the Indiana Soy- 

 bean Growers, but also agribusiness firms like Agricor, American Maize Products, 

 Central Soya, Dean Foods, and Pioneer Seed. 



Under NAFTA, access to the Mexican corn market will no longer be subject to the 

 whims of the Mexican Government, but guaranteed for an initial 2.5 million tons — 

 an amount that will grow each year until all barriers are dropped. Sudden, arbi- 

 trary tariff increases on U.S. livestock products will also be avoided. 



But as important as such "rules-based" gains will be, they are likely to pale beside 

 "growth-based" gains. In other words, growth in Mexican incomes from increased 

 trade will translate into a higher quality diet, creating rich opportunities for U.S. 

 farmers and food companies. 



Mexico is already our fourth -largest agricultural market, after Japan, the EC, and 

 Canada. With NAFTA, its rank as a market will almost certainly increase, and so 

 will the incomes of American farmers. 



Senator Conrad 



Earlier this year I wrote Ambassador Kantor to express my concern that the 

 NAFTA negotiated by the Bush administration was so badly flawed that it ought 

 to be renegotiated. The administration had already decided, though, that the agree- 

 ment would not be renegotiated but rather that it would be supplemented by side 

 agreements. Consequently, I urged USTR to use these side agreements and the im- 

 plementing legislation to fix the flaws that I perceived in the agreement. 



These flaws included problems affecting the sugar and wheat industries, concerns 

 regarding enforcement of the rules of origin and sanitary/phytosanitary chapters of 

 the agreement, the widely different levels of wages and environmental and labor 



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