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But the President has told you what NAFTA will mean to our economy as a 

 whole. Ambassador Kantor, who has testified here today, Secretary Bentsen, and 

 others, have already testified before the Senate about NAFTA's benefits for our Na- 

 tion as a whole. So, Mr. Chairman, let me tell you and the members of the commit- 

 tee today what I believe NAFTA will mean to American agriculture. 



WHAT NAFTA MEANS FOR U.S. AGRICULTURE 



Let me begin by saying that NAFTA is an important, and indeed, an integral part 

 of this administration's domestic economic agenda. The future for jobs in this coun- 

 try is unmistakably tied to exports. And the fact is, the future of farm income is 

 tied to agricultural exports. 



American farmers and ranchers have much to gain from NAFTA. Trade accounts 

 for up to a quarter of our agricultural production. Clearly, we cannot retreat from 

 the global economy, either in agriculture or in other areas. Quite the contrary; we 

 must embrace the opportunities that NAFTA offers. 



NAFTA will create new, long-term growth opportunities for agriculture within our 

 own hemisphere. In fact, we believe that U.S. agricultural exports will be between 

 $2 billion and $2.5 billion higher annually when NAFTA is fully implemented. U.S. 

 grains and meats would account for more than half the expanded trade value, al- 

 though many U.S. products would benefit. We also see new opportunities in the 

 areas of biotechnology trade, agricultural investment, and the transportation of 

 farm and food products. The increased import demand from Mexico will have a posi- 

 tive impact on U.S. prices and cash receipts, boosting U.S. farm cash receipts a pro- 

 jected 2 to 3 percent. 



What does this mean to the American farmer? It means increased farm income, 

 and increased farm income means more jobs and more job security. We believe 

 54,000 additional jobs on the farm and in the food industries will be created because 

 of NAFTA. The gains to be realized by U.S. agriculture will benefit all of rural 

 America. 



We expect many of our exports to Mexico to increase immediately, but even more 

 gains will be realized over time as the Mexican standard of living grows and as the 

 Mexican market grows even further. Without NAFTA, we do not expect our exports 

 to Mexico to grow nearly as much. Those 54,000 agricultural jobs will never have 

 the chance to be created. But what is perhaps more important, without NAFTA, 

 there is nothing to prevent Mexico from once again closing its borders by erecting 

 new and onerous barriers to imports. This could easily result in the loss of a major 

 market for American goods. This would put in jeopardy those 700,000 U.S. jobs that 

 now exist because of our exports to Mexico. 



We believe that increased trade within our own hemisphere will position U.S. 

 farmers as even stronger competitors in the international arena by capitalizing on 

 U.S. advantages in farm productivity and permitting fuller and more efficient use 

 of our productive capacity. 



The NAFTA agricultural agreement will provide thes% opportunities, along with 

 strong protections for consumers and strong rules of origin — as well as long transi- 

 tion periods and special safeguards for the import-sensitive sectors of our Nation. 



OVERVIEW OF THE AGREEMENT 



Before I address the committee's specific questions, I would first like to list, in 

 very broad terms, a few of the agreement's major provisions involving agriculture: 



• If ratified, NAFTA will ultimately result in the elimination of all tariffs, quotas, 

 and licenses that act as barriers to agricultural trade between the United States 

 and Mexico. 



• NAFTA will give the United States, and with sOme exceptions Canada, pref- 

 erential access to the Mexican market. This means that by the end of the tariff 

 elimination period, U.S. products will enter Mexico duty free, while products of 

 other countries will continue to face high tariffs and significant nontariff barriers 

 to trade. 



• NAFTA will establish strong rules of origin to ensure that North American pro- 

 ducers are the ones to reap the primary benefits from NAFTA trade preferences. 



• NAFTA will provide stronger protections for agricultural inventions, patents, 

 trademarks, and technologies. 



Given the deluge of misinformation that I have heard concerning NAFTA, let me 

 point out just a few commonly misunderstood points about what NAFTA does not 

 do. 



