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• NAFTA does not affect U.S. quotas imposed under Section 22 of the Agricul- 

 tural Adjustment Act of 1933 for any country except Mexico, nor does it affect U.S. 

 tariffs or other import protections for non-NAFTA countries; 



• NAFTA does not require any changes in stringent U.S. standards for food safe- 

 ty, animal or plant health, or environmental protection, nor does it prevent the 

 adoption, maintenance, and enforcement of even tougher scientifically based stand- 

 ards, including those more stringent than international standards; 



• NAFTA does not exempt our NAFTA partners from meeting U.S. quality and 

 grade standards for fruits, vegetables, and other products; and 



• NAFTA does not prevent us from using our Market Promotion Program, nor 

 does it stop us from using our Export Enhancement Program as well as other meas- 

 ures to counter the unfair trading practices of our competitors. 



On this last point, NAFTA does include very general provisions relating to export 

 subsidies and domestic support. The three countries agreed to work toward the 

 elimination of agricultural export subsidies in North America, to provide each other 

 with notice of any intent to introduce a subsidy on agricultural exports going to an- 

 other NAFTA country, and to consult with each other about ways to avoid such sub- 

 sidies. These provisions do not prevent the United States from subsidizing exports 

 to Mexico to counter subsidies from the European Community or from Canada. 



With that in the way of general background, let me address the committee's ques- 

 tions that were outlined in your letter of invitation. 



Mr. Chairman, you had asked what effect NAFTA will have on U.S. farm income, 

 the operation of U.S. farm programs, and the U.S.-Mexican agricultural balance of 

 trade. I have already discussed the positive effect NAFTA will nave on farm income 

 and the U.S.-Mexican agricultural balance of trade, but to summarize, USDA projec- 

 tions show the increased import demand from Mexico resulting from NAFTA will 

 boost U.S. farm cash receipts a projected 2 to 3 percent. Increased U.S. exports to 

 Mexico will generate more than 50,000 new jobs on the farm and in the food indus- 

 tries because of NAFTA. No changes in our domestic farm programs will be required 

 because of NAFTA. 



On the question of the safety of imports of agricultural products, NAFTA specifi- 

 cally recognizes the right of each country to establish its own levels of protection 

 for human, animal, and plant health, and the obligations of each country to use 

 science-based standards. NAFTA also allows States and local governments to enact 

 their own tough standards without restriction, so long as the methods used to deter- 

 mine if imports meet those standards are scientifically defensible. Imports that do 

 not meet U.S. health and safety standards will not be permitted into the United 

 States. The Environmental Protection Agency will continue to set pesticide residue 

 levels at the level of protection it deems appropriate to protect health, safety, and 

 the environment in the United States, and USDA and the Food and Drug Adminis- 

 tration will continue to enforce legal limits onpesticide residues and refuse entry 

 to any products that do not meet these limits. The bottom line is, the United States 

 will maintain its high standards for public health and food safety. There will be no 

 compromise in these areas. 



Some critics of NAFTA argue that the agreement somehow lessens the protection 

 of our consumers by requiring that measures be scientifically based. Those critics 

 just simply do not understand the history of agricultural trade. The fact is, by re- 

 quiring that health and safety standards be scientifically based, NAFTA permits, to 

 tne maximum extent, each country to protect its citizens from legitimate risks. At 

 the same time, NAFTA provisions prevent countries from adopting, in the name of 

 health and safety, unnecessary measures as barriers to trade, after other barriers 

 have been negotiated away. 



Similar rights and conditions apply to U.S. protections for animal and plant 

 health. If Mexico declares one of its agricultural areas to be free of a disease or pest 

 that would threaten U.S. agriculture, it must provide evidence supporting the claim 

 and allow U.S. officials access for inspection and testing before products from that 

 area are allowed into the country. 



Mr. Chairman, you also asked about the rules of origin under NAFTA. NAFTA 

 includes strong country-of-origin rules so that the incentives for trade within North 

 America do not open the floodgate to free access for the products of countries outside 

 this continent. 



Commodities from non-NAFTA countries must be transformed or processed sig- 

 nificantly before they can receive NAFTA preferential treatment. NAFTA gives U.S. 

 customs auditors the ability to visit business facilities in Canada and Mexico to en- 

 sure that tariff preferences go only to qualifying goods. 



I should point out that in general, NAFTA rules of origin for the U.S.-Mexico 

 agreement are stronger than those in the United States-Canada Free Trade Agree- 



