87 



The Government Accountability Project (GAP) has documented the problem with 

 meat inspection under the U.SyCanada Free Trade Agreement. Under the CFTA, 

 meat inspection has turned into paperwork inspection. 



GAP has also documented the problem of transshipment. Under the CFTA, Aus- 

 tralian beef is shipped into Canada and then comes into the United States as Cana- 

 dian beef. Because it is not produced in Canada or sold for Canadian consumption, 

 it is not inspected in Canada. At the same time, because it comes over the U.S. bor- 

 der as Canadian beef, it is not inspected as Australian beef, nor does it apply toward 

 the import quotas and tariffs normally applied to Australian beef. 



What then, are the implications for the U.S./Mexican border? 



If current inspection under the Canadian/U.S. agreement is any indication, and 

 we believe it is, then the process would better be labeled a paper certification in- 

 spection. We clearly have stronger inspections between States and within our mar- 

 keting structure and processing system than exist at either our Canadian or the 

 Mexican borders. In the absence of strong corrective measures, we believe the prob- 

 lem will become even worse as trade is increased. 



Safeguards are also needed to protect against the spread of animal disease, which 

 could have disastrous consequences. GAP reports that since 1982, the number of 

 steers imported annually from Mexico has quadrupled, and so has the incidence of 

 TB in cattle. In 1992, 83 percent of the cases of bovine TB were found in Mexican 

 cattle. Bovine tuberculosis is more than a disaster for cattle producers — it can also 

 cause TB in humans. Yet, a USDA veterinarian has testified that he was ordered 

 to release for human consumption a beef carcass with laboratory-confirmed evidence 

 of TB lesions. 



Food safety and human health will also be jeopardized if imports produced with 

 banned or restricted pesticides are allowed to come up across the border. GAO found 

 58 pesticides which could not be used in the United States, but which are allowed 

 in Mexico. Clearly, pesticides not safe for use within the United States are also not 

 safe if they are introduced into the food supply via imports. 



II. LOSS OF U.S. MARKET ACCESS 



The NAFTA is supposed to increase our market access. Yet in some instances, it 

 actually decreases market access, by adding new tariffs and restricting many exist- 

 ing markets. Corn, barley, wheat, beans, milk, and cheese products have either less 

 access or higher tariffs, or both for the immediate future. Yet the agreement allows 

 Canada to maintain significant commodity protection and transportation assistance. 



The Mexican tariff schedule shows that, in the case of dry edible beans, between 

 1989 and 1991, the U.S. average annual export volume of beans to Mexico pursuant 

 to CONASUPO license, was 90,276 metric tons with no tariff. NAFTA cuts our tar- 

 iff-free access from over 90,000 metric tons to 50,000 metric tons. Sales over that 

 amount have a tariff of 139 percent, but not less than $480 a ton. 



This new tariff will come down slowly over 15 years and the quota will increase 

 by 3 percent a year over 15 years. 



The situation we believe gives China the advantage to export more beans to Mex- 

 ico as they continue to operate under the old CONASUPO licensing system with no 

 tariffs! 



On wheat, Mexico has imposed a new 5-percent addition to the existing 10-percent 

 tariff on Durum wheat, and imposed a new 15-percent tariff on all other wheat, in 

 exchange for the free CONASUPO license. 



Canada, meanwhile, will maintain its transportation assistance in marketing its 

 wheat to Mexico, as well as the United States. The attached chart shows the in- 

 crease in Durum, all wheat, and barley to the United States from Canada since the 

 implementation of the Canadian Free Trade Agreement. 8 



Import levels from Canada have increased since the implementation of the Cana- 

 dian Free Trade Agreement in peanut products, sugar products, beef and beef prod- 

 ucts, pork, wheat, and barley, and there is a clear need to correct these inequities. 

 There is no reason to believe that such activities will not occur under the Mexican/ 

 U.S. agreement at an even greater level and quantity base. 



This year the United States made a significant investment in using the Export 

 Enhancement Program (EEP) to allow us to compete favorably with Canada on 

 wheat sales to Mexico. Yet, because there are inadequate rules of origin, the is no 

 way to ensure that the United States is not expending EEP dollars to export Cana- 

 dian produced wheat! If we further open our borders without correcting this prob- 

 lem, what other countries will send us commodities to be exported with our EEP 

 funding? 



s See page 153. 



