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Mexico, is a growing economy of 90 million consumers who like to eat beef, it is 

 a natural market for the United States. Mexico currently has a high demand for 

 inexpensive variety meats — meat for which there is little demand in the United 

 States. As the Mexican standard of living improves, there will be a greater demand 

 for more protein and more beef. The United States already dominates this market 

 for high quality, grain-fed beef. In addition, increased business activity in Mexico 

 will mean an increase in the hotel and restaurant trade. Mexico is already our third 

 largest export market for beef. 



We exported about $260 million worth of beef and variety meats to Mexico last 

 year. That market has grown by $50 million a year since 1989. NCA economists pre- 

 dict that exports to Mexico will more than triple by the year 2000, reaching $1 bil- 

 lion. That's equal to today's U.S. beef exports to Japan. 



The market is there, and growing — but it is bumpy. The NAFTA is needed to 

 smooth out that market. Last fall Mexico imposed stiff tariffs on imports of live cat- 

 tle and beef. Those tariffs already have slowed the growth of our market there. They 

 are: A 15-percent tariff on live slaughter cattle, a 20-percent tariff on chilled beef, 

 and a 25-percent tariff on frozen beef. The tariffs would be lifted for our industry 

 immediately under the NAFTA. The NAFTA also would phase out a 20-percent tar- 

 iff on beef variety meats over 10 years. It is unfortunate that critics of the North 

 American Free Trade Agreement have based their arguments on fear — fear that the 

 United States will not be able to compete with Mexico. Mr. Chairman, the U.S. beef 

 industry is not afraid to compete with any country on a level playing field. We are 

 the most efficient producer of high quality beef in the world. 



I have heard claims that the NAFTA will shift the U.S. beef industry to south 

 of the border. That is not going to happen. Right now there is nothing keeping U.S. 

 business from moving to Mexico. The real issue is productivity. Mexico does not 

 have the efficient production practices nor the feed supplies to steal the U.S. beef 

 industry. 



NAFTA will not encourage feeder cattle imports from Mexico to flood the U.S. 

 market. Right now, we import feeder cattle from Mexico on a market driven basis. 

 This will not change under the NAFTA. In fact, imports have slowed in 1991 and 

 1992 from previous years due to a stronger domestic cattle market in Mexico. 



NAFTA will not weaken U.S. animal disease control and eradication efforts. With 

 or without a NAFTA, Mexican cattle producers must pass strict U.S. animal health 

 standards before they are allowed into the United States. NCA is confident the 

 NAFTA will encourage Mexican cattle producers and their government to strength- 

 en their animal disease control programs if they are to be competitive in the U.S. 

 market. Currently, this joint committee is developing the guidelines for a bovine tu- 

 berculosis and brucellosis eradication program in Mexico to protect our respective 

 domestic herds from these diseases. 



We already have an established relationship in this area During the last 2 years 

 NCA members have been working directly with Mexican cattle producers to estab- 

 lish a bovine tuberculosis eradication program in Mexico. The Animal and Plant 

 Health Inspection Service and the Mexican Government are also participants in the 

 discussions. I am pleased to announce that a joint group of U.S. cattle producers 

 and APHIS officials and Mexican cattle producers and government officials met for 

 the first time during the NCA midyear meeting this August. 



Some critics of NAFTA have argued that countries desiring access to the U.S. 

 market with their beef may use Mexico as a platform to enter the U.S. market. We 

 believe the agreement answers these critics by including strong rules of origin. All 

 fresh, chilled and frozen beef is considered of one character, regardless of processed 

 state. A character change is required to meet a Mexican origin standard. Without 

 a transformation, the product is considered not of Mexican origin and is subject to 

 the Meat Import Law. 



We agree with President Clinton's strong statement last week at the White House 

 when he said, "Every single, solitary thing you hear people (critics) talk about, that 

 they are worried about, can happen whether this trade agreement passes or not, 

 and most will be worse if it fails." 



Jobs have been an important part of the debates on the NAFTA. We know that 

 increased exports, particularly exports of high-value or value-added products such 

 as beef mean more jobs in rural America. The NAFTA means increased exports. 

 Some U.S. companies were forced to move to Mexico in order to compete in that 

 market because of current trade barriers. Those barriers will be eliminated with the 

 NAFTA. So those companies can remain in the United States to provide more jobs 

 to U.S. citizens. 



A good trade agreement is a win-win situation for all countries involved. We are 

 excited about the opportunities presented by the NAFTA. The NAFTA will improve 

 the economic picture in Mexico, the United States and Canada. This in turn will 



