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U.S. wheat producers are not looking for protection from fairly traded imports. 

 Nor are we asking for an advantage over Canada in trading wheat with Mexico. Our 

 goal is the elimination of these subsidies and to ensure that equitable conditions of 

 competition exist in the North American wheat market. We strongly endorse the 

 measures listed in the letter to Secretary of Agriculture Espy sent by Senator Bau- 

 cus and others on September 9, 1993. This letter outlines the actions that should 

 be taken to achieve our goal. 



Thank you again Mr. Chairman, for the opportunity to present our views. We ask 

 that this letter De made a part of the committee's September 21 hearing on NAFTA. 

 We look forward to working with you on resolving these matters and finding ways 

 to expand trade for U.S. wheat growers. 

 Sincerely, 



(Signed) Jeff Lundberg, 



President. 



National Association of Wheat Growers, 



Washington, DC, December 18, 1992. 



Hon. Patrick Leahy, 



Chairman, Committee on Agriculture, Nutrition, and Forestry, U.S. Senate, Wash- 

 ington, DC 20510. 



Dear Mr. CHAIRMAN: Thank you for the opportunity to present our views about 

 the North American Free Trade Agreement (NAFTA). 



In the last year, we have provided a number of statements to the committee de- 

 scribing our concerns about the NAFTA. With your indulgence, we will summarize 

 how the NAFTA meets our objectives for the negotiation. 



Objective No. 1. — To eliminate the Mexican wheat import license requirement to 

 ensure consistent U.S. access to the Mexican market. 



In the NAFTA, the Mexican import license will be replaced by a 15-percent tariff 

 on U.S. wheat to be phased out in equal installments over a 10-year period. Pres- 

 ently, U.S. wheat enters Mexico duty free, with the exception of a 10-percent tariff 

 that is applied to Durum wheat. Therefore, it is difficult for us to see why a 15- 

 percent tariff should be considered a boon to U.S. farmers wanting to export wheat 

 to Mexico. At the earliest opportunity, we will seek to implement a provision in the 

 agreement which allows for accelerated reductions in the new duty, contingent on 

 the consent of the parties to the NAFTA. 



Objective No. 2. — To maintain the current U.S. wheat ban on the import of karnal 

 bunt-infected wheat or seeds. 



The NAFTA recognizes each country's right to determine the level of protection 

 necessary to ensure continued agricultural health. This will allow each country to 

 set more stringent standards so long as they are scientifically verifiable. Further, 

 it is our understanding that the United States will not have to modify its current 

 border inspection procedures unless it believes it is appropriate and the trading 

 partner in question has demonstrated that adequate inspection systems and certifi- 

 cation and testing procedures are in place. 



Nonetheless, we are still worried about the entry of karnal bunt-infected trucks 

 and railcars into the United States as the surface transportation systems between 

 the two countries become more integrated. Adequate inspection procedures will have 

 to be implemented in order to guard against the inadvertent contamination of the 

 U.S. wheat crop. The presence of karnal bunt in the United States would have a 

 devastating effect on wheat exports to wheat-producing countries, particularly 

 China and the former Soviet Union and could directly and adversely impact the 

 farmers' ability to garner income from the market. 



Objective No. 3 — To achieve price transparency with the Canadian Wheat Board 

 in Canadian export sales to the United States and Mexico. 



The NAFTA is silent on the specific issue of price transparency. This important 

 issue has been consistently ignored by trade negotiators. Unlike the open market 

 U.S. trading system, sales prices are not revealed in exporting countries with mo- 

 nopolistic marketing regimes, such as the Canadian Wheat Board. The lack of price 

 transparency makes it impossible to determine whether unfair trading practices are 

 in use. 



Article 506 of the text deals with the topic of export subsidies, but notably pro- 

 vides no definition of what constitutes an export subsidy. The 1990 farm bill directs 

 the administration to consider the administered pricing practices of monopoly grain 

 boards when considering using the EEP. We cannot accept an agreement which does 

 nothing to address this matter. 



