169 



leaving open the issue of unfair trading practices, such as Canadian Wheat Board 

 pricing pratices. 



Question 3. You have been very active in actions to improve food safety since you 

 have taken office. How will you address the concerns with food safety and inspection 

 which have been brought forward today? Will it be possible to make these changes 

 after the NAFTA has been implemented? 



Answer. We know where we need to improve the meat inspection system, for ex- 

 ample, and we will continue to make progress in that direction. But the NAFTA will 

 in no way affect our ability to improve the meat inspection system. The NAFTA spe- 

 cifically provides that countries can adopt measures to protect human, plant, and 

 animal health, so our ability to maintain and improve upon any health or inspection 

 measure will not be diminished. The NAFTA does not require that we make any 

 changes to our current standards for health and inspection. The NAFTA also pro- 

 vides that a State can impose more stringent measures, as long as they are based 

 on sound science and are not disguised trade barriers. 



Question 4. I understand that the Mexicans have imposed a "slowdown" on sheep 

 moving into Mexico that has created a tremendous backlog of animals in that re- 

 gion. It has been alleged that this slowdown is a protest against the tuberculosis 

 regulations proposed for cattle. The market demand is being met by other nations. 

 This could create lasting damage to the American sheep industry and threatens 

 their support for the NAFTA. Is the Department involved in seeking a quick resolu- 

 tion to this situation and will the NAFTA prevent such occurrences in the future? 



Answer. On September 7, 1993, the Government of Mexico announced that they 

 would begin implementing requirements for U.S. slaughter sheep exported to Mex- 

 ico to be individually inspected for extoparasites. Exporters expressed concern that 

 Mexican inspection facilities were not adequate to handle the volume of sheep cur- 

 rently exported, about 4,000 head per day. The new requirement, which Mexico had 

 required 2 years ago in a similar move, has not materially affected the movement 

 of sheep into Mexico from Texas. Mexico is, of course, allowed to require health in- 

 spections on imported animals, as long as such requirements are also imposed on 

 domestic animals and are scientifically defensible. The NAFTA will give us recourse 

 to pursue any Mexican requirement we think does not meet the test of sound 

 science. 



Ambassador Kantor 



Question 1. I am supportive of efforts to use Section 22 with regard to Canadian 

 wheat. Does the administration intend to pursue Section 22 action? 



Answer. I understand your concerns about wheat imports from Canada. One pos- 

 sible remedy is the imposition of an import fee or quota under Section 22 of the Ag- 

 ricultural Adjustment Act of 1933. Under current law, the Secretary of Agriculture 

 advises the President when the Secretary has reason to believe that imports of any 

 article are entering the United States in such quantities "as to render or tend to 

 render ineffective, materially interfere with" any USDA price support or other agri- 

 cultural program, or "reduce substantially the amount of any product processed in 

 the United States from any agricultural commodity or product thereof covered by 

 a USDA agricultural program. 



If the President agrees, he must order an investigation by the U.S. International 

 Trade Commission (ITC). Based on the ITC report, the President must determine 

 whether the conditions specified in the statue exist. If the President make an af- 

 firmative determination, he is required to impose, by proclamation, either import 

 fees or import quotas sufficient to prevent imports from harming or interfering with 

 the relevant agricultural program. Any import fee imposed, however, may not ex- 

 ceed 50 percent ad valorem. Any import quota may not exceed 50 percent of the 

 quantity imported during a representative period. 



If the Secretary of Agriculture determines and reports to the President that emer- 

 gency action is needed, the President may take immediate interim action without 

 awaiting a report from the ITC. Such interim action will continue in effect until the 

 President acts on the ITC report. 



At this time, we understand that this issue is under review within the Depart- 

 ment of Agriculture, but we are unaware of any pending advice to the President 

 from the Secretary of Agriculture. Should such advice be received, my office would 

 usually be asked to coordinate interagency recommendations to the President. With- 

 in the interagency process, my office would support the idea of taking Section 22 

 action. 



