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Question 2. Is the administration prepared to exchange letters with the Mexican 

 Government, committing to work towards the elimination of export subsidies on 

 sales of grain to Mexico? 



Answer. During the negotiations, the United States expressed an interest in ne- 

 gotiating the elimination of export subsidies into the Mexican market. However, 

 Mexico was not prepared to preclude the opportunity to benefit from the import of 

 subsidised products. Therefore, the United States negotiated Article 705, which pre- 

 serves our right to use export subsidies in the Mexican market when Mexico is im- 

 porting subsidized products from other countries, including Canada. 



Question 3. You told the Finance Committee that you support the use of end-use 

 certificates against Canadian grain. Can you assure us this provision will happen 

 as part of a NAFTA implementing bill? 



Answer. As I stated in the Finance Committee on September 15, this administra- 

 tion does not oppose legislation to require appropriately crafted end-use certificates 

 on imported grain in order to ensure that foreign grain is not benefiting from U.S. 

 export programs. 



Leland Swenson 



Question 1. Can the concerns you have mentioned be addressed independent of 

 the NAFTA? For example, there are indications that the USTR may be ready to 

 take action under Section 22 with regard to wheat. Would your organization be in 

 a position to support this agreement if such actions were taken? 



Answer. It is highly unlikely that the concerns of the national Farmers Union 

 could be addressed satisfactorily by any North American Free Trade Agreement 

 (NAFTA) side agreements. The flaws in the document run too deep. No country 

 which has signed the current NAFTA would want to reopen the document only to 

 retreat voluntarily from a position of advantage. A side agreement with language 

 that strong would not be acceptable to the other countries. 



Lesser agreements, such as those between members of Congress and the adminis- 

 tration, which do not bind the other nations in NAFTA, have no teeth and are not 

 acceptable to NFU. We have seen these agreements come and go in relation to the 

 Canadian Free Trade Agreement. They have been meaningless. 



NFU finds the proposed Section 22 action regarding wheat inadequate for several 

 reasons. 



First, our members grow many commodities, wheat being only one. Singling out 

 one grain for Section 22 action is merely an attempt to divide and conquer. We nave 

 250,000 farms in our organization. Not all of them grow wheat, but most of them 

 grow commodities which will be affected by NAFTA. 



Second, the proposed Section 22 action is merely an offer by the U.S. Trade Rep- 

 resentative to look into an abuse which the previous administration has chosen to 

 ignore for several years. NFU does not view an offer by the USTR to do its job on 

 only one of many existing problems with the Canadian Free Trade Agreement as 

 sufficient reason to support another flawed agreement. 



This NAFTA is lacking in several areas. For instance, no requirement for end-use 

 certificates is included, no country-of-origin labeling provisions exist in it, and the 

 provisions for environmental protection and border inspections ar far too weak. NFU 

 has other concerns as well, but these problems are of sufficient importance to gen- 

 erate strong opposition to this NAFTA among NFU members. 



American family farmers have not seen sufficient commitment by the United 

 States Government to protect them from bad trade agreements in the past. They 

 see their only protection from bad agreements in the future is to keep the United 

 States from signing them in the first place. 



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