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66–274 PDF 2011

S. HRG. 111–1026 

PROMOTING AGRICULTURAL EXPORTS: 

REVIEWING U.S. AGRICULTURAL TRADE 

POLICY AND THE FARM BILL’S TRADE TITLE 

HEARING 

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

AUGUST 4, 2010 

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry 

( 

Available via the World Wide Web: http://www.fdsys.gov/ 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

BLANCHE L. LINCOLN, Arkansas, Chairman 

PATRICK J. LEAHY, Vermont 

TOM HARKIN, Iowa 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

DEBBIE STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

SHERROD BROWN, Ohio 

ROBERT CASEY, Jr., Pennsylvania 

AMY KLOBUCHAR, Minnesota 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

SAXBY CHAMBLISS, Georgia 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

MIKE JOHANNS, Nebraska 

CHARLES GRASSLEY, Iowa 

JOHN THUNE, South Dakota 

JOHN CORNYN, Texas 

ROBERT HOLIFIELD, Majority Staff Director 

JESSICA L. WILLIAMS, Chief Clerk 

MARTHA SCOTT POINDEXTER, Minority Staff Director 

ANNE C. HAZLETT, Minority Chief Counsel 

(II) 

(III) 

C O N T E N T S 

Page 

HEARING(S): 

Promoting Agricultural Exports: Reviewing U.S. Agricultural Trade Policy 

and the Farm Bill’s Trade Title .......................................................................... 1 

Wednesday, August 4, 2010 

STATEMENTS PRESENTED BY SENATORS 

Lincoln, Hon. Blanche L., U.S. Senator from the State of Arkansas, Chairman, Committee on Agriculture, Nutrition, And Forestry ............................... 1 

Chambliss, Hon. Saxby, U.S. Senator from the State of Georgia ........................ 4 

Panel I 

Kirk, Ron, Ambassador, U.S. Trade Representative, Washington, DC ............... 6 

Panel II 

Mencer, Joe, Board Member, USA Rice Federation; Board Member, USA 

Rice Producers Group; Vice Chairman, USA Rice Council; and Arkansas 

Rice Producers Group, Lake Village, Arkansas ................................................. 35 

Murphy, Danny, Vice President, American Soybean Association, Canton, Mississippi .................................................................................................................. 33 

Rhodes, Duane, Vice President of Export, Poultry and Prepared Foods, Tyson 

Foods; Second Vice Chairman, USA Poultry and Egg Export Council; on 

behalf of the National Chicken Council, Springdale, Arkansas ....................... 37 

Roggie, Brent, General Manager and Chief Operating Officer, National Grape 

Cooperative Association; on behalf of The National Council of Farmer Cooperatives, Westfield, New York ......................................................................... 40 

APPENDIX 

PREPARED STATEMENTS: 

Kirk, Ron .................................................................................................................. 48 

Mencer, Joe .............................................................................................................. 50 

Murphy, Danny ........................................................................................................ 63 

Rhodes, Duane ......................................................................................................... 66 

Roggie, Brent ............................................................................................................ 79 

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Roggie, Brent: 

Additional comments for the Record ............................................................... 86 

QUESTION AND ANSWER: 

Lincoln, Hon. Blanche L.: 

Written questions to Ambassador Ron Kirk .................................................. 92 

Chambliss, Hon. Saxby: 

Written questions to Ambassador Ron Kirk .................................................. 94 

Grassley, Hon. Charles E.: 

Written questions to Ambassador Ron Kirk .................................................. 97 

Klobuchar, Hon. Amy: 

Written questions to Ambassador Ron Kirk .................................................. 99 

Lugar, Hon. Richard G.: 

Written questions to Ambassador Ron Kirk .................................................. 100 

Page

IV 

MCConnell, Hon. Mitch: 

Written questions to Ambassador Ron Kirk .................................................. 101 

Kirk, Ron: 

Written response to questions from Hon. Blanche L. Lincoln ...................... 102 

Written response to questions from Hon. Saxby Chambliss ......................... 105 

Written response to questions from Hon. Charles E. Grassley .................... 109 

Written response to questions from Hon. Amy Klobuchar ........................... 113 

Written response to questions from Hon. Richard G. Lugar ........................ 114 

Written response to questions from Hon. Mitch MCConnell ........................ 118 

(1) 

PROMOTING AGRICULTURAL EXPORTS: 

REVIEWING U.S. AGRICULTURAL TRADE 

POLICY AND THE FARM BILL’S TRADE TITLE 

Wednesday, August 4, 2010 

UNITED STATES SENATE, 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, 

Washington, DC 

The committee met, pursuant to notice, at 9:39 a.m., in Room 

328–A, Russell Senate Office Building, Hon. Blanche Lincoln, 

Chairman of the committee, presiding. 

Present or submitting a statement: Senators Lincoln, Baucus, 

Stabenow, Klobuchar, Gillibrand, Chambliss, Lugar, Cochran, Roberts, Johanns, Grassley, and Thune. 

STATEMENT OF HON. BLANCHE L. LINCOLN, U.S. SENATOR 

FROM THE STATE OF ARKANSAS, CHAIRMAN, COMMITTEE 

ON AGRICULTURE, NUTRITION, AND FORESTRY 

Chairman LINCOLN. Good morning. The Senate Committee on 

Agriculture, Nutrition, and Forestry will now come to order. 

This is the third in a series of hearings to help this committee 

prepare for the next farm bill. Today’s focus will be on the state 

of our agricultural exports and the export promotion programs included in the farm bill. 

I want to thank my very good friend, Senator Chambliss, the 

Ranking Member of the committee, for helping me organize this 

hearing and for being such a great partner on the committee and 

for being a steadfast advocate for our nation’s farmers and ranchers. Senator Chambliss and I both recognize how important trade 

is to U.S. agriculture. 

I also want to thank many other distinguished colleagues for 

their attendance today and for all the work that they do on behalf 

of rural America. I am proud to chair a committee which has always been bipartisan and where we put people above partisan politics, and I am glad that everyone is here today and I know there 

will be others joining us. 

As we work to get our economy back on track, we must focus on 

creating jobs in our rural communities. In President Obama’s State 

of the Union Address, his comment that one of the best ways to 

create jobs was to increase our exports. He made a commitment to 

put our country on a path to double U.S. exports within five years. 

I applaud this commitment and believe that U.S. agriculture can 

truly lead the way. 

2 

Today, we will focus on how we create that demand and give our 

farmers and ranchers access to markets that will ensure their success and the success of our rural communities. 

We are blessed to have a bounty of food produced here in the 

United States. Our farm and ranch families provide this bounty 

with greater respect for the environment than anywhere else in the 

world. And we are fortunate that we live in an age where we can 

share this bounty with the world, a world that is growing rapidly 

and desperately in need of safe food. 

We have a number of excellent witnesses that we will hear from 

today. I would like to extend a very special welcome to Ambassador 

Ron Kirk, U.S. Trade Representative, and I would also like to say 

a welcome to fellow Arkansans Joe Mencer and Duane Rhodes. I 

appreciate everyone’s attendance and input on this very important 

issue. 

Agriculture is a sector of our economy where we are proving that 

we can successfully meet the export demands that will help rebuild 

our U.S. economy. For every additional $1 billion of agricultural 

products we export, we can create 9,000 jobs. These are long-term 

jobs that we desperately need. Agriculture is one of the few U.S. 

sectors where we have a trade surplus, and we actually export 

more than we import. In 2009, our net trade surplus was a very 

impressive $27 billion. 

American farmers and ranchers tell me every day we must continue to look for other ways to grow our exports. My immediate response is that we don’t have to look any further than the 90 miles 

south from our own borders in the U.S., and that is Cuba. Relaxing 

trade restrictions on travel and trade with Cuba represents a tremendous opportunity to grow our economy. Even with the current 

restrictions in place, U.S. agricultural exports to Cuba have averaged about $470 million over the last five years, accounting for 

about a quarter of Cuba’s food and agricultural imports. A recent 

study by Dr. Rossen of Texas A&M University found that passage 

of a bill relaxing trade and travel restrictions with Cuba would 

nearly double that amount annually and generate increased business activity valued at $1.1 billion, creating 6,000 new jobs. 

While the benefits would reach all parts of the U.S. economy, Arkansas, my home State, is uniquely prepared to meet Cuban demand for rice and poultry, both of which land in the top five of 

overall Cuban agricultural imports. Throughout my career, I have 

cosponsored legislation that will open up this market once and for 

all, and I am grateful to Chairman Baucus for his work in those 

areas and in all the trade areas and we are pleased that he is here 

today. 

I will continue to fight to see Congress take this up this year, 

and as the trade embargo on Cuba approaches its 50th anniversary 

without having had a measurable impact on the behavior of the 

government of Cuba, it is high time that we consider alternative 

approaches. Everyone should agree that 50 years of a failed policy 

is unlikely to yield a different result than it already has. 

We can also increase exports by pursuing more Free Trade 

Agreements. The first step along that road must be to expeditiously 

consider the three pending FTA negotiated agreements more than 

three years ago with South Korea, Colombia, and Panama, and put 

3 

them into effect. Aside from lingering concerns over beef access into 

South Korea, these three FTAs are broadly supported by U.S. agriculture and could add up to several billion dollars of overall U.S. 

agricultural exports, creating thousands of jobs in the process. 

Such action would also allow U.S. products to maintain a competitive balance with other major agricultural exporters, such as 

Canada and the EU. We have also negotiated FTAs with these 

countries, who threaten to jump ahead of us in terms of tariff preferences, not to mention having the added benefit of keeping our 

word with our friends in the global community that has steadfastly 

stood by our side in sometimes hostile regions of the world. 

If we succeed in these initial steps, these actions could provide 

important momentum for launching negotiations with new sets of 

trading partners. That effort will require providing the President 

with the Fast Track authority he will need to move forward. 

I hope that in this next stage, we can focus on countries with robust markets. Of our existing FTA partners, only Mexico, Canada, 

and Morocco have populations exceeding 30 million. And even if we 

add the pending FTAs to those lists, those markets would account 

for only about 380 million foreign consumers, or less than six percent of the world’s population outside the United States. 

Our highly productive farmers deserve the chance to compete 

and sell their products in a free market. I am convinced that if we 

are given unhindered access to the world’s markets, they will rise 

to that challenge. We cannot afford to stay on the sidelines. The 

costs of doing so are so far greater. 

I want to thank Ambassador Kirk for the hard work he has undertaken at USTR and his colleagues at USDA in knocking down 

unfair barriers to U.S. food and agricultural products. The sooner 

we identify and target these barriers as they emerge, the sooner 

trade flows can resume. 

One prominent example was the Russian ban imposed on U.S. 

poultry. I was very pleased to see the administration’s positions in 

response to concerns that I and many of my colleagues have expressed. The Russian market is worth $100 million annually to Arkansas producers, and the decision to lift the ban will help save 

89,000 poultry jobs that are critical to Arkansas’s economy. I am 

certainly proud to report that first shipments of U.S. poultry are 

hoping to arrive in Russia in the coming months. We know that 

you are continuing to work on that issue with us, Ambassador 

Kirk, and we are looking forward to a positive outcome and how 

we can be of assistance to you. 

This committee authorizes and funds an array of trade promotion 

programs under the trade title of the current farm bill, including 

the Market Access Program, Foreign Market Development Program, the GSM 102 Export Credit Guarantee Program, and Technical Assistance for specialty crops. Each of these programs help 

U.S. companies market their products in foreign countries. 

USDA and the U.S. Agency for International Development also 

operate international food assistance programs, such as Food for 

Peace and the McGovern-Dole Food Education Program, which we 

are indebted to Senator Lugar for all of his hard work in those 

areas. These programs will be a central focus as we begin debate 

on the provisions of the next farm bill, and I certainly welcome the 

4 

second panel’s feedback on how well they do work and how they 

might be improved. 

Again, thanks to all of you all for being here today and I will now 

turn to our Ranking Member, Senator Chambliss, for his opening 

statement. 

STATEMENT OF HON. SAXBY CHAMBLISS, U.S. SENATOR FROM 

THE STATE OF GEORGIA 

Senator CHAMBLISS. Well, thanks very much, Madam Chairman, 

particularly for holding this hearing today. I think this may be the 

most important oversight hearing that we hold as we move into the 

writing of the next farm bill, because as we see our budget in agriculture, and particularly for farm bills, decline as they have over 

the last several years and as we see the influx of policy demands 

coming out of the WTO, trade issues become more and more critical, and the future of American agriculture, I think, lies in our 

ability to export the finest quality of agricultural products of anybody in the world. Your leadership on this has been very strong 

and we appreciate your interest from a farmer’s standpoint in ensuring that we have good trade agreements in place and that we 

monitor those agreements as we move forward. 

Earlier this year, the President announced the National Export 

Initiative and I support the plan and goal of doubling U.S. exports 

of goods and services over five years. But the Initiative must have 

a clear vision and the proper support from the administration in 

order to be successful. I remain skeptical this is the case, since the 

Initiative lacks tangible metrics that will measure the results, and 

I wonder if a substantial downpayment is not simply achievable by 

implementing the pending Free Trade Agreements and working 

with key partners that share a common interest in lowering tariffs 

and other barriers to trade. 

U.S. agriculture exports remain one of the few bright spots on 

the domestic economy, with a positive balance of trade, as you 

noted, Madam Chairman, noting almost $27 billion in 2009. Agriculture products make up over ten percent of all U.S. exports and 

despite the global economic crisis, exports last year were up by almost $13 billion compared to the year before the global economic 

crisis. This success is due in no small part to the demand for highquality agriculture products and the continuing efficiency and productivity of farmers and ranchers in the United States. 

Despite this success, competition for new and existing markets 

continues to grow as other agriculture exporters aggressively negotiate Free Trade Agreements. In order to increase agriculture exports, the administration must do more than pay lip service to initiatives that lull us into a false sense of action. 

As we await the first report on the NEI, the administration continues to sit on the South Korea, Colombia, and Panama Free 

Trade Agreements. These FTAs are ready and represent real and 

tangible gains for the agriculture sector in the United States. If we 

are serious about promoting exports, the President should submit 

all three and press Congress for their immediate approval. 

While opening up new markets is essential, maintaining existing 

ones and providing stable access to growing demand is of equal importance. It is here where I have much praise for Ambassador Kirk 

5 

and his team, along with his counterparts at the Department of Agriculture and the Foreign Agriculture Service. The growing prevalence of sanitary, phytosanitary, and other technical barriers to 

trade threaten to erode key export markets and proliferate in the 

new ones. 

The recent bilateral talks between the United States and Russia 

to resume poultry exports is just one example of a litany of disputes that confront our farmers and ranchers around the world. 

And when President Medvedev was here the other day, I had the 

opportunity to mention this personally in a meeting that I was involved in with him, and actually, the announcement had already 

been made, Mr. Ambassador, that Russia was going to start accepting our poultry products again and I was very complimentary of 

him and thanked him for the effort that had been made by both 

he and President Obama to get that negotiation concluded. 

Then in the last few days, we find out that we have hit another 

stumbling block there, and we had the opportunity to visit with you 

earlier today to talk about this. I know it is very much on your 

radar screen and the Agriculture Trade Minister in Russia is being 

a little difficult to deal with. Now, Senator Roberts and I had an 

encounter with that gentleman several years ago and I would suggest if you need some help, send Senator Roberts in as your shotgun rider—— 

[Laughter.] 

Senator CHAMBLISS. —because I assure you, he made himself 

known to the Russian Trade Minister when we were discussing imports into Russia several years ago. He has been banned from Russia since then, but—— 

[Laughter.] 

Senator CHAMBLISS. Not really. Not really. 

In addition to the proliferation of these barriers, there is the 

challenge of negotiating a multilateral agreement in the World 

Trade Organization Doha Round. This is no simple task, as the 

talks move into the ninth year of negotiations. The current impasse 

is due in no small part to what Ambassador Kirk rightly notes is 

the continued resistance of some members to engage in sustained 

and meaningful negotiations. 

Let me state unequivocally that the deal on the table is insufficient and unbalanced from the perspective of Congress. While other 

countries look to the United States to give more in order to reenergize the round, I would suggest unilateral action will harden views 

in the Senate, and particularly in this committee, that the Doha 

Round is fatally flawed. A successful Round is possible, but only 

when Brazil, China, and India recognize that their rising influence 

in the international economy requires shared sacrifices in order to 

achieve individual and shared gains. 

Let me conclude by noting the importance of the farm bill trade 

programs and to express my disappointment that we could not 

have with us today a representative of the Department of Agriculture. The Department is a key partner in expanding U.S. agricultural exports and their perspective is critical to the future success of the sector. 

Madam Chairman, thanks again. I look forward to the hearing 

and to hearing our witnesses today. 

6 

Chairman LINCOLN. As always, thanks to our Ranking Member, 

Senator Chambliss. I agree with you that opening those markets 

is absolutely critical to our agricultural producers. 

[Whereupon, at 9:54 a.m., the committee proceeded to other business.] 

[Whereupon, at 9:55 a.m., the committee resumed.] 

Chairman LINCOLN. Again, thanks to Senator Chambliss, and 

again, I am very grateful that we have Chairman Baucus and 

Ranking Member Grassley from the Finance Committee as we have 

got much expertise in the trade arena from so many of our members here in the committee, but certainly with that jurisdiction in 

Finance, we are glad they are here. 

We have two panels today and we are eager to hear from our witnesses and get to questions, so in the interest of time, I am going 

to ask members’ opening statements be submitted for the record 

and say a very hearty welcome to Mr. Ambassador. 

Thank you for coming to the committee. Thank you for your testimony today on behalf of your agency. Your written testimony will 

be submitted for the record, so we hope that you can keep your remarks to five minutes. But once again, a very hearty welcome to 

the Senate Agriculture Committee and thank you for coming. 

STATEMENT OF AMBASSADOR RON KIRK, U.S. TRADE 

REPRESENTATIVE, WASHINGTON, DC 

Ambassador Kirk. Chairman Lincoln, Ranking Member Chambliss, and members of the committee, I really appreciate the opportunity to come and share with you this opportunity to talk about 

what we are doing to advance trade in agriculture. As both the 

Chairman and Ranking Member noted, this is one area of our exports in that we have a surplus and the administration is working 

aggressively every day through our enforcement efforts and others 

to do all we can to assist our farmers and ranchers and others. 

I would like to say before I begin my remarks, in response to the 

Ranking Member’s comment about Senator Roberts, considering 

the fact, and I always take every opportunity to remind you, at 

USTR, I think you get absolutely the biggest bang for your buck 

in that we are the smallest staff, and I think give you an incredible 

return. But, Senator Roberts, if you or any other member will raise 

your right hand, I am privileged to deputize you—— 

[Laughter.] 

Ambassador Kirk. —as U.S. Trade Ambassadors pro bono. We 

need all the help we can get. But I don’t know that I am any more 

welcome in Russia than you are, Senator Roberts. 

[Laughter.] 

Ambassador Kirk. Well, it is modest, trust me. But we do have 

those rights and privileges and appurtenances thereto. 

So much of what I will say in my remarks, the Chairman and 

Ranking Member have said, but it does bear repeating. With 95 

percent of the world’s population outside of the United States, not 

just the growth and long-term vitality of our American agricultural 

industry, but I think the future of our American economy is very 

much dependent on our ability to access these markets and the 

world’s consumers. 

7 

Despite the recent global economic downturn, as has been noted, 

U.S. agricultural exports have continued to expand, more than doubling since 2000, from $50 billion to over $100 billion in the current 

year. And has been noted, last year, we exported $97 billion in agricultural products, supporting a $27 billion surplus in agricultural 

trade and supporting roughly 8,000 jobs in the United States. 

The Obama administration is committed to strengthening American agricultural exports and supporting the good jobs that come 

with them. As you noted, Madam Chair, in the President’s State 

of the Union Address, the President set a goal for us to double 

America’s exports over the next five years with the inherent understanding that it could create up to two million additional jobs in 

the United States. To that end, he created the National Export Initiative to leverage all of the resources across the administration to 

help American farmers, ranchers, businesses, manufacturers, or 

service providers and their workers succeed through global trade. 

At USTR, we are taking the lead in pursuing new opportunities, 

but with a special focus on the world’s fastest growing markets 

through initiatives with our individual trading partners, across economically significant regions, and in other multilateral fora. We are 

also seeking to resolve issues on many of our pending Free Trade 

Agreements and are working to bring to you as soon as possible the 

pending Free Trade Agreements with Korea, Colombia, and Panama. All of these agreements hold significant economic promise for 

our farmers and ranchers. For example, in 2009, Colombia was 

among the fastest growing among the Central and South American 

markets for American farm exports, and Korea is currently our 

fifth largest agricultural export market. 

As you know, at the just-concluded G–20 summit in Canada, 

President Obama expressly directed me to intensify our negotiations on Korea in particular with the goal of being able to conclude 

that by the President’s visit for the G–20 summit in November. 

Likewise, a week later when we announced our National Export 

Promotion Council, the President also encouraged us to move forward and try to conclude the agreements with Colombia and Panama. 

In the Asia Pacific, we are leading the negotiation towards a new 

high-standard 21st century agreement through the Trans-Pacific 

Partnership that will ensure America’s farmers and ranchers have 

access to this incredible dynamic and growing market. 

Globally, we remain committed to an ambitious and balanced 

conclusion to the Doha Round, but as I said to many of you when 

I visited with you during my transformation and others, Senator 

Chambliss, you are right. What is on the table is not sufficient. It 

won’t get us there. And the President and all of us have been very 

clear that no three economies have benefitted more from trade liberalization than China, Brazil, and India. We think it is only right 

that they now accept responsibilities commensurate with those 

blessings. 

As we pursue these new markets, the Obama administration will 

also work to ensure that our farmers and ranchers benefit from our 

existing Free Trade Agreements. We now have greater access to 

many markets around the world, I am proud to say, because I 

8 

worked over the last 18 months to resolve the outstanding disputes. 

For example, after the H1N1 scare, we worked very quickly with 

Secretary Vilsack and Secretary Napolitano and throughout the administration to reopen markets in Russia, China, Ukraine, Honduras, Korea, and many others to U.S. pork products. Last year, 

three months after I took office, we resolved a 20-year dispute with 

the European Union that allowed us to resume exports of U.S. beef 

to Europe, and we are now exporting about $48 million in beef to 

the European Union through the end of May. And as has been 

noted, we are working with Russia to try to reopen their market 

for our poultry exports. 

I see that I am over my time, and Madam Chair, I will submit 

the balance of my comments for the record. But we do look forward 

to working with this committee to open new markets and advance 

the interests of America’s agricultural exporters, and I look forward 

to entertaining your questions. Thank you. 

[The prepared statement of Ambassador Kirk can be found on 

page 40 in the appendix.] 

Chairman LINCOLN. Thank you, Mr. Ambassador, and we certainly appreciate your testimony and your presence with us today. 

I will just start with a few questions and would like to begin 

with an issue of particular importance to me and my State of Arkansas. That is the terms of our trade with Cuba. Cuba is located 

less than 100 miles from Florida, and with a large population and 

a strong demand for U.S. agricultural products. Yet our government continues to maintain barriers on U.S. exporters who want 

to meet that demand in Cuba. 

I will certainly use one of my largest commodities as an example, 

rice. As recently as 2004, U.S. rice exports to Cuba were valued at 

$64 million. However, an unfortunate interpretation of a specific 

provision of the Export Enhancement Act in 2005 by the Treasury 

Department caused Cuba to seek other sources of rice. And last 

year, the U.S. shipped no rice to Cuba, and I think that is certainly 

a critical part of what we are looking for, is opening markets that 

are close and that bring value to our workers and the job creation 

that we need to see happen in this country. 

A bill that I have cosponsored along with Senator Baucus and 

others aims to clarify that provision so that agricultural exports 

can flow more freely to Cuba, and I hope working with Senator 

Baucus we can move forward swiftly on something in that bill, or 

reporting out that bill. It will still only capture part of the great 

potential that the country holds for producers, but potentially valued in the hundreds of millions for rice for our State and other rice 

growing States, as well. 

So maybe you can help us by explaining the administration’s position in continuing to deny really our exporters the ability to compete for and recapture the Cuban market, which they are quickly 

and surely losing to China and Vietnam and to other countries at 

this juncture. 

Ambassador Kirk. Senator Lincoln, as you know, President 

Obama has made it clear that he believes that now is an appropriate time to examine our policy in relationship with Cuba. As you 

know, last year the President by Executive Order released some of 

9 

the travel restrictions for families on Cuba, and like you, we see 

that even under our current constraints, our agricultural exports to 

Cuba are not insignificant, just shy of $700 million, and I think we 

have calculated almost $3 billion over the last several years. So we 

agree that this represents a very important market opportunity. 

But those of us in the administration also recognize and respect 

the prerogative of Congress to weigh on this and welcome the debate that has begun under your leadership and Chairman Baucus 

and others, as well as, you know, Chairman Peterson had a hearing on the House side, I guess just several weeks ago. So we await 

some direction from Congress on this, but do believe this could be 

an extraordinary opportunity, in particular, for our farmers and 

ranchers, particularly those in rice and grains. 

Chairman LINCOLN. Thank you. Also, three years ago, I visited 

Colombia and witnessed firsthand the great transformation that 

country has undergone. And yet, today, we still have not ratified 

the FTA which the country signed in 2007. I just think it is a huge 

missed opportunity. We have spent tremendous resources in getting to this point, but quite frankly, really, the main losers are not 

the Colombians but more so our farmers and our manufacturers. 

Colombians enjoy a duty-free access to our markets for nearly 100 

percent of their products, as you well know, yet every single one 

of our exports suffers from tariffs that go as high as 200 percent. 

Even worse, the Canadian Parliament has just ratified an FTA 

with Colombia giving them a major competitive edge over U.S. producers. 

So enacting this FTA would not only boost U.S. exports by $1.1 

billion annually, creating about 10,000 jobs and sustaining many, 

many more. I certainly want to urge the administration to advance 

this agreement as quickly as possible and to submit it to Congress 

for approval for multiple reasons—the job creation, the potential 

for our economy, but also the fact that we are going to lose out to 

other countries who are in there and quickly by the first of the year 

are going to have some preference that we are not going to enjoy. 

Ambassador Kirk. Well, Madam Chair, as I know you were kind 

enough to acknowledge your fellow Arkansans, but Texas thinks of 

ourselves as at least a friendly cousin. In our part of the world, 

honestly, we would say that yours is not so much a question as an 

answer. There is nothing you have said that I don’t agree with. The 

President agrees with you. 

There have been concerns about the labor and justice provisions, 

which we have worked diligently with the Uribe administration, 

and like you, I would say I believe the progress that President 

Uribe and his administration have made in addressing violence is 

significant. It is real. And it is important to note that even the ILO 

now recognizes the progress that Colombia has made and have 

downgraded them in terms of their listing of countries with unacceptable violence. And we look forward to working with the new administration—I believe they will be sworn in, I think, Friday or 

Saturday of this week—to see if we can’t conclude our outstanding 

issues with the Colombians and we can bring this agreement to you 

as soon as possible. 

Chairman LINCOLN. Well, I hope we can move swiftly, and I 

think it is very important in terms of our economy and putting peoVerDate Nov 24 2008 04:27 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\DOCS\66274.TXT MICHA
10 

ple back to work and, again, creating for ourselves in the global 

economy and the global marketplace greater opportunities, particularly in this hemisphere. So I look forward to working with you to 

help make that happen. 

I see my time is up, so I will turn to my colleague, Senator 

Chambliss. 

Senator CHAMBLISS. Thanks very much, Madam Chairman. 

Mr. Ambassador, on behalf of America’s farmers and ranchers 

and the policy makers here involved in agriculture, I want to thank 

you for continuing the effort that I really think started with Ambassador Portman, continued by Ambassador Schwab, and now by 

you in being very active and very definitive and vocal about the 

profile that American agriculture needs to have with respect to 

trade agreements. I think in times past, we may have been the sacrificial lamb, but you have been a real stalwart and I appreciate 

the dialogue that we have had and the efforts that you and your 

staff have gone to with respect to agriculture. 

With respect to the Doha Round, General Lamy recently stated, 

and I quote, ‘‘There are signs of a new dynamic emerging,’’ in the 

small group discussions and he has called on negotiators to build 

on this with a mid-October discussion to evaluate progress. At the 

same time, it seems that negotiations remain at an impasse with 

no breakthrough emerging from the main negotiating countries. 

Now, you recently told reporters that you feel more encouraged 

about the Doha Round and that real progress may be possible this 

year if advanced developing countries are willing to come to the 

bargaining table. Have the small group discussions produced any 

changes in the negotiating positions of key countries, such as 

China, India, and Brazil? 

Ambassador Kirk. Well, Senator, first of all, thank you for your 

acknowledgment of our team and our efforts on behalf of agriculture. It is central to our work at USTR. But I would like to note 

that one of the things I am most proud of is just the seamless relationship we have built with the Department of Agriculture and 

Commerce to make sure that we are using all of our resources effectively. 

With respect to Doha, I can’t tell you how welcome Director General Lamy’s statement is, because it has taken us a while to get 

him to a point to acknowledge, frankly, that, as we say, getting on 

that same old bicycle they have been on for the last nine years 

wasn’t going to get us there. And if I might, I think the credit for 

the change in the negotiating environment in Geneva is singularly 

due to the insistence of the United States, from President Obama 

on down, that there had to be a reality check among all of the partners of Doha and we had to begin to look at the world the way it 

is now versus ten years ago. 

And so we have moved to understand that they had to supplement our negotiations in Geneva with these bilateral discussions, 

frankly, trying to get Russia, Brazil, India, and China. And I want 

to make it careful, when I was asked about my outlook, I don’t 

know that I would say I am overly encouraged. I am less discouraged than I was before. 

I would say that our efforts have led to an acknowledgement that 

there needs to be more on the table. I think the poorest countries 

11 

now believe us when we tell them we aren’t asking for any additional contributions from them, but that, frankly, it is in the poorest countries in the world’s interest to make sure that these three 

growing economies, like China, India, and Brazil, give them access 

to their markets just as, frankly, the United States and the European Union have done. 

And so that is where we are beginning to see the change, and 

even though it is subtle, for the first time, you have some countries 

other than the developing economies, like the U.S. and Canada, beginning to say to Brazil, India, and China, why don’t you come to 

the table and negotiate, because that is where we are going to be 

able to close the gap. 

So we have had a number of bilateral meetings with each of 

those partners. India, at least, has been the most open to dialogue 

with us. China has been wonderfully Chinese. I will leave it at 

that. But we continue to believe that now that we are beyond the 

elections in Japan and hopefully with Brazil, that if we can sit 

down and do the tough negotiations that have to be made, we 

might. 

But I just want to emphasize, because I said it to you all when 

I came before you, and President Obama made it plain in Canada, 

what is on the table is insufficient and we would not bring that to 

this Congress and the American public. But what we are seeking 

is not just for America. We think it is in the interest of the developmental nature of Doha to have a much more balanced and ambitious package and that is what we are going to work for. 

Senator CHAMBLISS. Great. Yesterday, you were quoted as saying 

that the success of the African Growth and Opportunity Act should 

not be tied to the export of textiles and apparel, that countries 

under the Preference Program should look to grow their economies 

through other trade, including in value-added exports made from 

the continent’s new raw materials. You correctly note that textile 

production is crowded, with multiple centers of production around 

the world. 

At the same time, here in Congress, trade preference legislation 

for developing countries often focuses exclusively on textiles. Is this 

a short-sided approach, and should we look to other development 

models that build around indigenous industry rather than attempt 

to create new ones? 

Ambassador Kirk. Well, Senator, I don’t know that I was much 

of a legislative aide when I worked for Senator Bentsen, but I 

learned enough not to ever describe any efforts by Congress as 

short-sighted, so I won’t say that. 

[Laughter.] 

Ambassador Kirk. I will say this, that in the case of AGOA, we 

are pleased with the progress we have made in the last ten years, 

but we are extraordinarily frustrated. Through the generosity of 

this Congress, 97 percent of products produced in Africa can be exported to the United States duty-free, and there are almost 6,500 

individual products that you have given us the privilege to extend 

duty-free preference, yet less than 400 products are utilized. 

So rather than just insisting on more textiles, we have encouraged them to begin to look at the value-added stream, and working 

with partners through U.S. AID and others, beginning them to unVerDate Nov 24 2008 04:27 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 C:\DOCS\66274.TXT MICHA
12 

derstand, you don’t just have to sell all your cotton to China. Why 

don’t you contract with U.S. companies and make the T-shirts, or 

shoe leather, or the wood products, and begin to look at their extracted materials, as well, and particular partnerships with U.S. 

interests and our advances in technology to build the income 

stream from that, as well. And I think if that model works in Africa, we are going to encourage our other partners to do so. 

The American public, this Congress, I think, have been wonderfully generous in extending preferences to the poorest countries in 

the world. But with the budgetary constraints we have now, we 

have been very honest with them. They can’t just look to us to expand those. They are going to have to work harder to diversify, I 

think, within their countries, which would be to their benefit and, 

we think, hopefully for our exporters, as well, as they develop more 

consumptive capacity. 

Senator CHAMBLISS. Thank you very much. 

Chairman LINCOLN. Thank you, Senator Chambliss. 

I would just like to take a very quick moment of personal privilege and welcome two very special individuals. Mr. Atwood Bell 

and Abigail Messier. Mr. Bell is from Jonesboro, Arkansas, and a 

retired educator and a veteran of both the Korean War and World 

War II. He is joined by his granddaughter, Abigail Messier, of 

Saratoga Springs, New York. I just wanted to welcome both Abigail 

to the Agriculture Committee and Mr. Bell, give him a good welcome and a very big thanks for his service to our country. 

[Applause.] 

Chairman LINCOLN. Senator Johanns? 

Senator JOHANNS. Thank you, Madam Chairman. 

Mr. Ambassador, it is good to see you. Let me, if I might, start 

my questions by reading something to you that I think you are 

very familiar with. I was sitting at the State of Union and the 

President said this. He said, ‘‘So tonight we set a new goal. We will 

double our exports over the next five years, an increase that will 

support two million jobs. We have to seek new markets aggressively, just as our competitors are,’’ which they are. 

Since that time, have you started any new bilateral discussions 

that might lead to negotiations of a trade agreement with any 

other countries out there? 

Ambassador Kirk. Not in a bilateral sense. We have begun perhaps the most ambitious effort that we have undertaken in the last 

several years when the President announced at last year’s APEC 

Summit that we would move forward with the negotiations under 

the Trans-Pacific Partnership. As the Chairwoman noted, we have 

a number of bilateral agreements, and some would say there are 

economies that would question whether their economy is significant 

enough to really make a difference. The Trans-Pacific partnership, 

I think, provides us a unique opportunity to have market access for 

all American exporters in what is going to be, by the estimates of 

all economists, the major center for economic growth over the next 

ten to 15 years, and that is the entire Asia-Pacific region, so—— 

Senator JOHANNS. So other than that, no new efforts within any 

other countries? 

Ambassador Kirk. Well, we have a number. In terms of FTAs, no. 

We are working to conclude bits with several economies, but I—— 

13 

Senator JOHANNS. Okay. And Mr. Ambassador, I think you would 

agree with me, no country is going to seriously negotiate with you 

without Trade Promotion Authority. I mean, at some point, they 

lay all their cards on the table, all face up, they shake hands, they 

have got a deal. And without TPA, you say to them, now you get 

a chance to try to convince 535 others who are free to amend the 

agreement. So you are kind of powerless in this regard, aren’t you? 

Ambassador Kirk. Well, I wouldn’t say I am powerless, but it 

would certainly—it would be very much to our advantage for us to 

address the issue of new Trade Promotion Authority in the very 

near future. 

Senator JOHANNS. So why—I have talked about this on the floor. 

This expired during the Bush administration, as you know. Congress at that time made it very clear they weren’t going to extend 

it for President Bush. Why now, when you have such control over 

the House and the Senate, why hasn’t the President said, Ambassador, go over there to Congress and let us start working on TPA? 

Ambassador Kirk. Well, one, we have had quite a bit on our 

plate. Second, you all have been a little bit busy the last 18 

months, and the reality is, I mean, obviously I advocate for that, 

Senator, and will continue. But I believe with the work we have 

to come in and, frankly, begin to restore the American public’s confidence in the value proposition of trade and the balance of trade, 

the focus we have made on enforcement that a number of you have 

referenced, our efforts to conclude the pending Free Trade Agreements, there will be a time in the near future that we will come 

and initiate discussions with Congress for Trade Promotion Authority, certainly with respect to the Trans- Pacific Partnership, and if 

we can get a package that we think merits your consideration, we 

will have to address that for the Doha Agreement, as well. 

Senator JOHANNS. Well, wouldn’t you agree with me, though, 

that you are not going to be successful with any effort, Trans-Pacific Partnership or anything, without TPA, because you can’t 

promise them that there is ever an end to the negotiations unless 

you have EPA. 

Ambassador Kirk. I mean, Senator, unquestionably, we will have 

to have Trade Promotion Authority. But I would say it has not 

been a hindrance, at least to the first two rounds of our negotiations under the Trans-Pacific Partnership. 

Senator JOHANNS. Let me share some statistics with you, changing focus to the three pending agreements. According to the Ways 

and Means Committee, in 2009, U.S. agriculture exports to Colombia decreased by 48 percent. Failure to implement the agreement 

has resulted in an 87 percent decrease in U.S. wheat exports, Ways 

and Means report. Between 2008 and 2009, American companies 

exporting to Colombia lost $811 million in sales of corn, wheat, soybeans, and soybean oil, same report. Already in 2010, U.S. agriculture exports have fallen by another 45 percent. 

I cite these statistics to point out that in my judgment, and I 

work these issues just like you have, we are losing this market because we can’t assure Colombia we are serious about ever submitting their trade agreement. But the biggest concern for me is one 

of our key partners out there from an international standpoint is 

South Korea, and I am worried that in that part of the world, folks 

14 

are going to reach the conclusion that this administration is powerless to get the South Korean Trade Agreement approved. Could you 

comment on that? 

Ambassador Kirk. Well, first of all, I share your concerns very 

much about our loss of market share in Colombia and others. It is 

one of the reasons I have invested so much time in not just the agriculture communities, but frankly, those communities that are 

most concerned about the issues of violence and justice in Colombia, because the reality is we are going to have to be able to build 

strong bipartisan support in the House to move that. And so the 

time we have invested over the last year in going around the country to places like Detroit and Pittsburgh and the Carolinas and 

leaving for Maine tonight is time that I think is going to pay off 

in having us have that balanced argument that we are going to 

have to have in the House to be able to move these forward. 

Secondly, I think the relationship between the United States and 

South Korea could not be stronger, as evidenced by the recent commitments under President Obama to President Lee on a number of 

fronts. And while occasionally I get comments from our partners 

about the domestic environment in the United States, frankly, Senator, I push back hard on that, and I am kind of tired of our trading partners who always hide behind and worry about the attitude 

in Congress. And I remind them that there is never the right time, 

in my estimation, to bring a bad deal to the American public. But 

notwithstanding what people may perceive to be the environment 

and Congress, when we get a deal right, we always find a way to 

get it passed. 

As Senator Bentsen liked to say, I have got a well-worn face. I 

am not quite as old as I look, but I was around, was Secretary of 

State to Governor Ann Richards when we went through the fight 

with NAFTA. That wasn’t an easy battle. I was Mayor of Dallas 

and helped to argue for granting China PNTR status. Every trade 

agreement in this United States has been a major battle except for 

when we have a compelling case to present to the American public, 

not only in terms of market access, but fairness in reflecting our 

values. And when we get to that point, I believe we can pass them. 

So I am not going to let the Koreans or any of the members in 

the WTO hide behind our domestic environment. The bottom line 

is they need to come to the table, give us real market access, reform their behavior, give us the same rights as we have granted 

to them, and if we do that, I think the political environment in 

Congress and the United States changes dramatically for the better. 

Senator JOHANNS. Thank you. 

Chairman LINCOLN. Thank you. 

My Chairman, Senator Baucus. 

Senator BAUCUS. Thank you, Madam Chairman. 

Mr. Ambassador, I am just a little concerned that when the 

President visits Korea November 20, he is going to be under tremendous pressure to deliver a deal. And you alluded to and others 

in this room alluded to some of the reasons why, that is, the relationship the United States has with Korea and the importance of 

Korea to the United States. 

15 

I am very concerned that what he might want to deliver might 

not be in agriculture’s best interest. I am quite concerned that 

Korea will not submit an agreement that lives up to what the 

President knows he promised back in 2007, that Korea will live up 

to OIE standards, all beef, all ages, all cuts. I must remind you 

that no deal is better than a bad deal, and a bad deal would be 

Korea not living up to its agreement to live up to OIE standards, 

all ages, all cuts. 

So can you promise me here today that any agreement that the 

President brings on November 20 will include the requirement that 

Korea opens up its markets to U.S. beef, all ages, all cuts? 

Ambassador Kirk. Senator, I would love to be able to make that 

hard promise. I can tell you this. This issue is of the highest importance to us. I would remind you that not only at the recent G–20 

Summit in Canada, but when President Obama met with President 

Lee last year, that publicly in every case that he has referenced our 

commitment to getting Korea done. He has always put it in the 

context of our ability to resolve the outstanding issues on autos and 

beef. 

So I understand your concern for the interests of your cattlemen 

and ranchers, but this administration has never equivocated on the 

need for us to reach and move toward that full OIE compliance. 

You know that is currently the standard in the agreement. It was, 

frankly, our cattlemen and others that reached a separate protocol 

with Korea to accept a standard of beef 30 months or less. And the 

good thing is our beef exports to Korea are rising rapidly. They are 

up almost 50 percent over last year. We are almost to 40 percent 

of market share. But I want to give you my assurance that we are 

working for full OIE compliance, and that is one of the two main 

issues we will be discussing with my counterparts. 

Senator BAUCUS. Well, the trouble is that we have lost market 

share considerably in Korea. It is very similar to the point that 

Senator Johanns made. For example, in 2003, the United States 

had 70 percent of the market, Australia and New Zealand, 30 percent. That has flipped. Now Australia and New Zealand have 70 

percent. Yes, you say 40. It is 30 or 40 percent, just like we are 

losing market share to other countries because of our failure to conclude trade agreements. Other countries are doing deals for their 

own benefit, at our expense. I am quite concerned, in fact, I am 

flabbergasted almost, that we are not working harder getting deals 

done. 

Ambassador Kirk. Senator, we are—— 

Senator BAUCUS. And I mean results. I don’t mean just work. I 

mean results. If this administration really wanted a Free Trade 

Agreement adopted by the Congress, it could do it. It could do it 

if it wanted to. I hear a lot of words. I don’t hear a lot of results. 

Ambassador Kirk. Well—— 

Senator BAUCUS. And I don’t know why I should schedule a hearing on a Korean FTA if it does not include all beef, all ages, all 

cuts. I don’t know why I should hold a hearing on FTA. It will have 

to come before the Finance Committee and I don’t know why the 

Finance Committee should even have a hearing on that if it doesn’t 

include those provisions. 

16 

Ambassador Kirk. Well, Senator, we share your concerns, but 

with all due respect, we have worked as diligently as we can to resolve the issues to allow us to bring this forward. The administration has a strong commitment to this. But as you know, there are 

very strong opinions within this Congress on both sides of the aisle 

about the equities involved in the accessibility of the Korean market for U.S.—— 

Senator BAUCUS. Oh, I think there is pretty much agreement 

that we should—— 

Ambassador Kirk. —ranchers and—— 

Senator BAUCUS. I don’t think there is much disagreement. I 

know there are some who say, don’t rock the boat, but the fact that 

the producers say they want the bill to export into Korea. And I 

just say, Mr. Ambassador, I am going to be looking at this very 

carefully and I want to see it all there. 

Ambassador Kirk. Well, we want to see it, as well. 

Senator BAUCUS. If not, I don’t know why I should schedule a 

hearing. 

Ambassador Kirk. Well, we want to see it, as well, and we are 

going to—— 

Senator BAUCUS. The proof is in the pudding, Mr. Ambassador. 

We will see, see what you produce. 

Ambassador Kirk. We look forward to working with you. 

Senator BAUCUS. Thank you. 

Chairman LINCOLN. Senator Cochran? 

Senator COCHRAN. Madam Chairman, we know that in June, 

China’s Central Bank announced plans to allow a more flexible exchange rate. China is both a major customer of the U.S. agriculture 

products and a major supplier of products. What are the potential 

impacts of the decision in China to change its currency values? 

What would the impact be on agriculture trade and our economy? 

Ambassador Kirk. Well, Senator, thank you. As you know, this 

has been an issue of paramount concern to both members of Congress and to the administration. We have urged China in every 

fora, bilaterally, through the G–20 and others, to allow their currency to float to market rates, and we think having the yuan rise 

to a level that is more acceptable obviously would help to mitigate 

that delta between the cost of U.S. exports to China and others and 

it would be of great value to agricultural interests, as China is a 

very, very important market, particularly in soy and grains and 

poultry and others. And, obviously, that would be a benefit to our 

farmers and ranchers, as it would for all U.S. exporters into that 

market. 

Senator COCHRAN. In connection with Colombia’s Free Trade 

Agreement, it has been documented that that agreement could provide very positive benefits to the U.S. cotton and cotton textile sectors. What is your assessment of the need for implementing legislation to promote Congressional approval of this new regime of 

trade? Could you update the committee on the administration’s position? 

Ambassador Kirk. Yes, Senator. As you know, the good news is, 

obviously, a number of you have spoken to the importance of that 

market for our agricultural interests. Our challenges in moving forward principally have been related to concerns expressed by a 

17 

number of members of Congress and the labor community over 

what some believe has been an unacceptable level of violence 

against labor leaders and the government’s failure to protect, put 

in place legislative changes and judicial changes to protect them. 

We have been working with the Colombians on that, as the 

Chairman has noted and many others. I think the Uribe administration has made significant progress. We have been working with 

all stakeholders to try to move, frankly, in some cases, to fact beyond fiction and come up with an acceptable package that we can 

present to our partners in Colombia that will allow us to move forward, and we have noticed this in the Federal Register to get public comments. We have begun that interagency process. And with 

the President’s direction now, we are moving as quickly as we can 

to try to complete that so that we can bring an agreement to Congress for your consideration. 

Senator COCHRAN. Well, I congratulate you on the job you continue to do to represent our interests and to try to move forward 

on these special troublesome areas, like China and Colombia. 

Thank you. 

Ambassador Kirk. Thank you, Senator. 

Chairman LINCOLN. Senator Lugar? 

Senator LUGAR. Thank you, Madam Chairman. 

Ambassador Kirk, I am just simply eager to get your analysis as 

to specifically why the Panama Trade Agreement has not occurred. 

This would seem to be a very much simpler matter than either Colombia or Korea. Is it objections in the Congress that you are working with or what problems specifically hit you there? 

Ambassador Kirk. Senator, in some respects, we were a bit advantaged in the case of Panama in that when we came into office, 

much of the process that I referenced with Colombia, the noticing 

and the sort of stakeholding had been done. Frankly, we had a little bit of—and we were able to present to our partners in Panama 

a very defined list of changes we would like to see them make. 

Initially, I will be honest with you, the previous administration 

balked very much at the notion of having to change their tax code 

to address issues raised not by the U.S., but within the OECD in 

terms of there being a tax haven. Fortunately, we worked with 

them over the summer. That has now changed. We have a new administration in the Martinelli administration. We have addressed 

a number of the legislative changes that we sought in terms of 

labor and justice and are now, frankly, waiting on the Martinelli 

administration and our Treasury to conclude their negotiations on 

what will be an acceptable response to the tax issues raised. 

Senator LUGAR. Do you anticipate that our Treasury is moving 

forward rapidly? Is this a priority for—— 

Ambassador Kirk. It is a priority for us. Our Treasury is engaged. But some degree, some of the work is in the hands of Panama. But we hope that we will be able to conclude those in the very 

near future, as well. 

Senator LUGAR. With Colombia, you have discussed this extensively, but it would appear, looking at it just from a foreign policy 

standpoint for a moment as opposed to our domestic politics, that 

the Uribe government has had extraordinary challenges and right 

now a transition is occurring to a new presidency of Colombia. 

18 

While that is appearing, the FARC, who have been difficult, to say 

the least, in terms of difficulty in Colombia, are apparently housed 

across the border in Venezuela, that this has led to Venezuela 

withdrawing its ambassador to Colombia and asking really for the 

OAS and others to almost go into a state of war against Colombia. 

In the midst of this, I appreciate the sentiments in Congress that 

have been expressed endlessly with regard to whether Colombia 

has been sufficiently rigorous with regard to protection of labor 

unions in Colombia. But I would suggest, and perhaps you would 

agree, that for the government of Colombia, the problem has been 

existential with regard to simply maintaining the sovereignty of 

the country against the hostility that Venezuelans and everybody 

else that are around. That is still the case. 

This is, it seems to me, in terms of our own foreign policy and 

the security of Colombia, essential to get on with the Free Trade 

Agreement. You may have come to the calculation that labor interests in the United States are still so hostile to the situation, but 

notwithstanding the foreign policy problem or whether the Colombian state exists or not, that this treaty somehow cannot make it 

through. 

But I would encourage you to give it a try. It just seems to me 

that the patriotism in the American people generally and the understanding of the Colombian predicament is likely to overcome 

what have been these, not quibblings, they are criticisms that are 

based on human rights of other countries, but still a small part, 

really, of the picture of our relationship. 

Ambassador Kirk. Senator, in the broad sense, I would concur 

with most of what you have said. I am mindful of the fact that I 

only sit here as U.S. Trade Representative because it was the wisdom of this Congress almost 40, 50 years ago to create a position 

within the administration separate from the State Department to 

only look at the commercial issues. And so, one, I am careful not 

to wager into—wander over into Secretary of State Clinton’s territory. But your macro analysis is correct. Colombia is a critical ally 

and partner for the United States in South America for all the reasons you articulated. 

And if I would only just briefly say to you what I said earlier to 

Senator Grassley, I want to make it plain. Labor does not have a 

veto power over the trade policy of the Obama administration. But 

I do think we are greatly enhanced that we have invited labor back 

to the table and given them a voice to express their concerns so 

that we have a way to resolve these and move just from some, in 

many cases, rhetoric that is based on what may have happened ten 

to 15 years ago and at least give them an opportunity to play a 

constructive role. And that is the reason I believe we are much 

closer now to being able to move forward with a resolution of the 

issues on Panama and Colombia, is the time we have invested in 

bringing labor back into our Trade Advisory Groups. But I appreciate your encouragement and support. 

Senator LUGAR. Well, my time is up, but I appreciate, likewise, 

your bringing labor back and your attempt to work, as you say, in 

a macro situation. You are right that the State Department and 

Commerce and Treasury are different, but the President still is the 

President. He has apparently given pretty strong instructions to 

19 

get South Korea done before he goes to South Korea, and I would 

strongly agree with that and I am hopeful he has at least enough 

control over the various Cabinet officials to have this macro approach that will be helpful to you. 

Ambassador Kirk. Well, I am certain he will be pleased to hear 

your acknowledgement that he is still the President—— 

Senator LUGAR. Yes. 

[Laughter.] 

Ambassador Kirk. and I don’t know how much control he has 

over the rest of the Cabinet, but he has quite a bit over this one, 

so—— 

[Laughter.] 

Ambassador Kirk. He has given me a job to do and I am going 

to do everything I can to get it done. 

Senator LUGAR. Thank you. 

Chairman LINCOLN. Thank you, and I would like to associate myself with Senator Lugar in the fact that I do think Panama and Colombia are certainly very doable. I would also add to the Ambassador that the esteemed President of Panama is, I believe, a graduate of the University of Arkansas. And although we no longer play 

Texas, we might be of some service there with you in working on 

that issue, so—— 

Ambassador Kirk. But he has told me a number of times that he 

could have gotten into the University of Texas—— 

[Laughter.] 

Chairman LINCOLN. Senator Gillibrand? 

Senator ROBERTS. Can we go back to that Texas-Arkansas Big 

10, Big 12 stuff? I would like to—— 

[Laughter.] 

Ambassador Kirk. Senator, I would say, I think our friends in 

Kansas are pretty happy with Texas right now leaving the Big—— 

Senator ROBERTS. I wouldn’t quite describe it that way, but I will 

talk later about that after you deputize me to handle things with 

Russia. 

Ambassador Kirk. Yes. 

[Laughter.] 

Chairman LINCOLN. Senator Gillibrand? 

Senator GILLIBRAND. Thank you, Madam Chairwoman. 

I would like to turn our attention to the dairy industry and in 

particular our relationship with China. New York’s dairy industry 

is working very hard to continue to rebuild our dairy producer profitability which is a challenge many of the farm families in my State 

are still struggling with every single day. Given that the horrendous drop in demand for U.S. dairy products last year was primarily driven by a steep drop in our exports, rebuilding overseas 

markets for our quality dairy products and maintaining access to 

them is critical to ensuring that this process does not reverse itself. 

Our third-largest export market, as you know, averaging about 

$168 million over the last three years, is China, and so it is very 

important to this process. 

I appreciate the work that you have done to devote maintaining 

access to this market for U.S. dairy products in light of changes 

this spring to China’s dairy certificate requirements. However, it is 

disturbing that we have yet not resolved the issue. Can you tell me 

20 

what USTR is doing to prioritize the issue and ensure that it is 

swiftly addressed so that the U.S. exports to China are not impeded? 

Ambassador Kirk. First of all, Senator, thank you for all of the 

information that you and your dairy farmers have provided to our 

office as we have engaged China on this. This is one of the top 

issues in which we have engaged China directly through our JCCT, 

principally because a lot of the information the industry provided, 

which is the good news, when they brought us the concerns over 

the new certification process, we were able to intervene very early. 

We don’t have a complete resolution, but we are encouraged that 

at least China did agree to pause and not move forward with the 

implementation of those while we worked to come up with an acceptable resolution of it. 

So as opposed to many other cases where we haven’t been able 

to get any response, at least in this case, we do have a time out 

in the implementation of that latest certification process that was 

of so—— 

Senator GILLIBRAND. Do we have a time line for that process? 

Ambassador Kirk. We will—we have a team, I think that may be 

going to China in September—— 

Senator GILLIBRAND. In September, yes. 

Ambassador Kirk. —and prior to our JCCT formal meeting, and 

so hopefully we will—I mean, I will get a readout from that and 

we will make sure we keep you up to date on our progress. 

Senator GILLIBRAND. Thank you. My second question is about the 

U.S.-New Zealand dairy trade. If it is included in the TPP, it is my 

worry that all the benefits of that trade relationship would accrue 

to New Zealand’s dairy industry and that it would be very devastating to the U.S. dairy industry and New York’s markets. In exchange, America’s dairy producers and processors would face tremendous pressure for job loss and reduction in exports, resulting 

truly in the loss of billions of dollars to the U.S. economy and to 

that sector. 

And to further worsen the situation, our dairy exporters do not 

even have the prospect of focusing on other significant new opportunities that the agreement would open up, given that most of the 

other TPP participants are already U.S. FTA partners or else have 

relatively limited tariffs and offer only small market opportunities 

for the dairy industry. 

So I appreciate the administration’s use of both bilateral and regional approaches on this, and it is my understanding that the 

USTR’s approach is to allow countries with existing FTAs to retain 

the market access provisions for those trading partners and that 

new market access negotiations allow parties without existing 

FTAs to be negotiated bilaterally. What is the status of bilateral 

U.S.-New Zealand negotiations, and do you believe that this approach will be successful in protecting the U.S. dairy industry? 

Ambassador Kirk. Well, Senator, first off, let me say we are 

acutely aware that perhaps of all of the many barriers and complex 

issues that we have to address within our negotiations in the 

Trans-Pacific Partnership, dairy is certainly the one that has gotten the most attention for that reason. We have spent an extraordinary amount of time with representatives of the dairy industry. 

21 

I have met with dairy farmers from Wisconsin, Milwaukee, and 

New York. I have met with members of the caucus and yourself. 

So we understand your concern. I would remind you, my interest 

is not to represent anyone but U.S. farmers, ranchers, agriculture. 

We believe that it is still worth the effort, given the explosive potential to expand market access not just among this original nine 

tranche of countries, but throughout Southeast Asia, that we ought 

to continue to look at every opportunity to create market access for 

there. 

Now, you are correct that it is most likely, in terms of the existing FTA partners, will retain those tariff lines. Most of those are 

about at the end of their expiration period anyway. But we will not 

go forward with an agreement that we believe disadvantages our 

dairy interests to the advantage of those in New Zealand. 

We have had two rounds. We are scheduled for a third round in 

Brunei. We aren’t quite to the point that we are negotiating exact 

sectoral lines, but I promise you, we have had more extensive consultation with Congress and industry on this than ever and we will 

keep you apprised as we move forward. 

Senator GILLIBRAND. Thank you, Mr. Ambassador. Thank you, 

Madam Chairwoman. 

Chairman LINCOLN. Senator Stabenow? 

Senator STABENOW. Thank you, Madam Chair. 

Chairman LINCOLN. Just before you begin, there are two votes, 

and Senator Chambliss and I are going to tag-team so we can keep 

our hearing going. 

Senator STABENOW. Great. Thank you very much, and welcome, 

Ambassador Kirk. It is good to see you. 

I wanted to just first comment on a couple of things others have 

said. I want to reiterate what Chairman Baucus said, that no deal 

is better than a bad deal, and so we need to be opening our markets, but we need to make sure they are good deals for us, and I 

would concur. As I have talked to you about North Korea, we have 

got a ways to go before that is a good deal. So we have got some 

work to do and I am hopeful that the deficiencies will be corrected. 

I also want to piggyback on what Senator Cochran said and just 

chime in on currency manipulation in China. It is happening. We 

know it is happening. We need to say it is happening and we need 

to do something about it. So I send back that message to the administration, as well. 

I wanted to follow up. Senator Gillibrand talked about dairy, and 

I, too, have a tremendous interest in enforcement as it relates to 

dairy around the world, and specifically in India. As you have been 

talking about, Russia, Brazil, India, and China and what they need 

to be doing. For far too long, India has not been playing by the 

rules with dairy. There are many ongoing issues where they are, 

frankly, ignoring science. One of the most troubling is the situation 

with dairy, a situation that a number of us wrote you about earlier 

this year. 

For over six years now, India has used dairy certificates to block 

legitimate U.S. dairy exports and refused to negotiate in good faith 

to find a resolution. This certification requirement is not based on 

sound science. India knows that it is not based on sound science. 

While our dairy exports are being blocked, India has exported an 

22 

average of $77 million worth of dairy products to the U.S. over the 

last three years. 

So my question is, given the lack of progress with India over 

many years, what is the USTR doing to examine legal alternatives? 

Ambassador Kirk. Well, first of all, Senator, I have to tell you, 

I agree completely with your assessment of the situation in India. 

As frustrating as China has been, I would say I think one of the 

values of them being in the WTO, we do have the opportunity to 

move forward on other foras. And we have on occasion with our 

structure with the JCCT and others to engage them and at times 

get them to comply or at least take a step back. 

As I referenced to Senator Gillibrand, we are not there with 

them yet. We are exceptionally frustrated. I will tell you, it is generally not our practice to comment publicly as to whether we are 

going to take legal action, but I will tell you, we are exploring every 

alternative and every enforcement tool available to us to get India 

to open up their markets on a number of agriculture issues. 

I mean, we have raised—I was in India twice. Last year, I met 

with them directly about it. Ambassador Marantis just came back. 

Ambassador Islam Siddiqui, who is our Chief Agriculture Negotiator, we have used every tool of diplomacy we have, but we are 

going to be examining everything else in our toolbox to see if we 

can’t get them to behave differently. 

Senator STABENOW. Well, I would encourage you to use the tools 

that need to be used. 

One other area as we look at barriers, and this relates to maximum residual levels as it relates to pesticides. This is an area I 

have raised, as well. For example, Michigan’s cherry exporters face 

an arbitrarily low MRL, again, not based on science. I have heard 

a number of stories that our trading partners block our exports, requiring certain pesticides be used in areas where we have banned 

them in the U.S., but they are requiring that they be used when 

we export. We have approached Japan about cherries directly, my 

office has. When we look at resolving these types of issues, it is absolutely critical to have involvement from all of our food agencies, 

as well, the FDA, FSIS. 

As the lead agency on trade, what are you doing to work with 

those partners to resolve these challenges, because this is a very 

significant type of barrier for our specialty crops right now as it relates to pesticides and we need to address that. 

Ambassador Kirk. Senator Stabenow, first of all, thanks for 

bringing this to our attention. We have worked with your producers, because you do have a very discrete, I think, fly infestation 

that can only be treated by one insecticide—— 

Senator STABENOW. Right. 

Ambassador Kirk. —and we are working with you on that. The 

good news is we have, because of your bringing this to our attention, we have gotten Japan to adopt a protocol on these inspections 

similar to the one we are using. The difficulty we have is you have 

a very discrete challenge. The good news, we are working both with 

USDA and, in this case, the EPA. The EPA has looked at the issue 

of the product used in your case and we are working with them to 

submit that data to Japan to see if we can’t get them comfortable 

with the application of that. 

23 

Senator STABENOW. Thank you. I see my time is up. Thank you, 

Madam Chair. 

Chairman LINCOLN. Senator Klobuchar? 

Senator KLOBUCHAR. Thank you very much, and thank you very 

much, Ambassador Kirk, for being here. 

My State is the seventh largest agriculture export State in the 

country, and in 2009, our farmers exported nearly a third of what 

they produced, which brought in $4.3 billion to our State. And 

when I look at our economy in Minnesota, the fact that our unemployment rate is only at 6.8 percent, a lot of it has to do with our 

rural economy, but also the value of exports across the board. And 

that is why I have been very focused on the export issue, head up 

the Export Subcommittee in the Commerce Committee. 

And I wondered, first, on a broader way, could you update us on 

the President’s initiative to double exports in the next five years, 

what has been happening? Senator LeMieux and I have been trying to get a bill with the small business bill to help out with the 

Foreign Commercial Service, but in a general way, what is the status of that? 

Ambassador Kirk. The good news, Senator, is exports this year 

are up almost 17 percent over what they were last year—— 

Senator KLOBUCHAR. Although they were at an all-time low last 

year. 

Ambassador Kirk. Well, but they were at an all-time low all 

around—— 

Senator KLOBUCHAR. Okay. All right. Okay. 

Ambassador Kirk. —if you look at that base, we are trending up. 

Senator KLOBUCHAR. Okay. 

Ambassador Kirk. Exports accounted for the highest percentage 

of our GDP growth ever, at 13.7 percent, and economists are telling 

us that we contribute now to the underlying economy. This is consumer spending. Now, that is not enough. We are doing a number 

of things through the Export Initiative, including what you referenced, the President asking for more resources, counselors for the 

SBA, in particular, to help small businesses begin to engage in exporting. He has asked for more Commercial Services Officers 

through the Department of Commerce. We are looking to add—— 

Senator KLOBUCHAR. And that is what our bill is in the Small 

Business Committee. 

Ambassador Kirk. Yes, and that would be most helpful. We will 

be submitting a more formal report to the President in September 

that he asked to map out some of the matrix that Senator Baucus 

and others have referenced. 

Senator KLOBUCHAR. Thank you. People have talked a lot about 

China. I wanted to focus on what happened in April 2009 with the 

H1N1 virus and then the closing of the market to U.S. pork. As everyone knows, the H1N1 virus, there was never proof that it was 

spread through contact with pork and blaming the virus was a blatantly unscientific excuse, as China’s Agriculture Minister was 

even quoted saying that consumers can’t contract the virus from 

pork products. 

What recourse and authority does the U.S. have when a country 

blocks a product for such a clearly fraudulent reason, and is this 

24 

kind of action lawful under China’s Free Trade Agreement and 

WTO rules? 

Ambassador Kirk. First of all, Senator, the action was not lawful. 

It was not China. I think 28-some countries moved to block U.S. 

pork products, both prepared and otherwise. In this case, we knew 

we had an actionable case in the WTO. I would tell you, in terms 

of your previous question about our working across government, I 

think this was an example where we moved very quickly, from 

President Obama down to Homeland Security Director Napolitano, 

Secretary of Commerce Locke, Vilsack, and myself. We all got to 

work to try to get these markets back open so we wouldn’t be in 

a three-to five-year process. And as a result of that, there were 

seven or eight major economies within a year that reopened their 

markets to pork. 

So through the JCCT in particular, we were able to get China 

to open its market to pork. We still have an issue with China with 

respect to their blocking pork that utilizes ractopamine. But for 

that that doesn’t utilize that, the pork exports have resumed and 

we are shipping pork back into that process. 

Senator KLOBUCHAR. Right, and I do appreciate, as Senator 

Chambliss and others have mentioned, the work that you have 

done in reopening some of those markets. 

The other thing about this is the Mad Cow Disease, where we 

saw the same kind of thing happen. Major markets are still closed 

to American beef products. I assume there is work being done to 

reopen them. But one of the things that I thought would be helpful 

here, while we all know H1N1 had nothing to do with pork, but the 

other countries, many of them seem to claim food safety all the 

time as a reason, and do you think it would be helpful to pass a 

food safety bill to get at some of this? 

Ambassador Kirk. Senator, I think any attention we can bring to 

the security of our food chain and food safety would be most helpful. 

And I would say, if I could, I know many times we beat up on 

the WTO, but after the H1N1 virus, we reached out and immediately had a letter signed by the WTO, the OIE, all of the international agencies related to food health safety that declared and 

issued a very definitive statement that there was no risk to humans from consuming prepared pork products. 

Senator KLOBUCHAR. Okay. And then one last thing. Are you 

looking into this honey issue at all, which Senator Schumer has 

coined ‘‘honey laundering’’? 

Ambassador Kirk. I will be now. 

[Laughter.] 

Senator KLOBUCHAR. There is a—— 

Ambassador Kirk. Senator Schumer has talked to me about cows 

and apples, but I am sure we will have an opportunity to get up 

to date on that. 

Senator KLOBUCHAR. Okay. Very good, because we care about 

that in Minnesota, as well. Thank you very much, and we will 

write you about the honey issue. 

Ambassador Kirk. Thank you, Senator. 

Senator KLOBUCHAR. Thank you. 

Chairman LINCOLN. We have a lot of honey in Arkansas, as well. 

25 

Mr. Ambassador, I am going to run to vote and I just wanted to, 

in case I miss you, as Senator Chambliss will take over and keep 

us going in the hearing, but thank you so much for your work. I 

think you have done a tremendous job and I am grateful to you. 

I appreciate our conversation on Russia and we look forward to 

working with you in the days ahead, particularly on that. So thank 

you very much. 

Ambassador Kirk. Madam Chairman, thank you for your leadership, and I thank this community for your advocacy of our trade 

efforts. 

Chairman LINCOLN. You bet. All right. Senator Chambliss, I am 

going to hand it over to you, and I think Senator Roberts is next. 

Senator ROBERTS. I appreciate it. There are two votes, Madam 

Chairman, so I am going to have to be brief. I hear my colleagues 

laughing. 

I am going to go through the obligatory facts and figures about 

Kansas, and the same thing applies to Texas, I think, in regards 

to the necessity of exports to our economy. We have to export half 

of our wheat acres, one-third of all planted acres. We are the top 

beef processing State. That might come as some surprise to you, 

being from Texas, but we have more cattle than people. They are 

in a better mood, by the way. 

[Laughter.] 

Senator ROBERTS. At any rate, I am very much attuned and 

agree with the Chairman of the Finance Committee that we have 

a real problem on our hands, an ongoing challenge on our hands. 

I hope we can reopen our foreign beef markets in the post-BSE 

area. I think we have made some progress, and that has to go to 

your credit to get our trading partners to really start to rely on 

sound science instead of being governed by fear and politics. 

But I am concerned about the anti-trade sentiment in Congress, 

which I think has stalled action on a number of opportunities, and 

it has been mentioned before, South Korea, Panama, and Colombia, 

more especially Colombia and what Senator Lugar was talking 

about. We have a new president. The FARC is getting active again. 

Just as they have apparently won that battle, here they come back 

again. That is sort of the history of those kind of things. But they 

are being aided and abetted by Hugo Chavez, who is the new Castro, self-declared, in the area. So it is a very dicey situation. 

And then Senator Johanns pointed out the 45 percent drop in exports in 2010, $811 million for all farm commodities, 87 percent 

drop in wheat exports to Colombia. This is not only an economic 

situation, but it is a national security situation, as well, and the 

same thing applies to South Korea, given the relationship with 

North Korea and all that is going on. And so trade, more especially 

agriculture trade, can level that situation out a great deal. You 

know that. I don’t have to tell you that. 

You indicated you are going to make every effort to— and let me 

say you have done an excellent job, a great job with very difficult 

circumstances to try to emphasize the value of our agriculture 

trade. But you said that we need to reform their behavior and get 

them to come to the table, and we need a compelling use. Well, I 

don’t know what on earth would be more compelling than the economic situation we face in this country and our national security 

26 

concerns and the fact that we have other countries taking over our 

markets. I mean, that is pretty compelling to me, if we just get 

past basically what is opposition by labor in this country and by 

some in the environmental community—I emphasize some. 

I note the story in the Wall Street Journal, I don’t know if you 

have read it, but it is a pretty good headline: Obama courts labor 

support for trade deal. I hope he can do that. But he said at the 

Group of 20 Nations Summit in Seoul in November, already referred to by the Chairman and Senator Chambliss, he has made it 

a centerpiece of his efforts to boost U.S. exports and job growth to 

convince labor that the matter is particularly sensitive now as 

Democrats try to retain union support in advance of the mid-term 

elections. I hope we don’t have that interfere in our efforts to the 

degree that we don’t make any progress. 

But interestingly enough, you have said—well, not you personally, but the USTR, so I guess that is you, filing a complaint 

against Guatemala for allegedly—I emphasize allegedly—violating 

workers’ rights under an existing trade accord with the country, 

that will hopefully reassure labor in this country that it will reflect 

labor concerns and talks over any accord with Korea. 

I would hope that the trade agreement in Korea would stand on 

its own merits and we wouldn’t have to run around finding different countries where they are allegedly violating workers’ rights, 

or say in Colombia that the government is not really treating labor 

leaders there in the proper fashion, well, let the FARC take over 

and see what happens to them. I mean, that doesn’t make any 

sense. 

Here we are, filing a complaint against Guatemala for allegedly 

violating workers’ rights, not to really further our efforts with Guatemala, but to prove to labor in this country to quit opposing these 

FTAs in the three countries that we have mentioned over and over 

and over and over again for 18 months, and it seems like we are 

treading water. I don’t know what—I think your primary challenge 

is to convince the labor community and the environmental community in this country that these agreements are in our best interest. 

Would you respond to that? 

Ambassador Kirk. Senator, let me thank you for your observations about our efforts to advance not only agricultural exports and 

others. 

Secondly, I would only say to you, and I want to be careful, I 

didn’t see the article you referenced, the decision we made on Guatemala stands on its own. The decision by the President to announce, I guess, what, 30 days ago to move forward with Korea 

stands on its own. And neither of the two go hand-in-hand. Our enforcement efforts are based on the simple premise that we believe 

the American public have raised a legitimate concern that the 

United States hasn’t paid as much attention to enforcing our trade 

deals and holding our partners’ feet to the fire sometimes as we 

have been in just opening new markets. 

So it was the right thing to do in Guatemala. The case was filed 

two years ago. We had extensive investigations with the Department of Labor and we think it is important that Guatemala live 

by the terms of its agreement. 

27 

The Korea, Panama, Colombia agreements will each stand on 

their own merits. But I would again submit to you that the time 

that we have invested in listening to not only those of us who want 

me to put my foot to the pedal and just go forward with these 

agreements, but, frankly, those that have raised concerns, I think 

it is time that is well spent and will allow us to get to where you 

and I would like to go, be in a position to bring these agreements 

to Congress so that we can move forward. 

Well, I think you are working—I would ask my distinguished colleague, the Ranking Member, for an additional minute or two, if 

that is permissible. 

Senator CHAMBLISS. [Presiding.] Without objection. 

Senator ROBERTS. I thank my friend and colleague. 

I don’t know what comes first. If you have a trade agreement— 

I know the situation with China. They are making trade agreements with a whole bunch of folks and the trade with China is exploding. As a result, you have seen even labor strikes in China. 

Who would have thought you would have seen a labor strike in 

China five years ago. I mean, that would not have been possible. 

So if you have the trade agreement and you get the benefits of economic trade and the wherewithal in terms of individual citizens improve and workers’ rights improve, but you had the trade agreement first and then you had the trade and then you have the 

progress. 

Now, it seems to me we get the cart before the horse if we, in 

fact, insist on labor concerns or criteria—I don’t know what they 

are other than just people making speeches, and the same in the 

environmental community. So we put a criteria on a sovereign 

country and say, you have to live up to the criteria that we think 

is good for you. Well, I will tell you what. If I am the sovereign 

country and I find another person that is going to sign a trade 

agreement with me without that criteria, I do it, and I think that 

is what has happened. 

So you have got to figure out if you make the speech and you are 

satisfying, you know, the labor movement in the United States, if 

you satisfy the environmental community, more especially before 

November, that is one thing. But if you pass a trade agreement 

and you achieve those same things actually on the ground, that is 

another thing. Now, I don’t know if that is a question or not, but 

please feel free to respond. 

Ambassador Kirk. Well, I will accept the ‘‘or not’’ part of that 

question, if that is permissible with you, Senator. 

[Laughter.] 

Senator ROBERTS. Okay. Well, thank you very much for appearing and thank you for the job that you are trying to do. I think it 

is very challenging, but I agree with the Chairman of the Finance 

Committee. There is no need to be holding hearings if we are treading water on trade. We have done that for 18 months. 

I thank the Senator. 

Ambassador Kirk. Thank you, Senator. 

Senator CHAMBLISS. Ambassador Kirk, Senator Thune has indicated he wants to come back, so we are not going to let you leave 

until he gets back here. 

[Laughter.] 

28 

Ambassador Kirk. I know you have another panel to hear from, 

as much as I am enjoying this engagement. I certainly don’t want 

to—— 

Senator CHAMBLISS. Well, we are not going to hold them up too 

bad. 

Let us talk for a minute more about the situation involved in the 

export of chickens into Russia. I know we had some conversation 

about this. We thought this was a done deal, and then all of a sudden, I understand last Friday afternoon we hear from the Russians 

that they are not going to let imports into their country without 

having inspectors on the ground in the United States. What can 

you tell us from an update standpoint on where we are there and 

what do we need to do as policy makers to try to provide the right 

kind of assistance to you on this issue? 

Ambassador Kirk. Well, first of all, your recitation of the recent 

events, unfortunately, is a correct one. We were as surprised as 

you. As you know, when President Medvedev was here just last 

month, this was an issue that rose to the level even of President 

Obama and Vice President Biden, all of us rose with President 

Medvedev. President Obama and Medvedev directed the trade ministers at that time to sit down and see if we couldn’t come up with 

a resolution of this poultry issue, and President Obama was, frankly, very honest that Russia’s inability to just sort of meet basic 

agreements and commitments was one that sort of clouded our 

thinking in terms of our overall objective of having Russia in the 

WTO. 

We negotiated an agreement to come up with a protocol to allow 

us to resume poultry shipments. We had some difficulty, frankly, 

in getting Russia to sign that. We thought we had it signed last 

week. Secretary Vilsack and, again, Secretary Siddiqui and our 

team have been on the phone almost daily with our counterparts 

with Russia. We thought we had this issue put to bed Friday. The 

Secretary of the USDA, as you know, had put out regulations in 

terms of certifying the plants here. We felt the matter was put to 

bed. We had poultry packed and ready to go. Then we learned of 

this newest challenge. 

So, one, I know Secretary Vilsack and our team are reaching out 

to the Russians again to see if we can’t get them to adhere to the 

agreement they have made, and I would encourage you, Senator, 

to express your sentiments to the Russians in whatever way you 

feel is appropriate. But we think it is just not too much to ask to 

get them to agree what they—I mean, to live up to an agreement 

they signed just three weeks ago. 

Senator CHAMBLISS. Well, again, we appreciate your efforts on 

this. I know you have been very diligent on it and the Chairman 

and I will talk about some way that we might impress upon the 

Russians how important this is to us. When you have a deal and 

the deal is done and you are supposed to stick by it, and here we 

are not being able to trust the Russians to keep their word on the 

import of chickens into Russia, and yet we are in the process, and 

I am one of those who is on the fence on the issue of whether or 

not trust the Russians from the standpoint of the issue of nuclear 

weapons. 

29 

So this type of action on the part of the Russians does not benefit 

them in the eyes of a lot of policy makers who are trying to make 

up their mind relative to the START treaty. If we can’t work out 

a deal on chickens and they keep their word, what can we expect 

from them on inspection of nuclear weapon facilities? 

Going back to the issue that we touched on a little bit earlier relative to West African cotton producing countries, recent reports 

have indicated that those countries, also known as C4, plan to step 

up pressure on the United States and the EU for what they consider unfair trade practices. This comes at a time when world 

prices and demand have, frankly, improved pretty dramatically. 

Have there been any recent discussions between the United States 

and the C4 on this issue? 

Ambassador Kirk. Senator, there have, and your question is actually very timely. You may know or may not know, we actually 

just concluded yesterday the Ninth Annual AGOA Forum, the African Growth and Opportunity Act, and this is the ten-year anniversary of that, and obviously a number of members of the C4. We had 

35 trade ministers, commerce ministers, ambassadors here, and we 

had a number of individual bilateral meetings with them. 

You should not be surprised that after our ability, again, working 

with the Department of Agriculture to avoid what could have been 

some pretty devastating retaliation by Brazil over the cotton case 

they filed against us, that the C4 have intensified their interest in 

this. But we continue to press upon them that, first of all, a resolution of U.S. cotton subsidies and other issues is only going to occur 

through a balanced conclusion to the Doha Round. 

But secondly, we have also been very honest in addressing with 

them underlying issues of desperately needed investment in Africa’s infrastructure that would have to be made separate and apart 

from whatever the United States may do or the Europeans may do 

in terms of our approach to cotton support, that if we were to resolve those issues right now, the reality is the principal beneficiaries would be Brazil and other countries that have much more 

advanced support programs and infrastructure to be able to export 

cotton. 

So I don’t know if that satisfies them. These are truly some of 

the poorest economies in the world. But at least we have tried to 

engage them in a much more honest discussion about what all has 

to happen to increase their export competitiveness. 

Senator CHAMBLISS. Senator Thune? 

Senator THUNE. Thank you. I appreciate the Senator from Georgia giving me an opportunity, and Ambassador, thanks for your indulgence, too, as we try and work around the votes. 

I just want to read a quote to you from a U.S. Chamber of Commerce study, and it says, and I quote, ‘‘If the EU and Canada implement their Free Trade Agreements with Korea and Colombia 

and the United States does not, exporters in the EU and Canada 

will enjoy a competitive advantage over U.S. exporters in the Korean and Colombian markets. Specifically, failure to implement the 

U.S. Free Trade Agreements while our trading partners go forward 

with their agreements would lead to a decline of $40.2 billion in 

U.S. exports of goods and services and U.S. national output failing 

to grow by $44.8 billion. The study estimates that the total net negVerDate Nov 24 2008 04:27 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 C:\DOCS\66274.TXT MICHA
30 

ative impact on U.S. employment from these trade and output 

losses could total 383,400 jobs.’’ 

I guess the point I am making is that this issue really comes 

down to, when you are talking about growing the economy and creating jobs, this is about economic growth. We are trying to get back 

on track here and get the economy growing again. There are tremendous export opportunities that are available to us that we are 

not able to access because we haven’t gotten these implementing 

agreements submitted to Congress and moving forward with what 

I think are almost—these just seem like, for the most part, nobrainers in terms of these trade agreements. 

I guess my question for you has to do with regard to Colombia, 

Panama, and South Korea. Can you quantify for the committee the 

amount of tariffs that our agriculture industry has paid to each of 

these countries since these Free Trade Agreements have been 

signed? 

Ambassador Kirk. Senator, I don’t have that information now. 

We will get that information for you, if you don’t mind, and resubmit that to you. What I would say is we have been working very 

closely with the Chamber and others that are interested in Korea, 

and for the reasons that you articulated in reading the Chamber’s 

statistics, it was a rationale both behind the President’s announcement not only at the G–20 Summit in Canada, but frankly, when 

in his State of the Union people only heard the part of the statement about doubling exports. But he also spoke to the reality of us 

being in a very competitive global environment. 

Now, I want to make it plain. Our rationale in moving forward 

is not because Korea has signed a Free Trade Agreement with the 

European Union and Canada. That certainly would not be to our 

advantage. 

I would like to give you the other statistics. If we get this done, and I believe we will, there is a $10 billion upside for us, and rather than losing jobs, the opportunity to add 70,000 jobs. And while 

I will get you the statistics and try to get the analysis you wanted 

looking back, but looking forward, the one great advantage is if we 

can get this Korea deal done and signed, is that about two-thirds 

of our tariffs on agriculture go away immediately. And then many 

of them will be phased out over ten years. 

So the upside in Korea is a huge market for us in terms of agricultural exports already. So it represents a very real opportunity 

for us to not only grow agricultural exports, but to help create jobs 

and grow the economy, and we think that is worth fighting for and 

that is one of the reasons the President has asked us to try to get 

this done. 

Senator THUNE. Have the outstanding issues that the administration feels need to be resolved with these various countries been 

communicated to those countries, and what has been the response? 

Ambassador Kirk. In the case of Korea, certainly, I think it is 

generally accepted that concerns over the market access in autos, 

and you heard Senator Baucus and others speak about beef. 

In the case of Panama, there are a number of issues that we 

wanted to see them address on labor and the rights of workers and 

justice. And I want to make it plain. We are not trying to impose 

our U.S. labor code on other countries, but there are some genVerDate Nov 24 2008 04:27 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 C:\DOCS\66274.TXT MICHA
31 

erally accepted provisions encompassed in the May 10 agreement 

we did with Peru that had support from Democrats and Republicans, we don’t think are too much to ask. And in Panama, we did 

have the intervening factor of the OECD identifying Panama as a 

tax haven. So in our defense, I would say the issue of their coming 

up with an acceptable answer for that is not only one for the U.S., 

but with all of Panama’s other trade partners. But we are making 

progress on that. 

In the case of Colombia, we did publish a notice in the Federal 

Register last August, one, so we could try to move just beyond 

some of the rhetoric over violence and really drill down and come 

up with a list that we can present to Colombia. We are now in the 

interagency review process to refine that, but again, trying to work 

in an expedited but thoughtful manner to meet the President’s 

goal, as well, to present this to you sooner rather than later. 

Senator THUNE. With the new Colombian administration about 

to take power, does the outlook for the Free Trade Agreement with 

Colombia improve? 

Ambassador Kirk. Yes. In fairness, Colombia has been ready to 

do this deal, because I want to make it plain that we are anticipating as good of a working relationship with the new Santos administration. But President Uribe and his team and Ambassador 

Barco have been wonderful to work with. So we don’t see any break 

in the good relationship we had with them, and frankly, a lot of 

it has been our trying to work through some of the issues on our 

side so we can move forward. 

Senator THUNE. And that is, I guess, what makes this so sort of 

perplexing, is that it seems like that one has been teed up for a 

long time and great cooperation from the country. So I would hope 

that, because as the President did say in the State of the Union, 

which is now many, many months ago that he wanted to double exports, and this is critical if we are going to be able to do that, and 

if we don’t get these agreements signed, we are going to lose significant market opportunities to competitors. And I think the producers in places like South Dakota and other areas in America 

where we have strong, vibrant agricultural economies are going to 

really lose out. 

So I will share and echo the frustration you have heard from 

many of my colleagues here today that these things aren’t getting 

done and would urge you to move forward as quickly as possible. 

Ambassador Kirk. We will do so, and Senator, we will need your 

support in that effort. Thank you. 

Senator THUNE. Thank you, Mr. Chairman. 

Senator CHAMBLISS. Mr. Ambassador, again, we thank you for 

coming today, and as you told the Chairman and I before the hearing this morning, it is the first time in a long time we have had 

the Trade Ambassador appear officially. Both Ambassador Portman 

and Ambassador Schwab used to come by informally, but we thank 

you for coming in and officially testifying at a hearing before the 

Agriculture Committee. 

I would simply say that our relationship with South Korea is 

very strong. We have got a brand new Kia plant that has opened 

in my State in the last several months. It has created 1,500 jobs 

for Georgians directly and probably at least another 1,500 at supVerDate Nov 24 2008 04:27 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 C:\DOCS\66274.TXT MICHA
32 

plier facilities around the Western part of my State, the Eastern 

part of Alabama. We are very pleased with our relationship with 

the Koreans there. 

That being said, I think what you are going to find is pretty near 

unanimous consent around here with the statements of Senator 

Baucus. So I urge you to continue to proceed down the road of trying to conclude this, and we look forward to that being the case. 

But thank you very much for being here today and for your continued efforts in this. 

Ambassador Kirk. Senator, thank you so much, and we would 

welcome the opportunity to come back and visit with the committee 

at any time. And I particularly want to thank you for working with 

us on a number of issues important to American agriculture. 

And if I might say this, and since you referenced the Kia plant 

in Georgia, and I know the issues on autos are important. I mean, 

there are 790,000 Kias sold in the United States, less than 7,000 

American cars of any kind sold in Korea, and that is unacceptable. 

But, on the other hand, with the increased production in the U.S., 

the number of Korean imports have actually declined as more and 

more of their cars sold are being produced here in the United 

States, which is something we would like to see, so that they are 

made by American workers. 

But thank you for your encouragement and we look forward to 

continuing to work with you and all the members of the committee. 

Senator CHAMBLISS. Great. Thank you very much. 

And as the Ambassador exits, we will ask our second panel, Mr. 

Danny Murphy, Vice President of the American Soybean Association from Canton, Mississippi; Mr. Joe Mencer, Board Member of 

the USA Rice Federation, USA Rice Producers Group, and Arkansas Rice Producers Group, Lake Village, Arkansas; Mr. Duane 

Rhodes, Vice President of International Sales, Tyson Foods, on behalf of the National Chicken Council; and Mr. Brent Roggie, General Manager and Chief Operating Officer of the National Grape 

Cooperative Association, on behalf of the National Council of Farmer Cooperatives, to come forward. 

[Pause.] 

Chairman LINCOLN. [Presiding.] All right. I thank the committee 

for their patience, and certainly for our panelists, we want to welcome you all. And again, I want to add my special thanks to Joe 

Mencer, who is a rice, cotton, corn, and soybean farmer from Lake 

Village, Arkansas, where he has been farming for 30 years on land 

owned by his family for 75 years. He serves on the USA Rice Federation Board in the Executive Committee and the USA Rice Producers Group Board as Vice Chairman of the USA Rice Council. 

Joe, thanks for being here. We are grateful to you. 

And also, Duane Rhodes of Springdale, Arkansas, Vice President 

of Export, Poultry, and Prepared Foods for Tyson Foods, where he 

has worked for the past 25 years. He is Vice Chairman of the 

Board of the U.S. Poultry and Egg Export Council. 

We appreciate both of you all being here from Arkansas as well 

as our other panelists, Danny Murphy, who is my neighbor there 

in Mississippi. We are grateful to you. And Brent Roggie, thank 

you so much for being here, as well. 

33 

We are going to now move to your testimony, and I believe if it 

is appropriate—Senator Cochran, have you made your comments? 

Would you like to speak? 

Senator COCHRAN. Madam Chairman, I would like to have an opportunity to welcome—— 

Chairman LINCOLN. Good. 

Senator COCHRAN. —one of my favorite constituents, who is a 

member of this panel. I want to welcome Mr. Danny Murphy of 

Canton, Mississippi, and to thank him for his leadership and service to both his community and the agriculture community in my 

State. 

He and his wife and two sons are here today. He represents the 

State of Mississippi on the American Soybean Association Board. 

He is also an active farmer with his brother. They farm 1,500 acres 

of soybeans and corn in our State. He has served in numerous positions of leadership since his election to the Board of the American 

Soybean Association back in 2005. 

I am glad to see him here and to extend the welcome to him and 

his family. We are happy that he could be here. 

Chairman LINCOLN. Great. Thank you, Senator Cochran. 

We are going to wait and see. Senator Gillibrand wanted to be 

able to be here, so Mr. Roggie, I will give you a better introduction 

as we get down to you, but we will begin with Mr. Murphy. 

STATEMENT OF DANNY MURPHY, VICE PRESIDENT, 

AMERICAN SOYBEAN ASSOCIATION, CANTON, MISSISSIPPI 

Mr. MURPHY. Good morning, Madam Chairman and members of 

the committee. I am Danny Murphy, a soybean producer from Canton, Mississippi, and Vice President of the American Soybean Association. ASA appreciates the opportunity to appear before you 

today to provide our views on international trade issues, including 

the export promotion provisions of the 2008 farm bill. 

Soybeans are the second largest commodity in the United States 

in terms of annual acreage and value, with 78 million acres planted 

and a farm-gate value of $32 billion in 2009. Soybeans and soybean 

products are the most important U.S. export commodity, with sales 

exceeding $21 billion last year. This represents over 50 percent of 

U.S. soybean production and 21 percent of total U.S. agricultural 

exports in 2009. 

As producers of the largest export dependent commodity, soybean 

farmers have historically made international trade a top priority. 

ASA has actively participated in negotiations on and strongly supported enactment of every multilateral, regional, and bilateral 

trade agreement the United States has engaged in. We have 

worked closely with every administration to ensure enforcement of 

these agreements, including their sanitary and phytosanitary provisions, and we have successfully protected access for U.S. soybean 

exports to foreign markets as new biotech traits have been introduced over the last 15 years. 

Looking to the future, the growth in world population and demand in developing countries for an improved diet, including more 

livestock products and vegetable oils, indicates a pressing need to 

increase soybean production over the next several decades. With 

limited opportunities to expand U.S. soybean acreage, most of this 

34 

increase will need to come from raising yields. ASA has strongly 

supported greater funding for agriculture research, including the 

President’s request for $429 million in the fiscal year 2011 funding 

for the Agricultural and Food Research Initiative. We are also 

working closely with companies that are developing new traits to 

increase soybean yields, protein and oil content, and other quality 

characteristics. 

ASA was pleased with the President’s commitment to double the 

value of U.S. exports under the National Export Initiative. Efforts 

to contribute toward achieving this goal in the agricultural sector 

will require Congressional approval of the pending Free Trade 

Agreements with Colombia, South Korea, and Panama, negotiation 

of new Free Trade Agreements with key importing countries, and 

progress on the Asia-Pacific Economic Cooperation Regional Agreement. Delay in approving the Colombia Free Trade Agreement has 

caused us to lose over 50 percent of our market share for soybean 

meal. Negotiation of new Free Trade Agreements will require renewal of Presidential Trade Promotion Authority, which is a top 

priority for ASA. 

Action is also needed on legislation to normalize financial relations with Cuba. S. 3112, introduced by Senators Klobuchar and 

Enzi, would eliminate current financing restrictions as well as lift 

the ban on U.S. citizens traveling to Cuba. Cuba imported $284 

million worth of U.S. soybeans, meal, oil, and livestock products in 

2009. Normalizing financial relations would improve the competitiveness of U.S. soybeans and soybean and livestock product exports to the Cuban market. 

Turning to the trade title of the 2008 farm bill, ASA is one of 

the largest recipients of funds under the Export Promotion Program of USDA’s Foreign Agricultural Service, including $6.8 million under the Foreign Market Development Program and $5.1 million under the Market Access Program. These funds are matched 

with soybean farmer check-off dollars contributed by the United 

Soybean Board. ASA strongly supports maintaining funding for the 

export promotion programs at current levels for fiscal year 2011 

and increasing these levels in the 2012 farm bill. 

Finally, ASA continues to follow efforts to revive negotiations on 

the Doha WTO Trade Agreement. In December 2008, we joined 

other agricultural organizations in opposing the draft agricultural 

modalities framework known as the Falconer Text because it provides little assurance of improved market access for U.S. farm exports in exchange for major concessions on trade distorting domestic support. We stated at the time and repeat now that no agreement is better than a bad agreement. If the Falconer Text cannot 

be significantly changed, developing countries will need to make 

meaningful concessions during bilateral negotiations if the Doha 

Round is to be revived and completed. 

That concludes my statement, Madam Chairman, and I will be 

pleased to answer any questions you or other members of the committee may have. 

And I would like to add just a personal note that on behalf of 

the Mississippi farmers who were inundated with the rains last 

fall, we appreciate your work and Senator Cochran’s work on the 

disaster assistance. Thank you. 

35 

[The prepared statement of Mr. Murphy can be found on page 63 

in the appendix.] 

Chairman LINCOLN. Thank you, Mr. Murphy. And as somebody 

that has walked soybean fields with a machete chopping down coffee bean plants, we appreciate your leadership on behalf of the 

American Soybean Association and those hard-working farm families out there across the country, so thank you. 

Mr. MURPHY. Thank you. 

Chairman LINCOLN. And we will continue to work hard on that 

disaster assistance. 

Mr. MURPHY. Thanks. 

Chairman LINCOLN. Joe Mencer, who is a rice, cotton, and soybean farmer from Lake Village, just across the river from Mississippi. Joe, thank you for being here and for all of your hard work 

on behalf of growers not only in Arkansas, but across the country. 

STATEMENT OF JOE MENCER, BOARD MEMBER, USA RICE 

FEDERATION; BOARD MEMBER, USA RICE PRODUCERS 

GROUP; VICE CHAIRMAN, USA RICE COUNCIL; AND ARKANSAS RICE PRODUCERS GROUP, LAKE VILLAGE, ARKANSAS 

Mr. MENCER. It is my pleasure, Madam Chair. I would like to 

thank you and Senator Cochran for the opportunity to appear here 

today. I appear on behalf of USA Rice Federation and the USA 

Rice Producers Associations. Our two organizations represent rice 

producers in all the major rice producing States. We represent millers, merchants, exporters, and allied businesses. 

As you know, Arkansas is the largest rice producing State. We 

grow about 1.5 million acres, average, on an annual basis, and that 

is about half of the U.S. crop. Rice is also produced on another 1.7 

million in five other States. Last year, U.S. farmers produced a rice 

crop of over $3 billion in farm-gate value. This production and subsequent sales generated $17.5 billion in total value added to the 

U.S. economy from rice production, milling, selected end users, and 

had the employment effect of contributing 127,000 jobs to the U.S. 

labor force. 

The U.S. rice sector is a key player in the global rice market and 

the economic health of our industry is tied to exports, even though 

we only produce about two percent of the world’s production. We 

export rice across the globe, with a major presence in North and 

Central America, Northeast Asia, the EU, Turkey, the Middle East, 

and Africa. 

Trade policy is the key focus of our industry, since we are greatly 

dependent on export channels to market nearly half of our annual 

production. Over the past 25 years, U.S. rice exports have risen 

from just under two million tons to nearly 3.5 million tons, and 

that is largely because of policy gains made in key rice consumption markets and the joint international promotion work of the rice 

industry and the USDA. We believe that significant additional exports can be made if the public and private market promotion and 

development partnership with USDA is continued in combination 

with an aggressive trade policy agenda. 

The U.S. rice industry receives $5.7 million in our current fiscal 

year from the Market Access Program and Foreign Market Development Program to promote rice in foreign markets. For every one 

36 

dollar that is received in these programs, the industry in turn 

spends $3.91. 

Trade agreements are central to our current level of U.S. rice exports and for future expansion. Prior to NAFTA, rice exports to 

Mexico faced high tariffs, discrimination against milled rice, and 

government control of imports. Today, U.S. rice trades duty-free 

into Mexico and it is now the number one export for U.S. rice, with 

over 833,000 tons in the 2009 crop year. 

Future trade agreements must be inclusive of all tariff lines, 

must reflect a level of participation by advanced developing countries commensurate with their economic development, and include 

market access gains for U.S. agriculture while preserving the ability of U.S. agriculture to maintain a viable domestic farm safety 

net. 

One key export market that can be opened very easily and requires only action by the U.S. Government is Cuba. Our industry, 

along with much of U.S. agriculture, favors an opening of trade and 

travel to Cuba. The ability of American citizens to travel freely to 

Cuba and to engage in the full range of commercial activities in 

Cuba is essential to a successful and meaningful market establishment there. 

Cuban rice imports have averaged nearly 600,000 metric tons annually for the last five years, and U.S. suppliers enjoy logistical advantages to meet this demand, but our current policy thwarts this 

advantage. U.S. rice sales to Cuba resumed in 2001 with the passage of the Trade Sanction Reform and Export Enhancement Act, 

until sales faltered following the 2005 regulation change by the Department of Treasury. This regulation effectively placed the U.S. 

administration between a willing buyer and seller. It impedes the 

ability of U.S. companies to export and should be permanently repealed. 

We also urge support and passage of legislation that would allow 

for open agricultural trade and travel to Cuba, and two such bills 

that would do this are S. 1089 and S. 3112. 

In terms of pending trade agreements, rice was completely excluded from the trade agreement with South Korea and it blocked 

us out of that market forever. We do encourage the agreements 

with Colombia and Panama and we urge Congress and the administration to move forward on those two trade agreements. 

Rice farmers and exporters are also facing a challenge in the European market now because of an accidental presence of the Liberty Link gene that was introduced into the rice crop in 2006, and 

we lost that market just overnight. We need the administration’s 

help to restore that market. After four years of market absence 

combined with high and complex tariffs on U.S. rice, duty-free competition from India and Pakistan, and the prospective threat of 

duty-free competition from the developing countries has set back 

U.S. exports into the European market. We are pleased to be working with Ambassador Siddiqui and others on Ambassador Kirk’s 

team to address our immediate access problems in the European 

market. 

We feel that there is a duty on brown rice imports in the European market that are not being met under the WTO requirements 

37 

and we need the support of this committee and the administration 

to try to get those duties removed from brown rice. 

And in summary, Congress and the administration should commit to restore normal commercial relations between the U.S. and 

Cuba, approve Free Trade Agreements with Colombia and Panama 

as well as South Korea. We don’t oppose that, even though we were 

left out. And we need to negotiate a balanced agreement in the 

Doha Round for future trade agreements that expand for access of 

U.S. rice and other agriculture exports into other countries. And, 

most of all, provide sufficient funds and resources and policy to direct USDA so they can carry out the important function of Export 

Market Promotion and elimination of phytosanitary and veterinary 

bases to trade. 

In closing, we would like to thank the committee for the opportunity to present rice’s issues here today and I would be happy to 

take any questions. 

[The prepared statement of Mr. Mencer can be found on page 50 

in the appendix.] 

Chairman LINCOLN. Thank you, Joe. We appreciate all that you 

do, and again, having walked a rice levee or two myself, we are 

grateful to you all with the U.S. Rice Federation and the Rice Producers Group and grateful for your leadership, as well. 

I should have noted earlier that we will hold our questions until 

everyone has given their testimony. 

Mr. Rhodes, thank you for coming to the committee, as well. We 

are grateful for your presence here. I would say a special thanks, 

as well, for your conversations earlier with the staff of the committee on the Russian poultry issue. Senator Chambliss and I had 

an opportunity to visit privately with the Ambassador, as well, and 

we will continue to be working with you all in the industry and 

others to really come up with the kind of resolutions that we need 

in an expeditious way. So we appreciate very much your input on 

that, as well. 

We look forward to working with you. So thanks for your leadership in the poultry industry and the livestock industry and we 

would love to have your testimony. Thanks. 

STATEMENT OF DUANE RHODES, VICE PRESIDENT OF EXPORT, POULTRY AND PREPARED FOODS, TYSON FOODS; 

SECOND VICE CHAIRMAN, USA POULTRY AND EGG EXPORT 

COUNCIL; ON BEHALF OF THE NATIONAL CHICKEN COUNCIL, SPRINGDALE, ARKANSAS 

Mr. RHODES. Well, good morning and thank you, Senator Lincoln, Senator Chambliss, and committee members, for the opportunity to present the U.S. poultry industry’s views on critical international trade issues. 

I am Duane Rhodes, Vice President of Export Poultry and Prepared Foods for Tyson Foods, Incorporated, based in Springdale, 

Arkansas. I also serve as the Second Vice Chairman of the USA 

Poultry and Egg Export Council. This morning, I am representing 

the National Chicken Council. NCC represents companies including 

Tyson Foods which produce and process about 95 percent of the 

chicken in the United States. Also, as Tyson is a major processor 

38 

and exporter of beef and pork, I will provide some thoughts on the 

exports of fresh meats, as well. 

To begin, I want to thank you, Chairman Lincoln, as well as 

Ranking Member Chambliss, for working closely with the administration to reopen the Russian market for U.S. poultry. A quarter 

of the Senate expressed in writing to President Obama the critical 

need to achieve a resolution of the six-month stalemate on U.S. 

poultry exports to Russia. This strong statement by the Congress 

on a difficult trade issue was a major factor in helping to convince 

the Russian President to conclude an agreement to restore U.S.- 

Russian poultry trade, at least at the end of June. 

Poultry exports to Russia, like poultry exports to most foreign 

countries, consist mainly of chicken leg quarters. In 2009, more 

than 19.5 percent of the chicken that we produced in the United 

States was exported, a record percentage. Exporting the ‘‘back of 

the bird’’ is critical to keeping the U.S. chicken supply in better 

balance for overall demand. 

With impediments to our two largest poultry export markets, 

Russia and China, poultry exports are down for 2010. Fortunately, 

there is some good news with beef and pork exports. Beef exports 

total $3.7 billion this year, just short of the 2003 pre-BSE levels, 

and pork exports are expected to be the second largest on record, 

at $4.5 billion. 

Across the poultry and meat sectors, we are optimistic that the 

U.S. Government focus on trade can yield very positive results. 

That is why we were pleased when President Obama called for 

doubling the U.S. exports in the next five years, including agricultural exports. The President’s plan, the National Export Initiative, 

sends a strong signal to foreign competitors that U.S. agriculture 

will become more aggressive in securing its fair share of the world 

market for our food and agricultural products. 

For our industry, we believe there are two critical components to 

making the President’s plan a success. First, the United States 

must have policies and programs in place to help U.S. agriculture 

compete effectively overseas. USDA’s Foreign Agricultural Service 

administers two important export promotion and market development programs, the Market Access Program, MAP, and the Foreign 

Market Development, FMD. Both programs will require increased 

funding to maximize agriculture’s contribution to the National Export Initiative’s goal. The bottom line is that all sectors of the U.S. 

economy and agriculture will need to be energized to meet the 

President’s goal. 

A second critical component is Congressional approval of the Korean, Colombian, and Panamanian Free Trade Agreements. These 

trade agreements should more appropriately be called Job Creation 

Agreements, because that definitely is what they would be for agriculture. According to a recent industry study, more than 29,000 

meat and poultry jobs would be added as a result of full implementation of the three FTAs. 

There is also no question that the FTAs and increased trade generally boost our overall economy. According to the USDA, for every 

$1 billion in agricultural trade, 9,000 American jobs are created. It 

is worth noting that leading agricultural export States, as ArkanVerDate Nov 24 2008 04:27 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 C:\DOCS\66274.TXT MICHA
39 

sas and Georgia, are well positioned to benefit from the increased 

trade. 

A final area that I would highlight for the committee is China. 

In recent years, exports to China have been a real success story for 

the poultry industry, and China was our second largest export market in 2009. However, earlier this year, China imposed very high 

preliminary anti-dumping and countervailing duties on U.S. chicken and chicken parts and these duties may soon be finalized. While 

our industry certainly disagrees with China’s rationale for these 

cases, the focus should be on the most effective way for U.S. poultry exporters to regain fair access to the China market. 

One effort that may prove productive in reestablishing trade in 

China is an industry proposal to settle the anti-dumping and countervailing duty cases by establishing a minimum selling price for 

a number of chicken parts. USTR and USDA have agreed to support this initiative and the Chinese government has also indicated 

a strong interest in such an arrangement. We would ask for this 

committee’s support for this initiative, as well. 

Another challenge for poultry for China concerns is China’s continued ban on imports of poultry either processed in or moved 

through U.S. States that have reported an incident of low-pathogenic AI. Unfortunately, China is not imposing or lifting these bans 

in accordance with World Health Organization OIE guidelines. For 

Tyson, the cumulative effect of these State bans, which includes 

the Chairman’s own State, is roughly 50 percent of our export capacity is blocked. This is a problem that could grow worse if not 

addressed. 

As this committee knows, there is great opportunity in China not 

only for poultry, but for beef and pork, as well. There is progress 

on the pork exports, but the beef industry still lacks a Market Access Agreement. We urge this committee and the administration to 

push for a beef agreement with China that will open the market 

to beef from cattle aged 30 months and under as an initial step, 

with additional market access phased in. 

In closing, although this list of issues facing U.S. poultry and 

meat exports is challenging and seemingly ever growing, we know 

that we produce the world’s highest quality products and we are 

optimistic about the future. In order to maximize poultry exports 

in the years ahead, we will need robust export promotion programs, 

expanded markets through Free Trade Agreements, and assistance 

in overcoming non-science-based sanitary and veterinary prohibitions. 

I appreciate the committee’s attention to these issues and will be 

happy to answer any questions. 

[The prepared statement of Mr. Rhodes can be found on page 66 

in the appendix.] 

Chairman LINCOLN. Thank you, Mr. Rhodes. 

Mr. Roggie, Senator Gillibrand had hoped to be here—I think she 

is going to still be joining us—but I would like to go ahead and introduce you, if I may. 

Brent Roggie, who grew up on a dairy farm in Upstate New York 

has served for the past ten years as General Manager and Chief 

Operating Officer of the National Grape Cooperative, representing 

members in New York, Pennsylvania, Ohio, Michigan, and WashVerDate Nov 24 2008 04:27 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 C:\DOCS\66274.TXT MICHA
40 

ington State. We know that your industries are vital both to the 

economy here in the U.S. as well as our exports and we are grateful that you are here today to give us your testimony, so thank you, 

Mr. Roggie. 

STATEMENT OF BRENT ROGGIE, GENERAL MANAGER AND 

CHIEF OPERATING OFFICER, NATIONAL GRAPE COOPERATIVE ASSOCIATION; ON BEHALF OF THE NATIONAL COUNCIL 

OF FARMER COOPERATIVES, WESTFIELD, NEW YORK 

Mr. ROGGIE. Thank you. Chairman Lincoln, Ranking Member 

Chambliss, and members of the committee, thank you for the opportunity today to testify on the importance of international trade 

in promoting U.S. agricultural exports. On behalf of National 

Grape’s grower members and the more than two million farmers 

and ranchers who belong to farmer cooperatives, I appreciate that 

this statement will be made part of the official hearing record. 

I am Brent Roggie, General Manager of the National Grape Cooperative. It is an agricultural cooperative that has 1,150 members 

who own and operate 46,000 acres of Concord and Niagara grapes, 

as was mentioned, in New York, Pennsylvania, Ohio, Michigan, 

and the State of Washington. I also serve on the Executive Council 

of the National Council of Farmer Cooperatives. 

National Grape actually owns Welch’s, which processes and then 

markets our members’ grapes in the United States and over 51 

other countries. Farmer cooperatives such as National Grape allow 

individual farmers, I believe, to truly participate in the food and 

fiber system all the way from the farm to retail. We have built 

well-known brands that you see every day on the supermarket 

shelves. We have also built the relationships and networks to help 

expand the demand for these brands and markets overseas. The 

earnings from these sales are returned to the farmer owners and 

help to provide market-based income from beyond the farm-gate. 

For National Grape’s grower-owners, the Welch’s brand is key to 

expanding market demand and increasing profitability, and foreign 

markets represent the greatest potential to do just that. Seventy 

percent of the world’s juice is consumed outside of the United 

States, and foreign juice consumption is expected to increase at 

four times the rate of U.S. consumption. While foreign markets account for 15 percent of Welch’s sales, they represent as much as 

26 percent of our growers’ income stream. 

USDA export promotion programs, such as the Market Access 

Program and the Foreign Market Development Program, play a 

vital role in helping farmers and their co-ops capitalize on these opportunities overseas. Both programs have been tremendously successful and extremely cost effective in helping maintain and expand U.S. agricultural exports. 

For example, by combining the assistance provided by MAP with 

a strong Welch’s brand, our growers have seen exports to Japan 

grow by 46 percent just in the last three years, with our volume 

increasing from 857,000 cases in 2007 to 1,251,000 cases in 2009, 

and MAP was vital to our success in that market. 

Many of my fellow farmer co-op leaders could also testify to the 

success that they have had in using brands to build market share 

both here and abroad. This branding differentiates the product in 

41 

the global marketplace and builds customer loyalty and confidence 

in quality. As such, the MAP Branded Promotion Program has 

been instrumental in leveraging farmers’ investment in their own 

co-ops and brands to grow in foreign markets. 

Over the next five years, National Grape plans to increase foreign market sales by at least ten percent per year and will be investing heavily to make this possible. Access to matching funds 

through MAP is critical to our ability to attain these sales goals 

and enable our grower-owners to remain profitable. Without access 

to MAP, the effectiveness of our overseas promotion programs 

would be greatly diminished. 

In addition, since promotion programs are allowed under WTO 

rules, many of America’s direct competitors have devoted considerable resources to market development, and MAP helps to level the 

playing field for American producers. 

As you prepare for deliberations on the 2012 farm bill, we strongly encourage the committee to maintain eligibility of farmer co-ops 

and their branded products under MAP. We also urge continued 

funding for MAP and FMD at $200 million and $34.5 million annually, respectively, as authorized under the 2008 farm bill. 

Passage of the Free Trade Agreements in South Korea, Colombia, 

and Panama would also help meet the goal of aggressively increasing exports. The situation that our U.S. grape growers face in 

South Korea illustrates this very well. Currently, our grape juice 

concentrate is subjected to a 45.5 percent duty, while Chile’s competing red grape juice tariff is minimal, and starting next January 

it is zero. That puts us at a distinct competitive disadvantage, and 

approval of the U.S.-South Korea FTA would eliminate this disparity. Despite the 45.5 percent duty, we have to maintain a retail 

premium of just 30 percent, so we are able to make up some of 

that, but not all of it. 

Other issues which will contribute to expanding U.S. agricultural 

exports include resolving outstanding sanitary and phytosanitary 

and technical barriers to trade, resolving disputes such as the one 

with Mexico over trucking, and a successful World Trade Organization Doha Round, one that makes for commercially meaningful advances in market access. 

In conclusion, thank you again for the opportunity to testify 

today before the committee, and thank you for your leadership on 

behalf of American farmers, ranchers, and their farmer co-ops. We 

appreciate your support of important agricultural export programs 

and policies. 

I would also like to mention to Chairman Lincoln, we thank you 

for co-chairing the Congressional Farmer Caucus. We appreciate 

your leadership in that area. 

[The prepared statement of Mr. Roggie can be found on page 79 

in the appendix.] 

Chairman LINCOLN. Well, thanks to all of you all for making sure 

that we know directly from the field how important things are and 

what we can do to be more helpful in terms of both job creation 

and maintaining a safe and affordable supply of food and fiber, not 

just for our nation, but for the world. 

Just quickly, I would give each of you all also a quick chance, as 

you represent the point of view of your producer groups, if there 

42 

is one single most important step that could be taken that would 

expand exports of your commodities, what do each of you all think? 

I know you have expressed some concerns, but if there is one single 

one that you would pick out of all of those, is there any one that 

from your point of view from a specific producer group? Anyone? 

Mr. Murphy? 

Mr. MURPHY. I would just say that we would like to make sure 

that the MAP and FMD programs funds are fully funded as authorized. I will add a second point, that we would like to see them 

applied to Cuba, if we could move forward with this other previous 

bill. 

Chairman LINCOLN. All right. Joe? 

Mr. MENCER. I would have to agree with Mr. Murphy. I have got 

two. It is hard to pick. A Free Trade Agreement with Cuba is vitally important to rice production in the State of Arkansas and the 

Mid-South. 

Chairman LINCOLN. Great. Mr. Rhodes? 

Mr. RHODES. I have got two, also. 

[Laughter.] 

Chairman LINCOLN. You all are breaking the rule, but it is okay. 

Mr. RHODES. Okay. Of course, we would love to get a finalized 

version on the Russian deal. That is on the top of everybody’s mind 

here, I am sure. And the other one would be that in China, that 

we prevail or get a solution on the countervailing duties and antidumping. 

Chairman LINCOLN. Great. 

Mr. ROGGIE. And with us, I would certainly agree with MAP and 

FMD I would also remind everyone of the USDA study that was 

recently concluded in March of 2010. For every dollar that was 

spent in MAP funding, a $35 return was shown in a cost-benefit 

analysis. It was just completed. So I would certainly like to have 

MAP and FMD fully funded, as they were in the 2008 farm bill, 

and certainly to have the FTA agreements that are currently under 

negotiation to be completed. And any others that could be started, 

that would be good, as were mentioned earlier this morning. 

Chairman LINCOLN. Okay. Thirty-five-to-one. That is pretty good 

odds. I am with you on that. 

Mr. Murphy, according to USDA economic research, 93 percent 

of all soybean acres planted in 2010 were planted with seed with 

one or more genetically engineered traits, so certainly acceptance 

of these GM crops in international markets is crucial. What more 

could be done by the U.S. Government to promote the benefits of 

agricultural biotech? 

Mr. MURPHY. I think we need to continue to work on it. Most 

countries do accept genetically modified traits, but there is always 

a constant challenge to make sure that when you have a new 

event, that it is accepted. The EU continues to be a problem, where 

they have resisted moving forward. I think efforts need to be made 

in the EU to encourage them to accept our products. 

Chairman LINCOLN. It sets a good example. I know that. 

Mr. Mencer, after discovery of those trace amounts of unapproved, the Liberty Link 601 gene in the rice supply in 2006, the 

EU implemented burdensome testing requirements on our rice 

which basically closed their markets to our product. I understand 

43 

that those testing requirements have finally been lifted, but the 

trade has not yet resumed. 

I mean, kind of following on the steps of Mr. Murphy there, what 

steps need to be taken for that to happen? Is there something that 

we can do, do you think, or any comments that we can make that 

would help resume some of that trade, building that confidence? I 

think those things could be very important. 

And I know you have mentioned Cuba, and I echo that. The average Cuban consumer eats 150 pounds of rice annually and 80 percent of that is imported. If these current barriers that we have 

with Cuba were relaxed, do you think the U.S. rice farmers could 

beat out the rice produced in Vietnam and Thailand for this market, where the Cuban imports are currently sourced from? 

Mr. MENCER. On the Cuban issue, we feel like that we have a 

better quality product than where they are importing the rice from 

now. Before the ban was put on back in the 1960s, we probably 

sent them 500,000 to 600,000 tons a year, and most of that came 

out of the Mid-South or Arkansas. We feel like that they prefer our 

rice. I think between the logistics of being closer, we can offset the 

price, higher price of our product by the lower freight rates that it 

will be costing. We have already proven we can supply the rice to 

them. It is a preferred product there. 

On the European issue, I think just trying to convince the European market that to base their judgments on sound science, that 

this is not a harmful trait to the rice, maybe would help some. And 

the issues with the tariffs that they are imposing on brown rice 

now is just—we don’t feel like that is fair. It is not compliant under 

the WTO requirements. And we think that this committee could 

urge the administration to try to get those tariffs removed. They 

should be closer to zero. 

Chairman LINCOLN. Right. There is no doubt that the Cubans 

enjoyed rice from the Southern States in the 1950s to a great degree, and that is certainly evidence to me there is great opportunity to increase that. And certainly with the growing popularity 

of brown rice, I think you are exactly right. Making sure that those 

markets are open to us and our products are critical. So thank you 

very much. 

My time has expired and I will turn to the Ranking Member, 

Senator Chambliss. 

Senator CHAMBLISS. Thanks, Madam Chairman, and gentlemen, 

thanks for your testimony. 

This is to each of you. The administration’s Interagency Trade 

Promotion Coordinating Committee recently solicited industry comments regarding the National Export Initiative. Did your national 

associations or companies provide comments, and if so, can you 

summarize what those comments were? Mr. Murphy? 

Mr. MURPHY. I think we did, and we would have wholeheartedly 

supported that initiative. As I stated in my testimony, soybeans are 

critically dependent on exports. Over 50 percent of the crop is exported and the soybean farmer’s income depends on exports. Thank 

you. 

Senator CHAMBLISS. Mr. Mencer? 

Mr. MENCER. Yes, sir. The Rice Federation did support this doubling of exports and our main focus was this could be achieved for 

44 

rice by opening the Cuban market and Free Trade Agreements and 

the help with the European Union issue we have. 

Senator CHAMBLISS. Okay. Mr. Rhodes? 

Mr. RHODES. Yes, sir. I believe that our trade focused on the 

FTAs and the MAP support as far as funding and staffing. 

Senator CHAMBLISS. Okay. Mr. Roggie? 

Mr. ROGGIE. Yes. We had comments that were submitted. We 

have attached them to our written record and those were through 

the Ag Export Coalition. It is a coalition of over 100 agricultural 

companies that submitted that. And basically, it is similar to what 

these other gentlemen mentioned. It is fully funding MAP, FMD, 

and working through Free Trade Agreements are the major three. 

Senator CHAMBLISS. Mr. Rhodes, Tysons is one of the largest 

meat processors in the United States, and obviously exporting your 

products is critically important to you. You heard us discussing 

with Ambassador Kirk the situation regarding the South Korean 

FTA. How important is it to a company like Tyson Foods that we 

have the ability to export all age, all cuts of beef to a country like 

South Korea versus our limitation now on being able to export only 

beef under 30 months of age? 

Mr. RHODES. Well, it is important to our company, Senator. We 

actually believe that—you asked about Korea, but China would be 

the place that, if we had an opportunity to gain access with our 

beef, would be the place there. I think you are asking, is it kind 

of a process where you get one thing and then add another one. I 

think our industry would support that. 

Senator CHAMBLISS. Okay. Thanks very much, Madam Chairman. 

Chairman LINCOLN. Senator Cochran? 

Senator COCHRAN. Madam Chairman, I am pleased to have the 

opportunity to be here this morning and listen to the testimony we 

have heard. I think it has been very helpful, instructive about the 

policies at work and those that need to be modified, improved so 

that we can gain even more of the world’s share of the market from 

our agricultural products grown and marketed out of the United 

States. I think that is one of our important roles here in the Congress and this committee is going to be at the forefront, I think, 

of leading the way, making sure we achieve those goals. 

Chairman LINCOLN. Are you done? 

[Laughter.] 

Chairman LINCOLN. I am sorry—— 

[Laughter.] 

Chairman LINCOLN. Well, thanks to you, Senator Cochran and 

the other Senators that were here. I want to thank our panel. 

I just wanted to mention, too, to Mr. Rhodes that I know your 

testimony described several instances in which the government of 

China seemed to be imposing restrictions on U.S. meat and poultry 

exports. You have mentioned it both in the two things that you 

wanted to see happen as well as in the comments with Senator 

Chambliss, some of those restrictions that are inconsistent with 

WTO obligations, either through improper use of anti-dumping 

rules or through the SPS rules which ignore the OIE standards. 

We want to continue to work with you and certainly continue to 

work as the government contemplates WTO dispute settlement 

45 

cases against restrictions and see if there is not more that we can 

do about that. I don’t know if you have got any further comments 

about that, but you have kind of been pretty clear. 

Mr. RHODES. Well, the one thing I would like to say in reference 

to China, in fairness there, that if China—one of the things that 

I think would help us with just about all our trade issues with 

China, at least from a poultry area, would be the ability for China 

to export out of approved facilities fully-cooked poultry to the 

United States. I think that is a point that would allow them to 

maybe be more reasonable on our exports. 

Chairman LINCOLN. And we have certainly been working with 

the House and others on that issue and we will—— 

Mr. RHODES. We appreciate that, Senator. 

Chairman LINCOLN. You bet, and continue to do so. 

Thanks to all of you all. I would also like to publicly apologize 

to Senator Thune. I wasn’t paying attention and Senator Roberts 

had already voted. I should have called on Senator Thune to go, 

but I wasn’t paying attention to everybody that was moving 

around. It may have saved us a little time. 

But thanks to our panel here today. We appreciate that. We appreciate all the members for being here and we look forward to continuing to work with you all as we open up markets, understanding 

how important it is to create jobs in this country. That is going to 

be a critical part of putting our economy back on track, and we 

know that you all provide the great industries that can help us do 

that. We want to continue to work with you and to continue to 

move in that vein. 

So thank you for joining us. We appreciate it. We look forward 

to continuing that work. 

The committee stands adjourned. 

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