U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

79–852—PDF 2012

S. HRG. 112–742 

THE ASIA PACIFIC: TRADE OPPORTUNITIES 

FOR AGRICULTURE AND FOOD PRODUCERS 

FROM THE GREAT PLAINS TO 

THE PACIFIC NORTHWEST 

HEARING 

BEFORE THE

SUBCOMMITTEE ON INTERNATIONAL TRADE, 

CUSTOMS, AND GLOBAL COMPETITIVENESS 

OF THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

APRIL 18, 2012 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

TOM COBURN, Oklahoma 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

RUSSELL SULLIVAN, Staff Director 

CHRIS CAMPBELL, Republican Staff Director 

SUBCOMMITTEE ON INTERNATIONAL TRADE, CUSTOMS, AND GLOBAL COMPETITIVENESS

RON WYDEN, Oregon, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

JOHN THUNE, South Dakota 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

(II) 

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Subcommittee 

on International Trade, Customs, and Global Competitiveness, Committee 

on Finance ............................................................................................................ 1 

Thune, Hon. John, a U.S. Senator from South Dakota ........................................ 3 

ADMINISTRATION WITNESSES 

Hormats, Hon. Robert, Under Secretary for Economic Growth, Energy, and 

the Environment, Department of State, Washington, DC ................................ 6 

Siddiqui, Ambassador Isi, Chief Agriculture Negotiator, Office of the U.S. 

Trade Representative, Washington, DC ............................................................. 10 

Vetter, Darci, Deputy Under Secretary, Farm and Foreign Agricultural Services, Department of Agriculture, Washington, DC ............................................ 13 

PUBLIC WITNESSES 

Powers, Mark, vice president, Northwest Horticultural Council, Yakima, WA . 25 

Casper, Paul, president, South Dakota Soybean Association, Sioux Falls, SD .. 26 

Crider, Steve, international sales manager, Amy’s Kitchen, Medford, OR ......... 28 

Thomson, Steve, executive vice president, King Estate Winery, Eugene, OR .... 30 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Casper, Paul: 

Testimony .......................................................................................................... 26 

Prepared statement .......................................................................................... 41 

Crider, Steve: 

Testimony .......................................................................................................... 28 

Prepared statement .......................................................................................... 44 

Hormats, Hon. Robert: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 48 

Powers, Mark: 

Testimony .......................................................................................................... 25 

Prepared statement .......................................................................................... 54 

Siddiqui, Ambassador Isi: 

Testimony .......................................................................................................... 10 

Prepared statement .......................................................................................... 61 

Thomson, Steve: 

Testimony .......................................................................................................... 30 

Prepared statement .......................................................................................... 65 

Thune, Hon. John: 

Opening statement ........................................................................................... 3 

Prepared statement .......................................................................................... 70 

Vetter, Darci: 

Testimony .......................................................................................................... 13 

Prepared statement .......................................................................................... 72 

Wyden, Hon. Ron: 

Opening statement ........................................................................................... 1 

COMMUNICATION

American Farm Bureau Federation ....................................................................... 83 

(1) 

THE ASIA PACIFIC: TRADE OPPORTUNITIES 

FOR AGRICULTURE AND FOOD PRODUCERS 

FROM THE GREAT PLAINS TO 

THE PACIFIC NORTHWEST 

WEDNESDAY, APRIL 18, 2012

U.S. SENATE,

SUBCOMMITTEE ON INTERNATIONAL TRADE,

CUSTOMS, AND GLOBAL COMPETITIVENESS, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 2:05 p.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Ron Wyden 

(chairman of the subcommittee) presiding. 

Present: Senators Cantwell and Thune. 

Also present: Democratic Staff: Jayme White, Staff Director. Republican Staff: Paul Poteet, Senior Tax Policy Advisor. 

OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR 

FROM OREGON, CHAIRMAN, SUBCOMMITTEE ON INTERNATIONAL TRADE, CUSTOMS, AND GLOBAL COMPETITIVENESS, COMMITTEE ON FINANCE 

Senator WYDEN. Good afternoon. This Subcommittee on International Trade, Customs, and Global Competitiveness will come to 

order. 

I want to say to all our guests, we are going to have a bit of a 

challenge this afternoon because the Senate Budget Committee, on 

which both Senator Thune and I serve, has begun to meet on the 

important budget questions, so we are going to be running a little 

bit of a shuttle this afternoon, trying to make sure we can be in 

two places at once. I just want to tell our guests right at the outset 

that we appreciate their patience, and of course being here. 

Expanded international trade is a huge opportunity for American 

farmers and producers who can literally feed the Asia Pacific’s 

growing appetite for high-value food products. To fully tap this 

growing demand, American producers are going to rely on the Federal Government to establish a level economic playing field in the 

Asia Pacific region. 

Under the leadership of Chairman Baucus and Ranking Member 

Hatch, this subcommittee’s mission is to identify, to understand, 

and to influence the changes under way in our economy. We do all 

this so the American trade agenda reflects our current economic interests. 

2 

Our goal is to ensure that American workers and businesses can 

successfully compete in the global marketplace. We need only to 

look at the economies of the Asia Pacific region to immediately witness rapidly changing economies and the opportunities they hold 

for increased U.S. exports and job creation. 

In emerging markets like Russia and China, incomes are rapidly 

rising, and the middle class is expanding. I intend for American 

producers of agriculture to have the opportunity to tap that growing demand that an expanding middle class will have for highvalue agriculture and food products. The number of middle-class 

households in China is expected to almost triple to nearly 350 million people by the next decade. 

The importance of China as an export market for agriculture is 

going to continue to grow. That is why our trade relationship with 

China continues to confound so many Americans. On one hand, 

China routinely violates its trade obligations. On the other hand, 

China represents one of our most important export markets for agriculture and food. 

The opportunities are similar in Vietnam, Thailand, and Indonesia, where the number of middle-class households is expected to 

double by 2020. In the Pacific Northwest, our farms, our factories, 

and our kitchens can produce more than can be consumed locally. 

So the growth of the Asian Pacific economy represents a way to 

create, and more importantly sustain, good-paying jobs that rely on 

export sales. These are good-paying jobs associated with growing 

things, adding value to what we grow, and then shipping finished 

products to Asian consumers. 

When it comes to agriculture and food, our domestic supply chain 

is fully integrated, which means that boosted agriculture and food 

exports hold the potential to create thousands of new jobs. But we 

do face significant tariff and non-tariff barriers to American agriculture and food producers in the Asia Pacific area. These are barriers that undermine our exports and limit job creation. 

According to testimony provided by today’s private sector panel, 

American wine faces a 14-percent tariff into China. Some of our 

competitors are not hit with such an onerous tariff. Pacific Northwest pears, apples, and cherries are burdened by tariffs that range 

from 10 to 50 percent in the Asia Pacific region. Some prepared organic foods are challenged by tariff rates of up to 30 percent. It is 

going to require some deft work by American diplomats and trade 

negotiators to see that these trade barriers are promptly dismantled. 

But simply dismantling traditional tariff or protectionist health 

and safety barriers is not enough to enable American agriculture 

and food producers to tap growing demand in the region. When Pacific Rim economies share a natural resource like the Pacific Ocean, 

there must be a set of disciplines in place to ensure that the resource is protected from things such as over-fishing. Enforcement 

of laws to combat illegal logging among Asia Pacific countries is 

going to be important if American wood products are to be provided 

a fair chance to compete. 

Sellers and buyers of agriculture and food products must be free 

to travel among Asia Pacific economies to meet each other and to 

conduct business. To facilitate online direct sales to consumers with 

3 

a taste for high-value wine, for example, the Internet must be 

open. For perishable exports to be competitive, Customs procedures 

must be efficient, they must be transparent, they must be nondiscriminatory. 

The Asia Pacific Economic Counsel, what is known as APEC, 

serves as a valuable forum to discuss and debate these issues, and 

also provide an immediate opportunity to establish binding rules to 

address these and other issues that exist within the Trans-Pacific 

Partnership discussions. 

The subcommittee looks forward to hearing from our witnesses 

today about their views about the TPP. Beyond the Trans-Pacific 

Partnership, for the U.S. to fully realize the economic opportunities 

in the Asia Pacific, shippers must be provided the freedom to navigate through secure sea lanes. 

China’s growing naval fleet is viewed by some as a potential 

threat to vital shipping concerns. Senate ratification of the Law of 

the Sea treaty would give the United States international legitimacy in its efforts to keep the sea lanes of the South China Sea 

open. 

Russia’s pending membership to the World Trade Organization 

also provides opportunities in the Pacific. It is going to provide 

challenges as well, complicating our producers’ efforts to expand exports in the Asia Pacific, due to the vast contrasts in the region. 

There are emerging markets to be sure, but there are also countries that are still less developed, while there are advanced economies almost side by side. 

Each of these situations presents a unique challenge to our exporters. For American producers to navigate these markets, they 

need the help of foreign embassies and resources and talent found 

at our Departments of Agriculture, State, and Commerce. 

There are enormous opportunities that can be seized by the economic growth that is expected in the Asia Pacific region, and there 

are substantial challenges that will take American leadership to 

tackle. This subcommittee is going to play a role in some of these 

key issues. We offer to fully support our farmers and our producers, and we intend to work closely with the Obama administration. 

Today’s hearing will focus primarily on the efforts we can expect 

from the administration about the trade-specific barriers in the 

Asia Pacific and the means by which the administration seeks to 

dismantle them. We have two excellent panels of witnesses. We 

look forward to their testimony. 

Somehow my long-time friend and the ranking member Senator 

Thune has managed to be in two places at once, because I already 

announced that you were, like myself, going to be in the Budget 

Committee off and on this afternoon. I thank my colleague and just 

welcome any comments that you would like to make, Senator 

Thune. 

OPENING STATEMENT OF HON. JOHN THUNE, 

A U.S. SENATOR FROM SOUTH DAKOTA 

Senator THUNE. Thank you, Mr. Chairman. I want to start by 

thanking you for holding this hearing and all the witnesses we 

have here today for taking the time to testify. Our hearing today 

4 

is an opportunity to highlight the American success story, that is, 

our Nation’s growing agricultural exports and the jobs that they 

support here at home. The nations of the Asia Pacific region are 

vital to this success story and will become even more important in 

the coming years. 

I want to consider just a few statistics. Last year, American agri- cultural exports reached a record level of nearly $138 billion, with 

demand in Asia a key component of this success. China is today the 

largest export market for U.S. agriculture, with agricultural exports to China totaling nearly $20 billion and supporting 160,000 

American jobs. Our agricultural exports to China have grown more 

than 10-fold over the past decade, increasing from $1.9 billion in 

2001 to $19.9 billion in 2011. In 2010, the U.S. enjoyed a trade surplus in agriculture with China of over $14 billion. 

However, the success story for U.S. agriculture in Asia is not just 

about China. America’s exports of agricultural products to South 

Korea more than doubled in the past 10 years, reaching sales of 

$6.7 billion in 2011. The nations of Southeast Asia, such as Malaysia, Indonesia, and Vietnam have more than tripled their imports 

of U.S. agricultural products over the last 10 years. In 2011, these 

nations consumed $9.6 billion worth of American agricultural exports. 

In South Dakota, we understand the importance of opening new 

markets to our home-grown products. South Dakota’s agricultural 

exports were $2.4 billion in 2010, supporting roughly 20,000 jobs 

both on and off the farm. These export sales are a very meaningful 

part of South Dakota’s farm economy, which had total cash receipts 

of $7.7 billion in 2010. 

Later today we are going to hear from Paul Casper, president of 

the South Dakota Soybean Association. Soybeans and corn in particular have been drivers of South Dakota’s export economy, and 

Asian nations such as China have been at the forefront of this 

growth. In 2011, over $12 billion of highquality U.S. soybeans were shipped to China. This represented 

roughly 50 percent of U.S. soybean exports and 25 percent of the 

entire U.S. soybean harvest. Driven in large part by Chinese demands, South Dakota’s exports of soybeans have grown rapidly 

from $340 million in 2006 to over $1 billion in 2010. 

While China was the largest purchaser of U.S. soybeans, another 

Asian economy, Japan, was the third-largest purchaser, with imports of $1.2 billion last year. Japan remains the world’s singlelargest importer of feed grains and the number-one importer of 

U.S. corn. 

Yet while U.S. agricultural trade with Asia has been a success 

story, we know that challenges remain. Our beef exporters, for example, still face unjustified sanitary and phytosanitary (SPS) barriers in nations such as China, Taiwan, and Japan. 

While China is the top export market for U.S. soybeans, their 

regulatory approval process for commodities containing biotechnology traits has been slow and cumbersome, leaving room for 

substantial improvements. Additionally, America’s poultry exports 

to China continue to be stymied by high tariffs imposed in 2010. 

Given the growing middle class in Asian nations such as China, 

Thailand, and Vietnam, a successful conclusion to the Trans-Pacific 

5 

Partnership agreement is incredibly important to the future of 

America’s agricultural exports. 

Yet I find it troubling that the administration has not yet requested an extension of Trade Promotion Authority, which expired 

in 2007. Trade Promotion Authority is essential to not only bring 

the TPP negotiation to a successful conclusion, but also to initiate 

new free trade negotiations. 

While I commend the administration for its work on the TPP 

agreement, it is disappointing that, more than 3 years into the 

Obama administration, TPP is the only new trade agreement being 

pursued by the administration. It is unfortunate that this President has not yet seen fit to ask for the trade authority granted to 

Presidents of both parties since 1974. 

Clearly, America cannot continue to lead the world in highquality agricultural exports unless we continue to open new markets in Asia, a region that includes more of the world’s fastgrowing economies and that accounts for more than 40 percent of 

global trade. 

I look forward to continuing to work with the administration on 

a successful conclusion to the Trans-Pacific Partnership, and I am 

hopeful that this administration will become more aggressive when 

it comes to opening up new markets to American exports, not just 

in Asia but around the globe. 

I look forward to working with you, Mr. Chairman, and the members of this committee as we pursue additional market opportunities for American exporters and what that can do in terms of creating jobs here in the United States. So, thank you again for holding the hearing. Again, I want to thank our witnesses for being 

here today, and I look forward to hearing your testimonies. 

Senator WYDEN. Thank you, Senator Thune. I think you make an 

important point about the need to always be on the offense in 

terms of trade and finding new opportunities. I think we both very 

much enjoyed the fact, I think because both the chairman, Senator 

Hatch, and others were tied up in some of the Super Committee 

negotiations, that you and I ended up spending a fair amount of 

time managing the floor when it came to those three trade agreements. They are going to make a big, big difference. 

[The prepared statement of Senator Thune appears in the appendix.] 

Senator THUNE. They are. 

Senator WYDEN. It is a pleasure to work with you on those and 

the trade agenda. 

Senator THUNE. Same here. 

Senator WYDEN. We have three very valuable witnesses here this 

afternoon. We are going to start by hearing from the Honorable 

Robert Hormats, who is Under Secretary for Economic Growth, Energy, and the Environment at the U.S. Department of State. He is 

going to give us a broad view about the importance of U.S. engagement in the Asia Pacific region. Bob Hormats is Secretary Clinton’s 

go-to person on global economics, and I can say for the record he 

is somebody that I go to often for his counsel and ideas with respect to global economics as well, and we are glad to have you here 

today, Mr. Hormats. 

6 

Then we are going to hear from Ambassador Siddiqui. He is the 

Chief Agriculture Negotiator for the Office of the U.S. Trade Representative. It is good to have you again, Mr. Ambassador, as you 

can anticipate folks at home in Oregon continue to ask questions 

about organics. We went through a number of those issues at your 

confirmation, and we know you are following up and look forward 

to hearing your testimony this afternoon. 

Finally, we are going to have Ms. Darci Vetter. Ms. Vetter is 

Deputy Under Secretary for Farm and Foreign Agricultural Services at the U.S. Department of Agriculture. Prior to her service at 

the Department of Agriculture, we simply want to take note of the 

fact that she is an alum and has roots here in the Senate Finance 

Committee, doing very good work for Chairman Baucus on trade 

and agricultural kinds of questions. Ms. Vetter, we are glad to have 

you here today. 

So we will make the remarks of all three of you a part of the 

hearing record. Why don’t you just take as much time as you would 

like to outline your priorities, then I know we will have some questions. So, let us begin with you, Secretary Hormats. 

STATEMENT OF HON. ROBERT HORMATS, UNDER SECRETARY 

FOR ECONOMIC GROWTH, ENERGY, AND THE ENVIRONMENT, DEPARTMENT OF STATE, WASHINGTON, DC 

Secretary HORMATS. Thank you very much, Mr. Chairman and 

Ranking Member Thune. It is a real pleasure to be here today. It 

is also a pleasure to be here with my colleagues from two of the 

agencies that are very actively involved in this. Isi Siddiqui is a 

very good friend, as is Darci Vetter, and both of them have done 

a lot of very good work on all the issues we have mentioned. 

I will try to confine myself to some of the issues the State Department is most directly involved in, and I know that both Darci 

and Isi will be providing some more details in some of these areas 

as well. 

I am also very pleased to be on a panel that precedes the impressive private sector panel that you have here, because the private 

sector is really the key to the generation of exports and job creation 

which are so important in the agricultural sector and other sectors 

of our economy. So, bringing them in and giving them an important 

opportunity to express their views is highly important. 

One of the things that makes the State Department’s contribution to our goals of advancing agricultural exports particularly 

unique is our team of ambassadors and nearly 1,000 economic officers located in almost every country in the world. Through this 

presence, we work directly with host government officials to improve our bilateral and economic relations. 

This is particularly important for the U.S. agricultural sector in 

the Asia Pacific region, where there is an enormous amount of economic growth and where there is a new generation of consumers 

coming of age which is dramatically increasing in size and in 

spending power and is ratcheting up the kind of goods they purchase. 

We were talking just before in the anteroom about increasing 

sales of American organic products in East Asia. This is just a sign 

that these countries are looking for high-quality goods, and goods 

7 

and products produced in the Northwest are certainly very important in the improving of diets, both in terms of the quality and the 

nutrition of the foods, and the variety of the foods they want. 

So it is a very important area for expansion of opportunity, and 

our embassies are very aware of that. I was just in Vietnam and 

Thailand and talked about a number of these issues with their embassy people, who are very strongly committed to boosting exports, 

and they are quite aware that agricultural exports are a key part 

of that, for two reasons. 

One is, because they produce a lot of jobs and employment directly. And also, the indirect benefits are quite substantial in the 

areas that service agricultural exports: shipping and all the processing that goes on as well. So they see this and understand that 

this is an opportunity. Secretary Clinton and I constantly remind 

them of this priority, although they are very much aware of it 

themselves. 

I will focus in particular on APEC and some of the things that 

we are doing in other areas that relate to agriculture. With respect 

to APEC, which the State Department is playing the leadership 

role in putting together—we were the hosts last time in Honolulu; 

the next time the Russians will be hosting it in the Russian Far 

East—seven of America’s top 15 trading partners are APEC members, and several APEC members have key emerging agricultural 

markets: Indonesia, Malaysia, Vietnam, and a number of others. 

China is one you mentioned, and I will spend a particular amount 

of time on that since it does present unique and substantial problems, as you have indicated, Mr. Chairman. 

The State Department led a government effort during APEC 

2011. We sought to strengthen global economic integration by advancing common trade and investment practices in the region. We 

have had some success, although we still have challenges. 

For example, after the high-level engagement with State Department officials last year, the Indonesian government—Indonesia is 

a very important economy in the region, large, growing, and prospering—established a science-based regulatory system and embraced the potential of agricultural biotechnology, which is progress 

considering that there are a number of countries that are not very 

far along in advancing biotechnology. 

There are currently multiple crops undergoing field trials in Indonesia, with the first expected commercialization being later this 

year. Also, we are working with other government agencies to help 

Vietnam establish a biotech regulatory framework by building the 

capacity of Vietnamese officials to administer a science-based, 

rules-based system. 

As I say, I was in Hanoi discussing this issue. It is a very important one for our agricultural exporters, that they use science as a 

basis for their decisions as opposed to responding to political pressures or charges that bear no scientific evidence at all, which is all 

too common in the area of biotech and agriculture. 

Just last week, the State Department, in cooperation with the 

USDA and EPA, hosted a group of Vietnamese scientists who were 

preparing to issue the first environmental risk assessment for genetically engineered crops in their country’s history. We hope to see 

the first Vietnamese crops approved for commercialization in 2012– 

8 

2013. The goal will be to facilitate market access for U.S. agricultural products, and that can help our exporters, and it improves 

the diet of the Vietnamese. 

One of the things that you mentioned, Mr. Chairman—and I am 

really glad to see that you placed such emphasis on it—is the question of Russia. Russia hosts APEC this year and is expected to become a member of the WTO this summer. This could provide an 

enormous opportunity for American agricultural products. 

But, as you have indicated, to seize on that opportunity, American farmers need the help of Congress, specifically to enact the 

necessary legislation to terminate the application of Jackson-Vanik 

with respect to Russia. If not, U.S. exporters will not get the full 

benefits of Russia’s WTO membership, but our competitors will. 

Unlike other WTO members, the United States will not be able to 

turn to the WTO dispute settlement procedures to ensure compliance with trade rules. 

One particular example is very relevant to this hearing. When 

Russia becomes a WTO member, it will be required to comply with 

the WTO’s agreement on the application of sanitary and phytosanitary measures, including obligations relating to the use of 

science-based international standards. 

However, Russia would only be required to apply these rules to 

U.S. exports of, say, meat, or poultry, or dairy, or other agricultural 

products if Congress terminates the application of Jackson-Vanik 

to Russia. We should be very clear about this: Russia will join the 

WTO, but action is required from Congress to ensure that American agriculture fully reaps the benefits of this. Therefore, it is very 

important. 

I will leave the Korea-U.S. issues to my colleagues who have exercised enormous leadership in this area. I just would make two 

quick points. KORUS will directly benefit in many ways the Pacific 

Northwest’s food producers. Korean tariffs of 24 percent on U.S. 

fresh cherries will be eliminated, and also tariffs on frozen potatoes 

from Idaho will be eliminated as well. So, there are some real benefits in this region. 

We are working with our diplomats in the region, hand in hand 

with USTR and USDA, and the Commerce Department as well, to 

monitor firsthand Korea’s implementation of the agreement. A key 

point here that all of our diplomats are now being made aware of, 

if they were not already—and most of them knew it already—is 

that it is very important that what we negotiate, we aim to enforce. 

This is critical in keeping faith with the American people. Our 

goal is to maintain credibility with the American people and 

strengthen the integrity of the global trading system by ensuring 

that, when agreements are made, they are rigorously enforced. 

The TPP is an ongoing exercise. Isi and his colleagues have 

worked very actively on that, so I will not take any more time on 

that issue, except to say that it is extremely important from an economic point of view, from a trade point of view, from a foreign policy point of view, and can have enormous benefits for agriculture. 

Let me just turn to the State Department’s deployment of its resources to promote agricultural trade. One of the things we can do, 

and are doing, is to insist that our Ambassadors themselves insist 

9 

on addressing stalled high-profile issues and using a lot of tools to 

resolve them. 

Ambassadors host agricultural trade missions to highlight U.S. 

agricultural export opportunities and keep American farmers, keep 

American agri-business companies in touch with buyers in various 

parts of the world. We continue particularly to raise concerns about 

market access, noting that we expect countries to live up to their 

multilateral and their bilateral obligations. 

I will just cite one example. In Russia, Mike McFaul, who was 

just recently confirmed, who is a particularly energetic person— 

those of you who know him understand this—has already met with 

high-level officials several times to ensure that, when Russia fully 

accedes to the WTO, the Russian market will be open to American 

chicken exports. 

In China, one of the problems is that the absence of transparent 

science-based regulations has the potential to disrupt or limit the 

flow of U.S. agricultural exports. For example, differential approval 

rates, known as asynchronous approvals, the low-level presence of 

biotech products approved in the country of export but not yet in 

the country of import, and the lack of constant harmonized rules 

can potentially result in billions of dollars of losses. 

The State Department works very closely with the Chinese authorities to address a number of agricultural issues. As you pointed 

out, Mr. Chairman, that presents a problem. We also work in a variety of forums to proactively encourage economic and regulatory 

systems that will address these issues. 

For example, in APEC’s high-level policy dialogue on agricultural 

biotechnology, the State Department promotes the adoption of 

transparent science-based regulations in Asia for the review of agricultural products produced through modern biotechnology, a 

major theme. 

We are addressing the asynchronous approval process in a very 

vigorous way with the Chinese, in conjunction with our colleagues 

from USTR and USDA. This is something that comes up. It will 

come up almost certainly at the SNED meetings which we are 

going to have in China within a couple of weeks. 

We also sponsor outreach programs in Asia and elsewhere to enable officials of other interested parties to be able to separate myth 

and misinformation from science and facts regarding agricultural 

biotechnology. We think this is a very important point. 

That brings me to my final point, and that is what we are doing 

in multilateral forums to create the global conditions favorable to 

agricultural trade. Again, we work with USDA and USTR and the 

WTO, and in various other forums. This is a particularly important 

thing. 

One of the things that I find particularly significant when I 

speak with people in this area and other parts of the world is the 

arbitrary application of non-science based government regulations. 

This is a very important item. 

There is certainly a role for regulation to protect consumers and 

support commerce, but in order to facilitate trade it is important 

that we harmonize standards as much as possible to ensure sound 

science-based regulations that will ensure that other countries recVerDate Nov 24 2008 20:54 Mar 22, 2013 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 R:\DOCS\79852.000 TIMD
10 

ognize our certifications and have open, transparent, rules-based 

tests when they make their regulatory decisions. 

Multilateral diplomacy is crucial to creating these international 

standards and reinforcing good practices. Using international bodies such as the Codex Alimentarius, the U.N. body responsible for 

setting food safety standards, the U.S. is able to work to establish 

worldwide standards based on the recommendations of expert panels. 

So, in the interest of time, let me just conclude here and just say 

again how important we think it is to take a very proactive view 

that, when agreements are made, they should be enforced, even if 

issues do not rise to the level where we are able to raise a challenge in the WTO, but simply are incompatible with international 

standards or international principles of fairness or international 

principles of science-based judgment. 

We go after these things and raise them because they are important to jobs here, they are important to exports here, and agriculture is critical, critical to farmers, critical to ranchers, critical to 

people who are engaged in producing a whole range of fruits and 

vegetables throughout the country. It is, therefore, necessary to 

create good, high-quality jobs. 

We can compete in all these areas if we have a fair and open opportunity to do that. The quality is good, the energy of our farmers 

and our ranchers and people who produce the kinds of goods we 

are talking about, the products we are talking about, is high. 

We need to be able to support them at all levels, and our Ambassadors and our embassies are strongly committed to doing that, as 

is everyone at the State Department who works on these. 

So, thank you very much. 

Senator WYDEN. Thank you, Secretary Hormats. That was a tour 

de force through the region, and we will have plenty of questions. 

I was glad you touched on the issue of enforcement. This is something Senator Thune and I have spent a lot of time on throughout 

this Congress, looking at issues like merchandise laundering that 

largely come about because of a lack of transparency and corruption. 

I am glad you made the point about Russia as well, because one 

of the other issues that we care a great deal about as it relates to 

Jackson-Vanik, human rights, and trade, is keeping the Internet 

open, because that is absolutely key for those activists and others 

who want to be in a position to communicate their concerns worldwide. So we thank you. We will have plenty of questions for you 

in just a moment or two. 

[The prepared statement of Secretary Hormats appears in the 

appendix.] 

Senator WYDEN. Ambassador Siddiqui, you have to try to pick up 

the ball after all that. You have a challenge, and you are up to it. 

STATEMENT OF AMBASSADOR ISI SIDDIQUI, CHIEF AGRICULTURE NEGOTIATOR, OFFICE OF THE U.S. TRADE REPRESENTATIVE, WASHINGTON, DC 

Ambassador SIDDIQUI. Thank you, Mr. Chairman and Ranking 

Member Thune. It is going to be a very hard act to follow Ambassador Hormats. 

11 

Mr. Chairman, I would like to request that my written testimony 

be submitted for the record. 

Senator WYDEN. It will be done. 

[The prepared statement of Ambassador Siddiqui appears in the 

appendix.] 

Ambassador SIDDIQUI. It is indeed my pleasure to be here this 

afternoon with Under Secretary of State Robert Hormats and my 

colleague Deputy Under Secretary Darci Vetter from USDA. 

I must emphasize the strong partnership we have established 

with, not only the USDA and the State Department, but also with 

other agencies like EPA, FDA, and Commerce, which are essential 

to deal with many of the trade barriers we face around the world. 

It is quite fitting that this hearing is focused on the opportunities 

for exporting agricultural and food products to the Asia Pacific region. 

As you know, the Asia Pacific region includes some of the world’s 

most dynamic economies. It is a key destination for agricultural 

products we produce in this country, with nearly 75 percent of 

these total products being exported to these rapidly growing economies in the Asia Pacific region. 

It is, therefore, imperative that USTR prioritize the Asia Pacific 

region, focusing on creating new market opportunities, as well as 

high-quality, high-paying jobs in the U.S. Consequently, we are 

moving full speed forward on the Trans-Pacific Partnership negotiations, or TPP, which are essential to the administration’s 2012 

trade agenda as we seek to conclude the landmark TPP negotiations this year. 

The TPP holds the prospect for unlocking significant new market 

access opportunities for U.S. exports that support high-level, highpaying jobs in the U.S. Negotiation of the TPP is an enormous undertaking, as many of us are finding out, not only for the combined 

size of the economies which are participating among those nine 

countries, but also the scope and ambition of this agreement itself. 

For example, in the case of TPP negotiations on sanitary and 

phytosanitary issues, there is going to be a separate chapter. The 

part I want to emphasize, since Ambassador Hormats also mentioned this, is the difficulties we encounter in many of these countries are related to barriers related to sanitary and phytosanitary 

issues. So there is going to be a separate chapter in the TPP agreement which will be where we are seeking new commitments which 

will improve transparency around the development of SPS regulations and strengthen science and risk analysis requirements to support any SPS measures. 

The Obama administration’s goal is to conclude this agreement 

that positions U.S. farmers, ranchers, and businesses to compete 

successfully in the Asia Pacific region. Already, other countries in 

the region have publicly expressed interest in participating in this 

high-standard agreement, so much so that the TPP has the potential of becoming a primary platform for regional economic integration in the Asia Pacific region. 

In addition to negotiating new agreements, USTR is devoting significant time and resources on the enforcement aspects of existing 

agreements. Trade enforcement has been a high priority for the 

Obama administration, and we will continue to aggressively chalVerDate Nov 24 2008 20:54 Mar 22, 2013 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 R:\DOCS\79852.000 TIMD
12 

lenge the kinds of unfair trade practices and barriers we face every 

day around the world. 

I am also proud to say that our negotiating efforts in 2011 resulted in successful expansion of market access for our agricultural 

products in Korea, China, Japan, and Taiwan. This includes, for 

example, opening the Korean market for blueberries from Oregon 

starting this growing season. 

Another priority of the Asia Pacific region continues to be—and 

Senator Thune mentioned it—market access for beef and beef products in the Asia Pacific region which is based on science consistent 

with international and commercially viable standards. We are encouraged by Japan’s recent steps they have taken to take these 

issues of beef market access and risk assessment to their Food 

Safety Commission to reevaluate their import measures for U.S. 

beef. We are also working to open market access for beef and beef 

products in China as well. 

Last month, USTR Acting Under Secretary Michael Scuse, Deputy Under Secretary Darci Vetter, and I led a team to Beijing to 

engage with our Chinese counterparts on beef market access. As a 

result of these discussions, both sides have agreed to resume technical discussions on product scope and other issues related to market access for beef. 

Finally, Mr. Chairman, another issue critical to the continued 

growth of U.S. agricultural exports involves Russia’s accession to 

WTO. Ambassador Hormats mentioned that, and I fully concur 

with him that, to fully reap the benefits of Russia’s accession, Congress will need to terminate the application of the Jackson-Vanik 

amendment and grant Russia permanent normal trade relations 

status. 

We look forward to working with you, Mr. Chairman and members of the committee, as well as your colleagues in Congress, to 

end the application of Jackson-Vanik to Russia in order to ensure 

that American exporters will enjoy the same benefits of Russia’s 

WTO membership as our international competitors will. 

Mr. Chairman, since you mentioned in your opening remarks the 

work which we are doing on organics—although it was not in my 

prepared remarks, so I will deviate from that—I can assure you 

that the administration has given a high priority to this issue of 

increasing market access for organic products across international 

borders. 

One of the things which we have done in the past 3 years is the 

first organic equivalency arrangement, which was signed about 2 

years ago with Canada. Just about 2 months ago, in February, 

Deputy Secretary of Agriculture Kathleen Merrigan and I, on behalf of the U.S., signed a landmark arrangement on organic equivalency with the European Union. 

So what that will do is, it will allow for, starting June 1 this 

year, any organic product which is certified to be grown organically 

and meets USDA’s standard for ‘‘organic,’’ automatically will be 

qualified to be shipped and sold into the European Union, and the 

converse will also be true: any European ‘‘organic’’-labeled product 

will be able to be sold in the U.S. 

This represents, between the U.S. and the E.U., a 50-percent 

global market on organic trade. This is a very significant developVerDate Nov 24 2008 20:54 Mar 22, 2013 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 R:\DOCS\79852.000 TIMD
13 

ment, and I want to assure you we will continue to look into other 

options in the Asia Pacific region to do the same thing as what we 

have done with the organic equivalency arrangements with these 

two countries, Canada and the European Union. 

In closing, I would like to emphasize the USDR’s strong commitment to ensuring that the United States plays a leading role in the 

economic integration of the Asia Pacific region. Our focus at USTR 

remains on enforcing existing trade agreements, negotiating new 

agreements, and leveling the playing field for our farmers, ranchers, and businesses, thus ensuring greater prosperity for American 

agriculture and the entire American economy. 

Thank you, Mr. Chairman. 

Senator WYDEN. Ambassador, thank you. Very helpful testimony 

on a number of key points. You just feel comfortable about deviating from your testimony whenever you come up with something 

like equivalency for the organic agricultural sector, because I share 

your view. I think that is a real opportunity for those markets, and 

I appreciate those comments. 

Ms. Vetter, welcome. We will make your prepared remarks a 

part of the record. Just proceed as you would like. 

STATEMENT OF DARCI VETTER, DEPUTY UNDER SECRETARY, 

FARM AND FOREIGN AGRICULTURAL SERVICES, DEPARTMENT OF AGRICULTURE, WASHINGTON, DC 

Ms. VETTER. Thank you very much. Mr. Chairman and Ranking 

Member Thune, again, thank you for the opportunity to testify 

today. 

Right now there are many USDA Foreign Service Officers at 

posts around the world who are working with their State Department colleagues on behalf of U.S. agriculture. There is not a working hour that the Foreign Agricultural Service and USTR are not 

tackling an agricultural issue together. 

Among the most rewarding work we do is combining forces with 

our government colleagues and the private sector to open and 

maintain foreign markets for U.S. farmers, ranchers, and producers. So it is my pleasure to be here today to discuss successes 

and opportunities in Asia Pacific markets. I will try to be brief, as 

my distinguished colleagues have covered a lot of ground here, and 

I will try not to repeat their examples. 

But this month, visitors to the Beijie Tourism Festival in China’s 

Guizhou Province will notice something all-American: it will be 

hard to miss. The new 3,300-square meter tourism festival center 

is China’s first dome structure built of an all-American timber 

product. 

The dome’s laminated wooden beams were manufactured by Calvert Company of Vancouver, WA, and fabricated by Western Wood 

Structures of Tualatin, OR. How this project came to be is an example of how the Foreign Agricultural Service partners with the 

private sector to capitalize on foreign market opportunities. 

Five years ago, our FAS officers analyzed market opportunities 

for wood products in China, and in 2008 FAS coordinated with the 

APA–Engineered Wood Association headquartered in Tacoma, WA 

on a seminar funded by USDA’s Market Access Program (MAP) 

and supported by local FAS personnel. U.S. companies were introVerDate Nov 24 2008 20:54 Mar 22, 2013 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 R:\DOCS\79852.000 TIMD
14 

duced to Chinese officials at the seminar, who then contracted to 

build the dome. The value of materials for the dome is over 

$800,000, a win for these U.S. exporters and all of their employees. 

Last year, U.S. agricultural exports to China supported nearly 

160,000 American jobs. Dried cranberries from Oregon, soybeans 

from South Dakota, salmon from the Pacific Northwest, and grains 

from the Great Plains are just a handful of the U.S. agricultural 

products we ship to China. 

USDA opened its first office in Beijing in 1976. Now with seven 

offices in five cities, FAS is well-positioned to advance U.S. agricultural interests throughout China. 

Last month, as Ambassador Siddiqui noted, he and I joined 

USDA’s Acting Under Secretary Michael Scuse on a trade mission 

to China, accompanied by 40 American businesses and 6 State Departments of Agriculture. In Chengdu and Shanghai, we met with 

dozens of Chinese buyers and distributors. On-the-spot sales for 

that trip totaled more than $800,000, and numerous companies remain in contract negotiations with interested Chinese buyers. 

And as you noted, Mr. Chairman, in your opening remarks, a key 

factor that is fueling our opportunities for agricultural exports is 

the growing middle class in a number of Asia Pacific developing 

countries. Middle-class households in Vietnam and Indonesia are 

projected to more than double by 2020, and in China those households are expected to almost triple to nearly 350 million in the 

same period. This increased purchasing power is driving greater 

demand for high-quality U.S. fruits, vegetables, proteins, and 

value-added consumer foods. 

My colleagues also highlighted the importance of trade agreements, including the current TPP negotiations and the implementation of the U.S.-Korea trade agreement. In each of these cases, 

FAS experts are members of the USTR-led negotiating and implementation teams. Once implemented, FAS helps exporters take advantage of the market access that these agreements provide. 

If you look, for example, at the website of our Agricultural Trade 

Office in Seoul, it lays out clearly the steps that any U.S. exporter 

can take to sell their products now that the KORUS has entered 

into force as of March 15. Likewise, USDA negotiated with Russia 

on WTO accession and stands ready to assist Congress in granting 

permanent normal trade relations to Russia. 

USDA dedicates significant effort to monitoring compliance with 

our trade agreements and removing trade barriers. In the past 

year, USDA personnel have been instrumental in resolving numerous bilateral sanitary, phytosanitary, and technical barriers to 

trade. We have helped open the Japanese market to U.S. chipping 

potatoes, the Korean market to fresh Oregon blueberries—along 

with our colleagues at USTR—and the Chinese market to live 

swine. 

In addition to bilateral work, we work diligently in international 

standard-setting bodies like the Codex, where I had the opportunity to lead the U.S. delegation to the Codex Commission last 

July, where we promoted international recognition of science-based 

standards for key products, including certain veterinary drugs. 

Agricultural exports contribute to the prosperity of communities 

across America. Every $1 billion of agricultural exports stimulates 

15 

over $1.3 billion in additional business activity and supports 7,800 

American jobs. The fiscal year 2012 forecast for U.S. agricultural 

exports is $131 billion, the second-highest on record. 

For U.S. agriculture to continue to thrive, we must open, expand, 

and maintain access to markets across the Asia Pacific and 

throughout the globe, where 95 percent of the world’s consumers 

live. 

Thank you very much for the opportunity to be here. I look forward to your questions. 

[The prepared statement of Ms. Vetter appears in the appendix.] 

Senator WYDEN. Thank you. An excellent presentation. I was trying to follow how you would alternate products that came from the 

Pacific Northwest and South Dakota. I am sure there is something 

that is grown in other States, but the fact that you managed to 

highlight so many of those is very good. 

This was an excellent panel. Let me start, in terms of trying to 

unpack a little bit of the perception that folks feel in our part of 

the world and just kind of get your reaction to it. I think there is 

a sense, particularly in the Pacific Northwest, that the trade barriers that agricultural products face in particular are not treated 

with as high a priority as other kinds of concerns. I am sure you 

have heard that. 

You have outlined a number of areas, and I think you heard me 

take note of, particularly, some of the accomplishments which I 

think are significant. Yet, when you talk to people who grow stone 

fruits and fresh vegetables and value-added goods like wine and 

prepared meals, this is the question that they ask. 

So I think for the three of you, I want to put it in the context 

almost of what Senator Thune and I are going to be dealing with 

in the Budget Committee when we have to pop up, and that is priorities. I mean, at the end of the day, these are judgments about 

choices. 

So, when I go up to the Budget Committee in a few minutes, 

they are going to say, what are the couple of things that are important to you, and I am going to say, protecting the Medicare guarantee and bipartisan Medicare reform, and I am going to say, progrowth tax reform. Those are the two things that I want to accomplish in the Budget Committee. Both of them are bipartisan concerns. 

So let us go down the row and have each one of you say—starting with you, I think, Secretary Hormats—what would be the two 

things you would like to see accomplished in this area, in the question of the Asia Pacific region and agriculture? 

You gave a very good presentation, an excellent one. This is not 

to suggest for any of you that your points were not well-placed, because they were. I think just in terms of the choices and the fact 

that this will be a challenging remainder of the Congress, election 

year and the like, just quickly go down the row and give me your 

two priorities in this particular area. Let us start with you, Secretary Hormats. 

Secretary HORMATS. The two I would pick would be (1) how these 

countries conduct themselves with respect to the setting and implementation of regulations and standards. That would be one, because, in many cases what countries do when they do not have the 

16 

option of raising tariffs because they are limited by their WTO 

commitments, they use other methods within the border, methods 

of restricting access to their markets, and many of those are based 

on how they set standards. 

Do they set them in a more nationalistic and discriminatory way, 

and how do they establish regulations? Are they transparent, nontransparent, are they designed to help domestic firms as opposed 

to foreign firms? So going after that issue of standards and regulations is really critical because some of them are designed in effect 

to discriminate in favor, in many cases, of local production as opposed to foreign production and, quite frankly, keep foreign production out. China does use this to a far greater degree than they 

should or we would want, and this is a major topic as well. 

The second is protection of intellectual property. This is a huge 

issue, a huge issue. It affects everything. One of the problems is 

that the intellectual property that goes into producing modern agricultural products, into producing software, into producing movies, 

into producing you name it, is very important because, in some 

areas, we are not as competitive as we used to be. We are very 

competitive in high-end, innovative products, and those tend to incorporate and involve intellectual property, innovative capabilities. 

If we find that those are lost due to cyber-thievery, piracy, forced 

transfer, or other kinds of things, then we as a country are going 

to suffer a severe decline in our ability to compete in the areas 

where we should be, and are—on a level playing field—the most 

competitive. 

So we must address regulations and standards setting and make 

sure they are done in a fair, transparent, rules-based, science-based 

fashion. It affects sanitary and phytosanitary conditions, it affects 

a lot of things, and the intellectual property area is a broad area, 

but it affects every single industry and virtually every major job in 

the United States. 

We are suffering because most countries do not have either 

strong rules—in some cases they may have laws that look good, but 

they are poorly enforced, and in some cases there is simply a national effort to pirate intellectual property, whether it is inspired 

by the government or countenanced by the government or not corrected by stiff government policy. 

It is happening in virtually every American company you talk 

to—and you talk to a lot of them, and I know that Ranking Member Thune does as well—and they are very worried about losing the 

best technology, the best innovation to people who pirate it, and 

therefore they lose revenues, they lose jobs, and we as a country 

lose competitiveness. 

Senator WYDEN. Two important issues. As those who watch this 

subcommittee know, it does not take a whole lot to trigger a 

lengthy discussion on the intellectual property front. I think I will 

pass on that. We have had a pretty vigorous debate in this session 

on it, and fortunately it protected Internet freedom. The discussion 

will continue. You are absolutely right, those are important issues. 

Let us go to you, Ambassador Siddiqui—your two priorities. 

Ambassador SIDDIQUI. Mr. Chairman, in the TPP context, negotiating a comprehensive and ambitious agreement is still the 

number-one priority for us. After the APEC meeting last November 

17 

in Honolulu, the leaders of the nine countries which are participating in the TPP negotiations directed the staff to complete the 

negotiations in 2012. So we continue to be focused on completing 

these negotiations. So I think that architecturally a comprehensive 

and ambitious agreement is number one. 

I think the subset of that is, when tariffs go down in any trade 

agreement, then barriers—which are non-tariff barriers—become 

even more important. This is where our efforts in this 21st-century 

agreement we are negotiating among TPP countries, having a separate chapter on sanitary and phytosanitary, is really important for 

us, which is essentially making sure decisions—sometimes regulatory decisions—are transparent, are based on science, and also 

comply with international standards. 

We believe the stakeholders’ input, as well as consultations we 

have done with members of Congress—I think this seems to be one 

of the highest priorities. As your own remarks mentioned, the barriers we face on the sanitary and phytosanitary front, this is where 

we need to focus some of the longstanding—there is a perception 

that we are not working and prioritizing it high enough, but some 

of these problems by nature are such that these other countries 

also have issues where they want us to be working on those. 

So many times it becomes one of those things where we have to 

move these issues very much on parallel tracks so that we are 

making progress on issues which are of our concern, and at the 

same time issues other trading partners want us to work on. 

Again, they have to be based on sound science and international 

standards and risk assessment. 

Senator WYDEN. All right. 

Ms. Vetter, two priorities? 

Ms. VETTER. Sure. Well, following up on the comments of my colleagues, I think that we have a critical window in the next few 

months, both to expand beef access with Japan, China, and Korea, 

and also to reduce the threat of asynchronous approvals and the 

delays they cause in trade in products of biotechnology. I think that 

will require our focus, but that we have a real opportunity to make 

a difference in both of those areas in the next few months. 

I would just note one thing in the long term, that for USDA I 

think is a real priority for us over the next few months, and that 

is to take a step back from dealing with specific sanitary and 

phytosanitary issues and create an environment with a number of 

our trading partners where we work hand-in-hand with our regulators and our regulatory agencies to start a broader conversation 

on their approach to regulatory regimes and how they set their 

sanitary and phytosanitary standards. 

By doing this and by talking about how it is that we create policy, we can often prevent trade barriers before they come to light 

if our trading partners start by building their regulations based on 

science. This is one of the things we are doing with China. We are 

building on the Symposium on Agriculture we held when Vice 

President Xi visited. We are now building out a cooperative agenda 

on how to improve food safety, food security, and agricultural sustainability, and exactly these types of discussions will be on that 

agenda. 

Senator WYDEN. All right. 

18 

Senator Thune? 

Senator THUNE. Thank you, Mr. Chairman. 

I want to follow up, if I might, on—and I mentioned this in my 

opening remarks, and you touched on it, Ms. Vetter—the beef export issue. Our beef exports have been subject to unwarranted restrictions in some of these important Asian markets, notably China 

and Japan. It is an issue I care a great deal about in South Dakota. 

I know the chairman of the full committee, Senator Baucus, also 

cares a great deal about it. 

I am wondering if you might be able to comment a little bit more 

on the situation regarding access for U.S. beef in China, which does 

remain closed to our beef since the BSE incident back in 2003, as 

well as access for U.S. beef in Japan, which, as of right now, only 

allows beef in from cattle aged 20 months or younger. If you want 

to comment, Mr. Ambassador, as well, and whoever else wants to 

speak to that issue. But maybe go into a little bit more detail about 

where we are. 

Ambassador SIDDIQUI. Senator, on the Japan beef market issue, 

we right now have access for beef and beef products under 30 

months. Our goal has been to normalize trade on beef so that we 

can get that remaining part of the market share. Again, we have 

insisted that this be done on a basis where it is based on science 

and international standards and it is commercially viable. 

We are making some progress. We are pleased with the way 

Japan submitted those questions about age, raising the age from 

20 months to above, as well as on the specified risk material. This 

risk assessment is in progress right now. We are pleased with the 

action the Japanese government has taken. But I agree with you, 

this is a longstanding issue, and we would like to have it resolved 

sooner rather than later. We will continue to work on that with our 

Japanese counterparts. 

On the issue of China’s beef market access, it was closed to us, 

as you know, since 2003. Off and on over this period from 2003 

when they shut down the market until now in 2012, there have 

been several times where we have been engaged more intensively. 

The last engagement started in 2011. 

At that time, Under Secretary Jim Miller of USDA and I nearly 

camped out there in Beijing for 10 days, and we thought that we 

had some progress being made, and actually we did make progress. 

They had 22 conditions which they had laid down for providing 

market access for beef under 30 months, both bone-in and boneless. 

Our teams, which were comprised of interdisciplinary teams, had 

people from USDA’s APHIS and FSIS, as well as FDA and USTR. 

We were able to narrow down those conditions to eight conditions 

where we still disagree. So we are continuing to discuss that and 

hopefully we can resolve some of these issues which have to do 

with the product scope, which I mentioned in my remarks, as well 

as traceability and some other issues which are still unresolved. So 

we will continue to engage the Chinese on this issue, and hopefully 

we can make progress and find a path forward in the coming 

months. 

Senator THUNE. Last December, the National Pork Producers 

Council and 63 other food and agricultural groups sent a letter to 

Ambassador Kirk expressing support for Japan’s inclusion in the 

19 

current TPP negotiations. Japan is the United States’ fourthlargest agricultural export market overall, despite maintaining 

some import barriers in the food and agricultural sector, some of 

which we have addressed. 

But total agricultural exports to Japan in 2011 totaled over $14 

billion, so it is a particularly important market for the U.S. pork 

industry. In fact, in 2011, Japan was a top-value market for U.S. 

pork exports, and it was worth nearly, at that time, $2 billion. Can 

you address how the U.S. Government is assessing the benefits of 

having Japan in the TPP? 

Ambassador SIDDIQUI. Well, number one, Senator, we had published in the Federal Register comments of other stakeholders. I 

think we have gotten hundreds and hundreds of those comments, 

which by and large were from the agricultural community, which 

were very supportive of Japan joining TPP. 

Our position continues to be that, since this is a very highstandard agreement, as per agreement among those nine participating countries, we expect the newly entering countries to meet 

that high standard. That also means, by virtue of that requirement, that this be comprehensive, and all issues, especially the 

high standards related to sanitary and phytosanitary standards, 

also be complied with. 

Senator THUNE. All right. 

This question has to do with TPP, of course, being an important 

agreement relative to our trade agenda, but it should not be the 

entire agenda. I would point out that, under the previous administration, we negotiated FTAs with Chile, Singapore, Australia, Morocco, Bahrain, six Central American nations including Colombia 

and Peru, Oman, and South Korea. 

The current administration has only initiated one trade negotiation, and that is the TPP. It appears unlikely to conclude before the 

end of President Obama’s term. So, given the need to aggressively 

open new markets to American goods through new trade agreements, when do you expect the administration is going to request 

Trade Promotion Authority? And, as a follow-up, do you believe 

that the President having Trade Promotion Authority is necessary 

to successfully concluding the TPP negotiations? 

Secretary HORMATS. The Trade Promotion Authority, at this 

point, I think we are still considering what to do and when to do 

it on that. But can I address the broader point you have made, 

which I think is a very compelling one? That is, even though for 

the moment there are no active FTA negotiations under way, there 

is a very substantial effort under way to further open foreign markets in a variety of ways. 

I would say that in virtually every conversation we have with 

other governments, one of the major topics in the State Department, and I know in USTR and I know in USDA as well, is identifying barriers to American exports. While we may not have formal 

FTA negotiations under way, we still see market opening as a very 

high priority and trade in general as a very high priority. 

So I do take your point that the TPP is really the only major free 

trade area in negotiation, but, if that succeeds, it is an enormous 

step forward. I would say that it would be, in my judgment, after 

NAFTA—which was obviously very large and very comprehenVerDate Nov 24 2008 20:54 Mar 22, 2013 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 R:\DOCS\79852.000 TIMD
20 

sive—if the TPP succeeds—and enormous amounts of efforts, as Isi 

has been pointing out, have been going into that—that would be a 

game-changer for a number of reasons. 

First of all, it engages countries on both sides of the Pacific and 

in both hemispheres, the northern hemisphere and southern hemisphere. Second, it deals with the 21st-century issues that he has 

talked about: state enterprise issues, intellectual property issues, 

sanitary and phytosanitary issues. 

I would say that, if that can be done along the time frame that 

the President has outlined and Isi talked about—and he has been 

a real leader in this area with an enormous amount of energy, I 

can tell you—this would be a huge success, and the success would 

be not just the success among the nine countries, but it sets the 

standards. Other countries are interested, as you know, in participating and getting on the train, although the train is somewhere 

down the road out there. 

Senator WYDEN. Somewhere out there. 

Secretary HORMATS. Yes. It is somewhere between Portland and 

Seattle, but it has certainly left Portland. So they need to find out 

whether they can match the conditions that are required for them 

to get onto that train, and they have to make that judgment, we 

have to make that judgment, the eight other countries participating have to make that judgment. 

But I would say if this succeeds, it changes everything because 

it sets (A) high standards, and (B) other countries will want to participate. Whether they will be able to do it remains to be seen, 

whether they can meet those conditions. But they will, and they 

will want to participate, not just for the trade benefits but because 

a really good trade agreement also enhances their prospects of attracting investment. It gives opportunities for their companies to 

interact more actively with American companies. 

So I take the point that there are no other negotiations, but if 

this succeeds—and I think a lot of people have put a lot of time 

into it—this is the grand-slam home run for us and will change the 

world in a way that no other agreement for a long time has been 

able to do. 

Senator THUNE. Mr. Chairman, in the interest of time, I have a 

question I will submit for the record having to do with biotechnology trades, which I think Mr. Casper will probably address 

in his testimony in the second panel. 

Senator WYDEN. If that is your choice. We are going to have Senator Cantwell, and I am going to have another question or two. Are 

you sure you would like to put it in the record, or—— 

Senator THUNE. I can do that. 

Senator WYDEN. All right. Very good. 

Senator Cantwell has not had a turn. She is one of our most 

technology and trade-savvy legislators, and we are glad to have 

her. 

Senator CANTWELL. Thank you, Mr. Chairman. Thanks for holding this important hearing. It is important to continue to focus on 

what we are doing to gain market access for products. And yes, 

there is a lot that goes on beyond Portland and Seattle, and we are 

very proud of our large export markets there. 

21 

So I wanted to ask first, Ambassador Siddiqui, about the potato 

market in Mexico. We have been very aggressive at trying to get 

Northwest product into that country. So what are we doing to 

make sure we are fully opening access and resolving the issues 

there? 

Ambassador SIDDIQUI. Senator, the potato issue with Mexico is 

a very high-priority issue for both USTR and USDA. Both Ambassador Kirk and Secretary Vilsack of USDA have raised this issue 

during their meetings with their counterparts in Mexico. We have 

made it very clear to Mexico that we expect them to resolve this 

issue sooner rather than later. This 26-kilometer boundary which 

they have set is not based on science. There is adequate scientific 

justification to support our contention. So, we would like to have 

that issue resolved. 

As you know, there was a panel, a scientific panel put together 

at the request of USDA, which actually agreed in principle by and 

large, with our contention on this issue. So we are hoping that 

Mexico will resolve this issue in the near future. 

Senator CANTWELL. Do you think the panel of experts on—— 

Ambassador SIDDIQUI. This was on potatoes. It is called NAPPO, 

North American Plant Protection Organization. A panel was assembled after Secretary Vilsack met with his counterpart, Secretary Mayorga, about, I believe, a year and a half ago. So we are 

waiting for Mexico to make the move. 

Senator CANTWELL. And when do you expect the finality of that 

report? 

Ambassador SIDDIQUI. That is, Senator, hard for me to predict. 

But it continues to be one of the highest priorities in terms of the 

issues we have with Mexico in agriculture that we will expect them 

to resolve. 

Senator CANTWELL. All right. 

Then what are we doing with South Korea and the phytosanitary 

issue as it relates to getting apples into South Korea? What are the 

next steps? 

Ambassador SIDDIQUI. Senator, I do not have the information, if 

you are talking about the pesticide issue. 

Senator CANTWELL. Well, we are very excited obviously that the 

free trade agreement got signed, and obviously we think it represents an opportunity for a lot of Washington products—wine, 

probably all Northwest wine. But obviously there are lots of other 

products that we want to see gain access, apples being a very important Northwest product. So we just want to see what steps we 

need to take to make sure that they are going to gain that access. 

Ambassador SIDDIQUI. I was just given a note, so I think this 

issue has to do—it was not pesticide, it has to do with fire blight 

that is a disease of apples, where many of the countries have these 

restrictions against apples. 

But we will continue to work with our counterparts in Korea to 

again lift those restrictions based on science and international 

standards. This is not the first time it was raised. If you will remember, we had a similar issue with Japan before Japan allowed 

market access for U.S. apples. So, this is an old issue which comes 

up in many countries which either do not have the fire blight, or, 

if they have it, they do not want to admit it. 

22 

Ms. VETTER. Senator, if I might, it appears that Korea has indicated that they will begin the pest risk assessment process for fire 

blight, which is the first step in, unfortunately, a lengthy process 

in order to gain access. But at least that is now under way, and 

they will be working in concert with our regulatory officials to go 

through that process. So we have pushed for them to begin, and 

they have indicated a willingness to do so, and we will make sure 

that they continue along in that process. 

Senator CANTWELL. I hope that we are going to be aggressive 

about pursuing this in a timely fashion. 

Ms. VETTER. We absolutely will. 

Senator CANTWELL. Thank you. 

Thank you, Mr. Chairman. I know we are going to have a second 

panel, so I have questions for them as well. 

Senator WYDEN. Very good. We are just going to wrap up with 

a couple of other matters. 

All of you have referred to the TPP. We understand how important that is. Secretary Hormats, could you just tell us your sense 

of how important it is to have Japan part of a completed, ambitious 

agreement and how this might influence China’s embrace of rulesbased trade. As Senator Cantwell said, we have another panel, so, 

if you could just kind of capsulize this, that would be great. 

Secretary HORMATS. I will try to be brief. Thank you. I think that 

the key point at this moment is that we and our current TPP partners—and, as you know, there are nine countries altogether—are 

now having conversations among ourselves, and indeed with Japan, 

to determine whether Japan is ready to meet the high TPP standards which would provide enormous benefits, if they were, to American farmers, ranchers, and producers. It would be a great opportunity to access one of the world’s most valuable markets. 

The issue relating to China is very interesting because, if Japan 

were prepared to do what is needed to meet these high standards 

and address a number of other issues that would come up in this 

conversation, if they were, then it would send a very positive message to non-TPP countries such as China that there are advantages 

in playing by the same open, transparent, and investor-friendly 

rules as everyone else. 

TPP is open to other countries as well if—if—they can meet the 

very high standards of the agreement. So that is what we really 

are aiming at: very high standards. Anyone who wants to join has 

to be ready itself and satisfy other countries who are now in the 

process that they are ready. 

If these high standards can be met by the nine countries plus 

other countries, it raises the bar for other countries that are not 

members. The key point, Mr. Chairman, is that, when we look at 

competition around the world today—as you know, because you 

have really done a lot of thinking about this and have addressed 

this, as have other members of the committee—we are not just 

competing product-by-product anymore—although we are in fierce 

competition on individual products as well—but our system of 

rules-based practices, of science-based rules, of transparency and 

openness, is facing competition from another system which is based 

on a very centralized role of the government, on practices that do 

not necessarily embrace transparency, that do not necessarily emVerDate Nov 24 2008 20:54 Mar 22, 2013 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 R:\DOCS\79852.000 TIMD
23 

brace rigorous scientific methods for determining standards and 

regulations, where these are frequently made for protectionist or 

mercantilistic reasons, where intellectual property is not respected. 

To the extent that we can develop rules among a group of countries like these nine—and perhaps some others—that achieve these 

high standards and demonstrate that they increase trade and jobs 

in the region, that sets a very powerful example that the model 

that we regard as important and that has sustained us and other 

countries is one that other countries should embrace and is attractive, as opposed to the competing model, which we do not find attractive, first of all, and which, if more and more countries become 

advocates of that model, will weaken our system. 

We want the model that we have been producing and developing, 

along with others, to be the one that is the prevalent one, and the 

TPP is a way of developing that. So it would be a very powerful 

signal to these more state-oriented economies that do not necessarily share our views on how to run a domestic economy or how 

the global economy should function. 

Senator WYDEN. Let us do this. I am going to give you, Ambassador Siddiqui, and you, Ms. Vetter, both questions for the record. 

Ambassador, yours will deal with Japan and the question of 

phytosanitary practices and the concerns that tree fruit growers 

have in that area. 

Ms. Vetter, for you, many of the farmers are interested in looking 

at the Internet as a way to find additional opportunities for their 

markets. I know you run a variety of programs. The Market Access 

Program is one where we will ask you to respond in writing on it. 

But I want to move just slightly out of the region, Ambassador 

Siddiqui, to a question about India, because I learned something 

that just struck me as such a flagrant kind of abuse, I would just 

like to get your reaction on it. We learned recently that the Indian 

market—a very large and growing market—is essentially closed to 

Oregon wines. 

Our initial research indicated that India applies tariffs between 

100 and 150 percent on these kinds of wines. We are very proud 

of Oregon wine. Senator Cantwell is very proud of the wines of the 

Northwest of her State. The United States provides significant duty 

preferences, for example, to India under the Generalized System of 

Preferences. Is it right, in your view, that India in effect locks out 

these kinds of wines which are so important to agriculture in my 

State? 

Ambassador SIDDIQUI. Senator, this issue is more widespread 

than just the State of Oregon. We are very much aware of India’s 

high tariffs, not only on wines but many of the agricultural products, where 50-percent to 100-, or 150-percent tariffs are levied on 

those products. 

This has been one of those continuing dialogues we have with 

India in terms of opening up their markets by lowering tariffs, as 

well as removing some of the tariff barriers they have on SPS 

issues like poultry and dairy. So we continue to engage them, and 

I will be more than happy to work with your staff to explore this 

and discuss the other angle you brought up on the GSP issue. 

But we have gone to the Indian government, and they have a 

very antiquated process where, if you want to have a tariff reVerDate Nov 24 2008 20:54 Mar 22, 2013 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 R:\DOCS\79852.000 TIMD
24 

lieved, you have to go to the Indian parliament in their session, 

which takes place early in the year, January/February. You have 

to work up a list of products. We have gotten the wine subsidy— 

actually U.S. wines have been on that list, and we are urging the 

Indian government to reduce the tariffs. So far, our efforts have not 

succeeded. We will continue to work on this. 

Senator WYDEN. Let us do this. You characterize it as engaging 

the Indian government. We have to up our game here. I mean, the 

fact of the matter is, a Subcommittee on Trade and Competitiveness cannot sit around in the face of products that are such an exciting part of American agriculture and just sit around with tariffs 

between 100 and 150 percent. 

So why don’t you plan to get back to us, if you would, within 30 

days and outline for us the specific steps that we are going to take 

to, as I say, up our game and prosecute this cause much more vigorously, because I just think it is unacceptable to just have, again, 

discussions that we have about prospects of something changing in 

parliament. These are major benefits that are accorded the Indian 

government under the Generalized System of Preferences, and we 

have to get this changed. So, is that acceptable, to get back to us 

within 30 days and outline the steps there? 

Ambassador SIDDIQUI. I will get back to you, Mr. Chairman. 

Senator WYDEN. Very good. 

Thank you all. You have been extremely patient. I know my colleagues and I have other questions, but, given the challenges of the 

Senate schedule, we will excuse you at this time. I want to thank 

all of you for coming and for the valuable input. 

Secretary HORMATS. Thank you, Mr. Chairman and members of 

the committee. 

Ambassador SIDDIQUI. Thank you, Mr. Chairman. 

Senator WYDEN. Thank you. 

Our next panel is going to be comprised of, first, Mark Powers. 

He is vice president of the Northwest Horticultural Council. He has 

been around a long time, working with members of Congress and 

their staffs to achieve open markets for Pacific Northwest tree 

fruit. 

We have Mr. Steven Crider, who is the international sales manager of Amy’s Kitchen. 

I am very pleased that Mr. Steve Thomson, executive vice president for King Estate Winery, is located in Eugene, OR. 

And we have Mr. Paul Casper, who is president of the South Dakota Soybean Association. There would be something wrong in the 

world if I did not permit Senator Thune to introduce Mr. Casper. 

Senator, why don’t you do that? 

Senator THUNE. Well, thank you, Mr. Chairman. I do want to 

welcome Paul Casper to the committee today and thank him for his 

willingness to make some comments. He is the quintessential family farmer in South Dakota. He has a 4,800-acre corn and soybean 

operation near Lake Preston, which he operates with his parents, 

wife, and son. 

Married for 32 years, he has 4 great kids and works hard out 

there every single day, trying to make a living on the farm. As 

someone who has assumed many leadership positions in agricultural organizations in South Dakota, he has really stood out as 

25 

someone whom we look to for guidance and counsel and input when 

we are trying to do our best to form agricultural policy that is good 

for South Dakota and good for America. 

In that vein, he was elected as the director of the South Dakota 

Soybean Association back in 2009 and is currently serving as its 

president. So he is also on numerous other organizations, as I said, 

leadership positions in South Dakota, and we are just grateful to 

have him here and look forward to hearing from him. 

Welcome, Paul. 

Mr. CASPER. Thank you, Senator. 

Senator WYDEN. Thank you all. 

Why don’t we start with Mr. Powers? 

STATEMENT OF MARK POWERS, VICE PRESIDENT, 

NORTHWEST HORTICULTURAL COUNCIL, YAKIMA, WA 

Mr. POWERS. Good afternoon, Mr. Chairman, Ranking Member 

Thune, and Senator Cantwell. My name is Mark Powers, and I am 

pleased to be here before the committee this afternoon, testifying 

to the wonderful export opportunities the Asia Pacific region holds 

for Pacific Northwest tree fruit. 

I have submitted my full statement to the committee and ask 

that it be made a part of the record. 

Senator WYDEN. Without objection, it is so ordered. 

[The prepared statement of Mr. Powers appears in the appendix.] 

Mr. POWERS. I will move forward with an opening statement. 

I am the vice president of the Northwest Horticultural Council, 

a position I have held for the past 12 years. The Northwest Horticultural Council is a trade association. We are located in Yakima, 

WA. One of the reasons we exist, and a primary reason, is to obtain 

and maintain access to foreign markets for the apples, pears, and 

cherries that are grown in our region and exported out of Idaho, 

Oregon, and Washington. 

The point of my testimony today is to convey the fragile nature 

of these export opportunities in the Asia Pacific market, just as the 

opportunities for trade are indeed very bountiful. So are the opportunities for trade barriers. We need the strong support of the U.S. 

Government to maintain and expand access in the Asia Pacific region. 

The good news is that market access to the region for much of 

our fresh fruits is very healthy. The 3-year average value of Pacific 

Northwest tree fruit exports to the region has increased an estimated 50 percent, to over $300 million, since 2008. 

Our growers are not the only ones who recognize that the Asia 

Pacific region is a growth market. Many other countries have already negotiated, or are negotiating, free trade agreements in the 

region. For example, fresh fruit producers in Australia, Chile, and 

New Zealand now have duty-free access to Thailand, as do growers 

from China. Apples imported from the United States are assessed 

a 10-percent duty; pears, 30 percent; cherries, 40 percent. Expanding TPP to include Thailand would be a great opportunity worth 

many millions of dollars. 

During the past 12 years, I have witnessed the evolution of nontariff barriers to trade, which we have already heard quite a bit 

about. A few observations. Non-tariff barriers can be exceedingly 

26 

complex and technical in nature, as we all know. Resolution of 

these barriers requires an in-depth knowledge of the production 

systems and the specific technical concerns, be they plant pest, food 

safety, or particular industry practices. 

To address these types of barriers, expertise must be drawn from 

the private sector, the government, and academia. The effort to 

find a timely solution that is commercially viable requires close 

consultation and coordination between all parties, yet the mechanism for making this process occur is, at best, ad hoc. In addition, 

unlike tariff barriers, the resolution of technical barriers often involves regulatory agencies which can present an entirely different 

level of complexity to problem resolution. 

As an example, only a few weeks ago there was considerable 

question whether cherry growers would maintain access to Australia this year. A phytosanitary concern is a fruit fly called spotted 

wing drosophila. It is native to Asia and a recent invasive pest in 

the United States. Unless a resolution could be found to a plant 

pest problem for a commodity of Australian producers wanting to 

export to the United States, we were not going to get access to the 

Australian market. Luckily, late last week the two governments 

came to an agreement that will allow our growers to export cherries to Australia this season. 

Now, as we all know, under WTO rules or obligations these types 

of technical barriers to trade, are supposed to be resolved on their 

respective technical merits. In reality, the resolution of issues is 

much more political. It involves the U.S. providing something of 

benefit to a trading partner in exchange for obtaining resolution of 

a non-tariff barrier. 

A final observation. At the end of the day, if a trading partner 

is unwilling to remove a barrier to trade, there is very little recourse available to small exporters such as the ones I represent. 

Neither dispute resolution through the WTO at one end of the spectrum, or continued technical discussions at the other end, is a rapid 

process or holds any guarantees of success. The example for this 

I would draw on is the current situation facing us in Indonesia, described further in my written testimony. 

In short, the Asia Pacific region provides significant opportunities for those trading apples, pears, and cherries. The prospects 

look good for continued success in the future, so long as protectionist forces are kept at bay. 

Thank you, Mr. Chairman and committee members for the opportunity to participate in this important public hearing. I look forward to answering any questions members of the committee may 

have as a result of this testimony. 

Senator WYDEN. Thank you, Mr. Powers. Excellent testimony. 

You set the land speed record for completing it, too, today. We 

thank you. 

Mr. Casper, welcome, from Sioux Falls, SD. 

STATEMENT OF PAUL CASPER, PRESIDENT, SOUTH DAKOTA 

SOYBEAN ASSOCIATION, SIOUX FALLS, SD 

Mr. CASPER. Thank you very much. Good afternoon, Mr. Chairman, members of the subcommittee. I am Paul Casper, a soybean 

grower and farmer from Lake Preston, SD. I serve as president of 

27 

the South Dakota Soybean Association, which is an affiliate of the 

American Soybean Association. We appreciate the opportunity to 

appear before you today to provide our views on agricultural trade 

with the Asia Pacific region. 

Soybeans and soybean products are the most significant U.S. agriculture export commodity. Exports of U.S. soybean products exceeded $22 billion last year, representing over 60 percent of the 

U.S. soybean production. South Dakota has become a leading exporter of soybean products, with sales to foreign markets reaching 

a record $1.04 billion in 2010, compared to just $348 million in 

2006. 

The rapidly growing markets in the Asia Pacific region, led by 

China, are key drivers of U.S. soybean demand. In fact, 6 of the 

top 10 foreign markets for U.S. soybeans are in the Asia Pacific region. China is by far the largest customer of U.S. soybeans, with 

purchases of more than $10.6 billion last year. Japan was the third-largest market, with the purchase of $1.2 

billion. Other significant buyers of soybean products in the region 

include Indonesia, with its purchase of $870 million; Taiwan, with 

$714 million; South Korea, with $362 million; the Philippines, $353 

million; and Thailand, which purchased $195 million worth of soybean products last year. 

With the recent implementation of the South Korea FTA, U.S. 

soybeans for crushing and U.S. soybean meal now enter Korea 

duty-free. U.S. food-grade soybean producers will also have access 

for the first time outside the Korean import monopoly. The FTA 

creates landmark opportunities for meat and poultry exports which 

should further boost local consumption of soybean meal. 

The Trans-Pacific Partnership, TPP, and the free trade agreement would also provide market opportunities for soybeans and 

other U.S. agricultural exports, especially as it established a broader Asia Pacific trade arrangement. Entry of Japan into the TPP negotiations would increase the economic significance of the agreement, and soybean farmers strongly support Japan joining the negotiations. 

While soybeans and soybean meal enter Japan duty-free, Japanese barriers to livestock exports are much more restrictive. Their 

removal under a TPP agreement would offer substantial new opportunities to expand U.S. exports to Japan of dairy, pork, beef, 

and poultry products, which should boost domestic demand of soybeans and soybean meal. 

Substantial potential exists for expansion of agriculture and soybean trade between the United States and the region. Vietnam, for 

example, is a rapidly growing market for soybean products. Since 

joining the WTO, Vietnam’s imports of U.S. soybeans rose to $150 

million last year, compared to $7.4 million in 2006. 

There also remains great potential for expansion of U.S. agricultural exports to the region if non-tariff barriers restricting U.S. exports can be eliminated. A key area that affects exports of U.S. soybeans concerns the policies that regulate agricultural commodities 

derived through biotechnology. 

As I stated earlier, China is our single-largest export customer. 

Soybean products purchased by China last year represented 50 percent of all U.S. soybean exports and 25 percent of U.S. soybeans 

28 

harvested. But China’s slow regulatory approval process for commodities containing biotech traits causes great concern. 

China is the only major importing country that requires biotech 

events be fully approved in the country of development before it 

will accept any application for its registration to export the product 

to China. This requirement delays commercialization of new traits 

in the U.S. for as much as 2 years. On this issue, we strongly support the initiative put forth by USDA to China to implement a pilot 

project to attempt to begin to address these issues. 

In general, however, the soybean sector’s impressive export 

growth in the region could not have been achieved without unique 

government/industry partnerships that characterize the Foreign 

Market Development program, FMD, and the Market Access Program, MAP. However, our competitors in South America also continue to increase exports to Asia Pacific markets as their production levels jump to new records. 

Despite slower world growth, the outlook for agricultural trade 

remains promising. We strongly encourage the U.S. Government to 

pursue market-opening initiatives in this region, and we strongly 

support the inclusion of Japan in the TPP negotiations. 

Thank you, Mr. Chairman, for the opportunity to present our 

views here today. I am happy to respond to any questions later. 

Senator WYDEN. Very helpful. 

[The prepared statement of Mr. Casper appears in the appendix.] 

Mr. Crider? 

STATEMENT OF STEVE CRIDER, INTERNATIONAL SALES 

MANAGER, AMY’S KITCHEN, MEDFORD, OR 

Mr. CRIDER. Chairman Wyden, Ranking Member Thune, and 

members of subcommittee, I am Steve Crider, international sales 

manager for Amy’s Kitchen. I am engaged in the export of highvalue organic foods. In my current role with Amy’s Kitchen, a manufacturer of frozen organic meals, pizza, and canned soup, I am responsible for the international market development in Canada, the 

Middle East, the Pacific Rim, and Asia. I also serve as Amy’s liaison to the Organic Trade Association. 

Thank you for this opportunity to provide testimony regarding 

policies to increase trade with the Pacific Rim as part of the TransPacific Partnership agreement. 

For those of us working on the front lines of sales in a rapidly 

changing business environment, it is clear that the Pacific Rim’s 

regional economy is extremely dynamic and poised for continued 

growth. U.S. agricultural exports will have many opportunities and 

advantages in meeting the dietary demand of these markets. There 

remains an active and important role government can play in assisting U.S. companies to compete and succeed in these regions. 

Today, U.S. organic sales are in excess of $31 billion. Despite the 

worst recession in modern times, the industry still grew by almost 

6 percent in 2009. The most recent figures available for 2011 show 

we are currently growing at 9.5 percent. 

We see the same general trend within our business at Amy’s 

Kitchen. Investing in organic production is a sound business decision. Amy’s Kitchen is based in California and Oregon. We are a 

family-owned and -operated business. Our success is founded on 

29 

producing, in our own factories, high-quality, delicious foods using 

organic and natural ingredients. Together, our two production facilities employ over 2,000 people, supplying over 250 organic food 

products to the U.S. and global markets. 

We procure the majority of our organic ingredients from local 

sources, but, in deference to Senator Thune, Amy’s also sources 

hundreds of tons of organic grain and soy from America’s breadbasket in the Midwest. This activity, in turn, supports a large network of organic farm producers and rural communities. 

Export markets play an increasingly important role in Amy’s 

business. We have added new, well-paying jobs in our company to 

support this expanding growth in market demand for the container 

loads of our products that we ship overseas. 

The same is true for our domestic business. Today, Amy’s Kitchen can be found in mainstream retailers such as Wal-Mart, Kroger, 

Cosco, and many others. Increasing consumer demand for organic 

food is driving this placement in conventional retail settings, and 

this trend is being replicated worldwide in major cities all over the 

world. 

Our appeal today is for Congress to continue to support key programs that nurture and promote U.S. agricultural exports, especially now when American foods have such a great opportunity to 

supply the Pacific Rim. Our key requests are as follows: maintain 

the strength of the national organic program. The U.S. ‘‘Organic’’ 

seal establishes the credibility of the Amy’s product claim here at 

home and in global markets. 

Let us build on the successful negotiations for organic equivalency we accomplished with Canada, and most recently with the 

E.U. This historic achievement will reap huge benefits for American food exporters for generations to come. It is crucial to note 

that Asia and the Pacific Rim are now poised to follow suit in 

eliminating this type of trade barrier, and I can elaborate further 

during question time. We have great confidence that the U.S. Government negotiators will continue to be smart, far-sighted, and fair 

in upcoming organic trade negotiations. 

Second, we ask Congress, the USTR, and USDA to continue to 

press for the reduction of import duties and tariffs on U.S. agricultural products. Amy’s Kitchen is often hit with tariffs that can be 

as high as 30 percent. Reducing these tariffs in trade agreements 

is crucial to expanding export growth and making our U.S. products more affordable to consumers in these emerging markets. 

Third, expand the criteria for participation in FAS programs so 

that more medium- and larger-sized companies can engage. In 

order to meet the aggressive goals for U.S. exports in the President’s National Export Initiative, we need these larger players participating in market access and export development programs. 

Likewise, matching fund programs make it possible for the organic industry to participate in key trade shows. These international marketing events result in millions of dollars of new and 

incremental sales. Simply put, from global demand comes export 

sales, which in turn drive increased production, expanded organic 

acreage, and more jobs here at home. 

We at Amy’s Kitchen are seizing these opportunities as more consumers worldwide look for healthy, tasty, and convenient foods. 

30 

With your help and support, we will continue to expand into these 

foreign markets. Amy’s growth shows no sign of slowing down, and 

we look forward to contributing our part in doubling U.S. exports. 

Senator WYDEN. Mr. Crider, thank you. As both a consumer of 

the wonderful products that come from Amy’s Kitchen and being 

able to represent you and your employees in the U.S. Senate, we 

are glad you are here and appreciate your testimony. 

Mr. CRIDER. And we are proud to be a producer in Medford, OR. 

Senator WYDEN. Very good. All right. 

[The prepared statement of Mr. Crider appears in the appendix.] 

Senator WYDEN. Mr. Steve Thomson, King Estate Winery. Wonderful wines that ought to be in India, by the way. 

Mr. THOMSON. We are working on it. 

STATEMENT OF STEVE THOMSON, EXECUTIVE VICE 

PRESIDENT, KING ESTATE WINERY, EUGENE, OR 

Mr. THOMSON. Thank you, Mr. Chairman, Ranking Member 

Thune, and Senator Cantwell. It is an honor to be here today. I 

want to thank Senator Wyden for convening this hearing and providing an opportunity for King Estate to speak about opportunities 

and challenges with trade to Asia. 

I have provided a full draft that I would like to submit for the 

record. 

[The prepared statement of Mr. Thomson appears in the appendix.] 

Mr. THOMSON. Pacific Northwest agriculture producers have benefitted greatly from exports to Asia. We anticipate continued 

growth in wine exports to Asian markets for many years to come. 

But this is not to suggest that trade with Asia is without significant challenges. In the remarks that follow, I intend to offer a brief 

summary of the present state of U.S. and Northwest wine trade to 

Asia and discuss the support and collaboration required to ensure 

that U.S. producers can compete on a level field. 

Today’s hearing is a great opportunity to identify and advance 

the linkages between the administration’s National Export Initiative and the goals and objectives of the Pacific Northwest wine industry. Exports are a vital part of the U.S. economic engine, and 

the U.S. wine industry is poised to grow and contribute. 

There are over 1,000 wineries in the Pacific Northwest, the vast 

majority of which are small family wineries generally supported by 

small family farms. Pacific Northwest wineries represent vibrant 

jobs creation and revenue growth. Recent economic impact studies 

for Oregon and Washington demonstrate that the wine industries 

in these two States likely deliver over $7 billion in in-State economic impact and nearly 40,000 jobs. 

For many Asian consumers, wine is increasingly seen as fashionable, healthy, and a status symbol. As we see historically strong 

wine consumption in Europe decrease per capita, we see per capita 

consumption in Asia increase. 

Presently, per capita consumption in France leads the world, at 

50 liters per person, and is falling. Per capita consumption in the 

U.S. and Japan is 15 liters and 2 liters per person, respectively, 

and increasing. Per capita consumption in China is presently a 

mere 0.5 liters per person and is growing strongly. 

31 

While U.S. wine exports show strong growth, the U.S. presently 

exports far less wine than it imports. Given this imbalance and the 

opportunities abroad, it is very important for our industry to develop and grow new markets, such as Asia. Total wine trade for the 

Asia Pacific region was $18 billion in 2010, with U.S. exports to the 

region being just $243 million, still a 39-percent increase over 

2009. Asia Pacific is now the second-largest export market for U.S. 

wine. These numbers demonstrate that Asia Pacific is a critically 

important market for U.S. wineries. Persistence in collaboration 

will be required to ensure it stays that way. 

I would like to briefly outline three areas of concern and focus 

for our industry moving forward. First is the need for continued 

funding for export assistance programs and greater collective export marketing cooperation among regional industries. Second is 

the pursuit of more favorable trade agreements and reduction of 

non-tariff trade barriers. Third is the need for harmony, clarity, 

and ease of regulatory issues for our exporting producers. 

USDA’s export assistance programs, such as the Market Access 

Program, have become the backbone of wine exporting for most 

U.S. wine regions. The funding is modest but vital, and the investment is more than 50 percent matched by wineries large and small. 

Dollar investments alone are not a guarantor of success, however. U.S. trade policy is lagging in terms of removal of barriers to 

trade in Asia. The Pacific Northwest wine industry supports free 

trade agreements that improve market access and competitiveness. 

China represents a market of untold potential for U.S. wine marketers. Wine consumption is increasing rapidly, as is the quality of 

wine being consumed. However, the U.S.’s share of wine imports to 

China is falling. Awareness and penetration is very low for U.S. 

wines. In China, imports from France, Australia, and Chile are 

leading the growth. France now has a market share of 52 percent. 

All three of these competitors rely on aggressive pricing to build 

new markets. France is supported by subsidies in the form of the 

E.U. Export Rebate Program. 

Chile and New Zealand have focused on pursuing trade agreements. Our industry needs to promote better coordination, perhaps 

with a national branding strategy that would create more of an 

identity for U.S. wine in export markets. This is the approach that 

successful countries such as France, Italy, and Spain favor with 

their export strategies. 

Finally, the Pacific Northwest wine industry can benefit greatly 

from clarification and standardization of regulatory issues. Documentation can be cumbersome, costly, and with little transparency 

or timeliness. 

The market engine for worldwide consumption is gradually shifting from Europe to Asia. The wine production engine of the world 

is gradually shifting from Europe to the West Coast of the Americas, from Washington in the north, through Oregon and California, 

to the countries of Chile and Argentina in South America. 

The West Coast of the United States represents perhaps the 

highest volume in concentration of potential fine vineyard plantings in the world. Much of Asia is only marginally suited for fine 

wine production and with substantial quality limitations; there is 

a great supply and demand fit. 

32 

It is important that the U.S. Government continue to work to 

eliminate tariff and non-tariff trade barriers for U.S. wine exports. 

We ask Congress to pursue free trade agreements with markets 

that offer growth opportunity. We urge Congress to reauthorize the 

Market Access Program funding as part of the 2013 Farm Bill, and 

that it continue to be fully funded at the $200 million level. 

In closing, the wine production and consumption growth engines 

of the future may well lie on either side of the Pacific Rim. The 

U.S. wine industry has unique resources and potential access to 

markets that will ensure that this industry is a big winner in the 

U.S. economy. It is vital that the U.S. wine industry have the political and economic resources to succeed. 

Thank you, Mr. Chairman. 

Senator WYDEN. Thank you very much, Mr. Thomson. I thought 

that last point was especially telling. There is no question that 

your products are going to be a hit in the Asia Pacific region. We 

just have to make sure that your government adopts policies so you 

can get them in. So, we appreciate it. 

You now have three Senators trying to deal with the procedural 

rhythms of an institution that is almost incomprehensible at this 

time of the day, so Senator Cantwell is going to start, and then we 

are going to see if Senators Thune and I can juggle this. 

So, Senator Cantwell, go ahead. 

Senator CANTWELL. Thank you, Mr. Chairman. Thank you for 

that courtesy. I greatly appreciate it. Panelists, thank you so much 

for your testimony. 

Mr. Crider, I think you actually have a facility in Skagit County 

as well. 

Mr. CRIDER. That is where I am based, yes. 

Senator CANTWELL. Great. Well, we are glad you are here. Amy’s 

is a good product, so thank you for having facilities in our State 

as well. And Mr. Thomson, I am sending a letter to the Agriculture 

Committee this week in support of the MAP program. It is vitally 

important, and hopefully this proposed legislation will include that. 

Mr. THOMSON. Thank you. I would also like to point out that 

King Estate Winery has a winery project in the Columbia Valley 

of Walla Walla, and we produce Washington wines as well. 

Senator CANTWELL. All you have to say is, ‘‘There is good wine 

in the Northwest,’’ and that is good by us. 

So, Mr. Powers, I wanted to talk about apples, if we could. Thank 

you for representing the Northwest horticulture industry and all 

that you do. One of the issues that I want to talk about is China. 

Obviously they do allow access to two varieties, and yet, if you look 

at the Yakima Valley and our production in general, two-thirds of 

that production, we are looking at a variety of varietals that are 

not allowed in China. 

We have had these issues and discussions. You heard what my 

questions were to our Trade Representative, trying to push forward 

on getting access to markets. So what do we need to do to make 

sure that we get more than two varieties and get past these issues 

that are not—we do not need pest assessments. That is not what 

the problem is. So how do we get past this? 

Mr. POWERS. That is an excellent question, a longstanding one. 

We have been seeking access for apples to China since the midVerDate Nov 24 2008 20:54 Mar 22, 2013 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 R:\DOCS\79852.000 TIMD
33 

1990s, or the early 1990s. We do have access for two varieties. 

Really, varietal issues are not at the heart of SPS questions, really. 

I mean, if we have access for apples we should have access for all 

varieties of apples. 

However, China does not necessarily see it that way. While the 

two technical agencies have been involved in dialogues for years, 

at a certain point—and this happened a few years ago—there was 

a recognition that this was not about a technical dialogue, this was 

basically a political matter. I think that is, at the heart of it, what 

we are facing. 

We are not just facing it in China, we are facing it in many countries where the technical discussions can go on and on and on, and 

oftentimes do. What is needed is a political solution, or a political 

trade-off at the end of the day, that needs to occur. 

With China, I think that is the same situation, and it is a dicey 

one, because, as you may know, the Chinese want access into the 

U.S. for their apples. So the U.S. is working through the Animal, 

Plant, and Health Inspection Service, is working through that pest 

risk assessment on Chinese apples. That process is unfolding. 

We have legitimate concerns about the threat of invasive pests 

that might be present on apples coming from China. So, until that 

process works through—and we want to make sure that it is thorough—we are unlikely to see much in the way of advances on our 

other apple varieties into China, simply because things are not necessarily resolved on the basis of their technical merits. 

I do not have a solution, quite frankly. I think that it will have 

to continue to be part of the dialogue between the two governments, and hopefully a resolution will appear. But there is no real 

technical reason at this point related to fire blight that would not 

allow our apples to go—— 

Senator CANTWELL. And so, what do you think the solution is 

from a political perspective? How do you get the issue above the 

discussions that it is on the technical points and up to the political 

level? What do you think that takes? 

Mr. POWERS. It takes more than what we have been able to do 

so far. I do not have a great solution to that. I think that there has 

to be something of value to China in order to move forward, and 

at this point what we know is that they have basically said, until 

we allow them to have access into the U.S. for their apples, they 

are not going to move forward on our apple access issue. 

Senator CANTWELL. And where do you think we are with pears? 

Mr. POWERS. Pears, I am much more optimistic. Again, it is a 

longstanding issue. China has access to the U.S. for two varieties 

of its pears, and APHIS is now working on the third variety. That 

process is in rulemaking at this point and appears to be moving 

forward. There is a clear recognition that China needs to allow us 

in the Northwest and in California to have access for our pears 

going into China. 

They are working on a work plan. They, being the two plant 

health agencies, are involved in that. So we are hopeful that, perhaps by this next harvest season or, if not, the next one, that the 

technical issues will be resolved and exports will be allowed to 

move forward. 

34 

Senator CANTWELL. Well, I certainly hope so. I thank you for 

your work in this area. Having visited Chinese supermarkets and 

seen these products there, you want to make sure that we get access and compensation for the products that are there. So, I would 

hope that we could continue to make movement on these issues 

and find a solution that would give this wide variety of products 

from our State access to that market. 

So, thank you, Mr. Chairman. I appreciate it. 

Senator WYDEN. Thank you, Senator Cantwell. 

At this point I am going to ask just a couple of questions for the 

record, and then see if I can get back. Also, on Senator Cantwell’s 

point, it seems to me with these bilateral dialogues, particularly 

with China, apropos your point, Mr. Powers, given the fact that we 

have these formal talks essentially every year, we ought to get 

these phytosanitary issues up at the top of the priority list for 

these bilateral dialogues. I share Senator Cantwell’s concerns. We 

are going to follow up with those of you who are expressing this 

concern about the phytosanitary practices. Thank you, Senator 

Cantwell. 

Let me, if I might, just ask one question for now and then I am 

going to turn it over to Senator Thune. If I can get back, I am 

going to come back. Do not interpret this as an insult, it is just 

that the Budget Committee is about to wrap up. If I cannot get 

back, then Senator Thune will adjourn. 

Mr. Crider, on this question of organic equivalency in the Asia 

Pacific area, obviously this would be a chance for us to get an exciting, high-growth product into the region. What does this really 

mean, in something resembling English, to have a requirement for 

organic equivalency? 

Mr. CRIDER. Well, every nation establishes its own criteria and 

definition of ‘‘organic.’’ It would be unreasonable to expect that 

these be perfectly in synch. Different conditions exist and different 

farming situations exist. However, we cannot allow those minor differences to become a reason for trade barriers to exist. We can coexist with differences. In fact, the differences between us and the 

E.U., we are 99 percent the same, and we allowed the 1 percent 

of difference to become a reason for not allowing U.S. products to 

be called organic in that marketplace. 

So, even though Amy’s was exporting to Europe for a number of 

years, we had to remove the ‘‘O’’ word from all of our packaging. 

We are a natural food company, so we were unable to compete on 

a fair level there. That has been eliminated. 

So over time—and there have been many years in this process— 

the negotiation with Canada broke this logjam of allowing this 1 

percent of difference to become an impediment to trade in mutual 

recognition of each other’s organic processes and standards. 

From the Canadian agreement, it opened up the E.U. Now we 

are poised in this unique situation where Korea and Japan, who 

have organic standards which are different from ours that fit their 

region, but they are not necessarily based on what our standards 

are, we have something that they want. We finally have some bargaining chips here. They want access to our market for their organic foods, and we want access to their market for Americanproduced organic foods. 

35 

So again, reaching a higher level of understanding where we respect each other’s differences but do not allow those differences to 

become the impediment or a reason to deny a marketing claim in 

that marketplace for that high-valued product is kind of what we 

are driving at. 

Senator WYDEN. Mr. Thomson, I am not going to ask you any 

questions right at this point. I think you could see from my discussion with Ambassador Siddiqui that I do not think wine is getting 

the priority that it deserves in some of these key high-growth kinds 

of markets. I just want you to know that, on our watch, we are 

going to change that. 

Mr. THOMSON. Thank you. 

Senator WYDEN. We are going to stay at it until it gets changed. 

I mean, this is too important. It is important to Oregon, but it is 

important to the country. This is a high-growth area of agriculture, 

and we are going to make a very aggressive push until it gets fixed. 

With that, I think I am going to turn this over to Senator Thune. 

I want to thank him for his patience. I am going to try to get back, 

Senator Thune, but why don’t you just proceed with the questions 

that you would like? If I cannot get back, why don’t you just wrap 

it up? I very much, as usual, appreciate your cooperation. 

Senator THUNE. All right. Thank you, Mr. Chairman. 

Let me, if I might, say just as a question to Mr. Casper, in your 

testimony you talk about how greater market access for meat products such as beef and poultry will spur greater domestic consumption of soybeans, which is used as a feed for the animals from 

which these products are produced. This is in regard to the importance of the Asia Pacific market to America’s soybean producers. 

Could you expand upon this point and talk specifically about how 

greater access into markets such as Japan and Vietnam for pork, 

poultry, and beef will benefit soybean farmers such as yourself? 

Mr. CASPER. Yes, Senator, I will. Increases in the meat and pork 

and poultry exports make our domestic meal markets larger for our 

customers here in the United States. A 1-percent increase to U.S. 

beef and pork exports sends more than 2 million bushels of corn 

and soybeans overseas. So, if we can process that protein here in 

the United States, rather than shipping the raw soybean and corn 

over, and put it through livestock production and send that over, 

it has a great impact on that, not only in the meal and light distillers’ grain use, it also takes and puts many more employees to 

work, and we are increasing that opportunity to keep that value 

added here in the United States. 

Just one more note. For every pound of U.S. pork exported, it utilizes 1.5 pounds of U.S. soybeans. So it is so important, if we can 

process here that soybean meal and send the ready product in animals and birds across, it is much, much more beneficial for this 

country. 

Senator THUNE. In your testimony, you also talked about the 

competition that U.S. soybean growers are facing in global markets, especially from South American nations such as Brazil and 

Argentina. Could you discuss how U.S. soybean producers plan to 

stay a step ahead of your competitors? Do you believe that the 

quality of your product gives you an advantage over soybeans produced in other countries? 

36 

Mr. CASPER. Well, with regards to our quality, yes, I truly believe 

that. In fact, we have funding here, State and national funding, 

with regards to amino acid research. If you understand how amino 

acids work in livestock, it is very beneficial with regards to what 

the U.S. production is on the amino acid side. So that has really 

gotten us a competitive and quality advantage, and sustainability. 

Also, we need to be more competitive, and in order to do that we 

need to streamline our approval process of our biotech traits with 

regards to APHIS, which we understand they are currently doing. 

Otherwise, technology providers will bring their technology to 

South American farmers because their process is emerging with 

greater efficiency. 

Sometimes I think we get ourselves in positions where we are 

falling behind. We are the number-one soybean producer in the 

world, and, if South America would have had their crop like they 

anticipated, they may have taken over that number-one position 

this year. We do not want to give that up. Please do not put us 

in a position where we lose that. We want to be the number one. 

We want to stay competitive, and those markets are very, very important. Biotechnology is very important to us. 

Senator THUNE. Let me expand on the biotechnology issue with 

regard to China. I would like to have you describe in a little bit 

more detail if you would the problems that China’s approval process is creating for soybean farmers in the United States. Do you 

believe that USDA—as a follow-up question—and USTR are doing 

all that can be done to effectively address that issue? 

Mr. CASPER. Yes, we do. We appreciate it very much, and we believe they are doing everything they can. But perhaps we need to 

take this a little bit further, like to the White House. I think this 

needs to be a priority. This is a pretty big deal for us. 

Senator THUNE. All right. 

Let me just, if I might—and anybody feel free to answer this 

question. In fact, I would like to get probably a response from all 

of you. You all depend on access to new markets for your products, 

as more than 95 percent of the world’s consumers lives outside the 

United States. 

I would be curious to know from each of you if you have a view 

on the renewal of Trade Promotion Authority, which I referenced 

earlier in my opening remarks, the process under which nearly all 

of our trade agreements have been approved, and if you believe 

that renewing the Trade Promotion Authority that expired in 2007 

is important. 

Mr. Powers? 

Mr. POWERS. We do believe it is important to regain that authority, that the administration should have it, and we are fully supportive of providing that authority to the President. 

Senator THUNE. All right. 

Mr. CASPER. With our location in the very Northwest growing region of the United States, that Asia Pacific region is so beneficial 

to us. Rather than waiting for the river to un-thaw, because we are 

limited with the river market, we can load up our products right 

in South Dakota, down the rail, out the harbor and across the 

water it goes. So, it is very, very important to us. 

Senator THUNE. All right. 

37 

Mr. Crider? 

Mr. CRIDER. The organic industry does support that, yes. 

Senator THUNE. All right. 

Mr. Thomson? 

Mr. THOMSON. Yes. The wine industry would support that as 

well. We see the Pacific Rim and the wine industry on the Pacific 

Rim as being just a really powerful value-added export generator 

in the coming few years. 

Senator THUNE. All right. Well, I hope your various organizations 

will convey that to the administration as well. We have tried to do 

that, and we have had Ambassador Kirk in here, and others. For 

the life of me, I do not know why we have not been able to make 

any headway on extending TPA and moving forward with free 

trade agreements. We finally got the three that were negotiated 

under the previous administration approved and entered into force, 

but now we have expired TPA. 

With the exception of the Trans-Pacific Partnership, nothing is 

really going on out there on the horizon in terms of looking at additional market opportunities. There does not seem to be a sense of 

urgency about it. You heard what the previous panel said in terms 

of, they are focusing on opening markets. 

But, clearly, one of the best ways we have seen to do that in 

terms of the results has been negotiating free trade agreements. 

Without TPA, absent TPA, we are just not able to do that. So, I 

would hope that you would carry that message as forcefully as you 

possibly can to members of the administration through your various organizations and members. 

Let me just ask sort of one general question. We have a challenge, I believe, in the country in helping people recognize the 

value of trade. I think that a lot of times Americans do not always 

appreciate how important export markets are to job creation here 

at home. They, in many cases, I think, view that as something that 

is happening overseas, but does create thousands of jobs here in 

the United States. 

I am wondering if there is anything that you can do as producers 

who rely on foreign trade to better educate American consumers as 

to the benefits of trade, international trade. Any thoughts about 

that? 

Mr. POWERS. I will take a stab at it, certainly. Even among some 

of our own growers, I think there is continual outreach that we do 

in terms of the importance of trade, how that benefits our region 

locally. We do get the word out through trade associations and 

other organizations, like the Washington International Trade 

Council and others, to try to have an active response either 

through editorials or a voice to the greater U.S. population about 

the importance of trade. 

I mean, just in a small industry—and ours really is a small industry. We are talking about $800 million worth of exports in a 

year. To our region, that is direct money coming in from foreign 

consumers. That is an economic engine. It is rural communities. 

That $800 million obviously spins off into additional economic benefits. Our calculation is about $1.5 billion and 7,300 jobs come out 

of those dollars, et cetera. So we have a great story to tell. 

38 

We get that message out as best we can, and we will continue 

to do that. I think the challenge sometimes is reaching the right 

people. It is easier to hear about the down sides and the difficulties. I mean, even in this committee, what we are talking about are 

problems even though we are very successful in terms of exports. 

But we are focused on solving these problems, and hopefully folks 

realize that, and we will certainly do a better job if we can get the 

word out in our neck of the woods. 

Senator THUNE. Yes. Thanks. 

Paul? 

Mr. CASPER. Senator Thune, it is kind of interesting. When I first 

started farming—it was quite a few years ago, actually—our job as 

farmers was to produce enough food to feed this country. The last 

few years, the meetings that I go to, with the population explosion 

expected, I have to double my production in 30, 35 years. I have 

a task every day when I wake up that I have to feed not only the 

country, but the world. In order to do that, science-based technology has to be provided for me to do that. 

I have to have market access. And bridge-building rather than 

wall-building is so important here. So there are consequences for 

decisions made, and we need bridges, not walls. So we have a task, 

as producers of food in this country, that is enormous. Seriously, 

there is not a time in a day that I do not think about that, because 

that is what my job is supposed to be—looking out with regards to 

the future. We need your help to do that. 

Senator THUNE. Thanks. Thank you. 

Anybody else? 

Mr. CRIDER. I would have two points. One, the quality and variety of U.S. agriculture products are competitive and respected 

around the world. We are second to none in what we can do in providing high-quality food to consumers all over the planet. 

However, on the trade side, I was based in Japan for 9 years. I 

was there when the beef and orange agreement was agreed to, 

when the rice millers tried to bring their food in. We need to be 

playing chess, not checkers. We have to be sophisticated and 

forward-thinking in these trade agreements. 

When we opened the doors in Japan, we were the bullies. We 

kicked down the door: we are going to open this market for beef 

and oranges. It was not American products that walked through 

that door, it was Australian products that went through that door. 

It is not American rice that is going into Japan, it is Thai and Vietnamese rice. 

So our follow-through on creating these openings has to be longterm and well thought out and supported with the follow-through 

that allows the American products, once we create those openings, 

that we are the ones who benefit from the change. I do not think 

we have been as sophisticated and as proactive in that as we need 

to be. I will leave it at that. 

Senator THUNE. Thanks. 

Mr. Thomson? 

Mr. THOMSON. Yes. Senator Thune, we struggle in this country 

to create jobs. In my testimony, I pointed out that in the Pacific 

Northwest—and these are very new industries in Oregon and 

Washington in particular—recent economic impact studies demVerDate Nov 24 2008 20:54 Mar 22, 2013 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 R:\DOCS\79852.000 TIMD
39 

onstrated that the wine industry in those two States has delivered 

over $7 billion in in-State economic impact and nearly 40,000 jobs 

in these very new industries. 

We have wineries in every State in the Union now. In fact, we 

have nearly 20 wineries in South Dakota. So, this is an opportunity 

again where we have an export value-creating model that is going 

to present a fantastic opportunity for the American trade balance 

and the American worker moving forward. 

Senator THUNE. Yes. Well, I think the sky is the limit. You look 

at 95, 96 percent of the world’s population living outside of the 

United States and the capacity, the technology—as long as we can 

continue lowering barriers in these countries, and these trade 

agreements have helped remarkably in doing that—I just hope that 

we can continue to allow American producers, who are the best in 

the world, to continue to help feed the world. 

So we certainly welcome any additional thoughts, ideas, and 

input that you would have, and we appreciate your willingness to 

be with us today. I will conclude. I do not think the chairman is 

going to make it back. But, if there are any additional comments 

or thoughts that you have, we will keep the hearing record open 

for a few days. Five days. We will keep the hearing record open for 

5 days. Again, we appreciate very much your being here today and 

your very insightful comments. Thank you. 

This hearing is adjourned. 

[Whereupon, at 4:10 p.m., the hearing was concluded.] 

(41) 

A P P E N D I X 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD


79852001.eps
42 


79852.002
43 


79852.003
44 


79852.004
45 


79852.005
46 


79852.006
47 


79852.007
48 


79852.008
49 


79852.009
50 


79852.010
51 


79852.011
52 


79852.012
53 


79852.013
54 


79852.014
55 


79852.015
56 


79852.016
57 


79852.017
58 


79852.018
59 


79852.019
60 


79852.020
61 


79852.021
62 


79852.022
63 


79852.023
64 


79852.024
65 


79852.025
66 


79852.026
67 


79852.027
68 


79852.028
69 


79852.029
70 


79852.030
71 


79852.031
72 


79852.032
73 


79852.033
74 


79852.034
75 


79852.035
76 


79852.036
77 


79852.037
78 


79852.038
79 


79852.039
80 


79852.040
81 


79852.041
(83) 

COMMUNICATION


79852042.eps
84 


79852.043
85 

Æ 


79852044.eps