OPENING STATEMENT OF CHAIRMAN CRAIG, SUBCOMMITTEE ON FORESTRY, CONSERVATION AND RURAL REVITALIZATION,

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, HEARING ON S.2709, THE TRADE INJURY COMPENSATION ACT OF 2000 (TICA)

SEPTEMBER 25, 2000

The Subcommittee on Forestry, Conservation and Rural Revitalization of the United States Senate Committee on Agriculture, Nutrition and Forestry will now come to order.

Good Morning and Welcome. We convene to take testimony on S.2709, the Trade Injury Compensation Act of 2000, or TICA, as it is commonly known. And, we will be looking generally at the issue of the European Union's (EU) ban on U.S. beef.

Since 1989, the European Union has banned importation of U.S. beef on the false premise that additional, naturally-occurring, growth hormone in U.S. beef constitutes a health risk to consumers. This premise is demonstrably, scientifically false, as was found by the World Trade Organization.

In 1999, the WTO authorized $116.8 million in retaliatory duties. Theoretically, imposing 100% duties would block importation into the U.S. of $116.8 million worth of EU products targeted with such duties. But, the U.S. implementation of WTO's retaliation authority has not been effective. The EU ban on ALL U.S. beef continues, and, EU goods carrying 100% duties are still being imported into America. USTR calculates that $35.65 million in EU goods with a 100% duty were still imported between July 1999 and June 2000.

To strengthen the retaliation tool, Congress instructed USTR [in the Africa/Caribbean Basin Initiative legislation] to impose "carousel retaliation" by June 20, 1999. We want to know why USTR has not yet acted to impose carousel.

I am a co-sponsor of TICA, which also seeks to make retaliatory duties more effective. Currently, such duties are deposited in Treasury general revenue accounts. TICA would segregate into a trust fund the retaliatory duties collected on EU goods carrying a 100% duty, which nevertheless come into the U.S. The Secretary of Agriculture would then release the money to a duly constituted U.S. Beef Industry promotion board, to promote U.S. Beef in foreign markets.

The U.S. Beef Industry's real goal here is not retaliation, but rather, re-access to the European Market. Retaliation is a just a means to that end. But, if there are duties collected beyond the 100% tariff placed on targeted EU products, the U.S. Beef Industry should have that money to lessen the harm caused by the EU ban. TICA is a good method to accomplish that goal as we continue to seek total removal of the ban.

The Subcommittee values your time, and appreciates your upcoming testimony. I am confident that we will make an excellent record this morning.

In regard to the record, Ambassador Guenter Burghardt, of The Delegation of the European Commission, was invited to testify today on behalf of the European Union. Ambassador Burghardt responded that EU policy barred his appearance before the U.S. Congress. However, the Ambassador requested that he be permitted to submit a written statement on the subject of COMPENSATION for inclusion in the record. Without objection, the Ambassador's written statement on compensation will be accepted and made part of the record.

Just a couple of Housekeeping Matters before I ask Senator Baucus for any opening remarks he may want to make. The Subcommittee asks that witnesses please limit oral testimony to 5 minutes. Your entire written statement will be included in the record.

Thank you. Senator Baucus?