MR. EASTER: Thank you very much. On behalf of Blue Diamond growers and our nearly 4,000 farmers here in California, we welcome you to California and thank you for this opportunity to meet with you as we prepare for this next round of negotiations.

As has been said, I'm Steven Easter representing Blue Diamond and I've represented almond growers for over 30 years in trade issues and trade negotiations and been fortunate to be involved in both the Tokyo and Uruguay Rounds.

I'd like to start my testimony with a few comments about the almond industry. I'm really summarizing my statement that I've given you all for the record. But I'd like to reiterate that almonds are California's leading food export and its largest tree crop. It's among the top ten U.S. food exports for the last several years. And California almonds make up 70 percent of the world's supply. And all of the commercial production of California almonds -- U.S. almonds is here in California.

In 1996, we first exceeded $1 billion in export value in almonds on a worldwide basis. And we see the potential for substantial increases beyond that, as we predict that there will be at least a 20 percent increase in production over the next five years.

The key issue for almond growers in this upcoming negotiations are tariff issues. We believe that the tariff levels this round need to be given careful attention and are important to the commercial success of the almond industry. We think that they really are the key to providing more of this highly nutritious commodity to the world consumers.

And I think under tariffs there's three areas that we ought to concentrate on. First, is the area of very high tariffs that exist in certain commodities worldwide. Naturally, we don't have to be too concerned about things like coffee that we don't produce, but everything that we produce in the United States we should look at.

A good example of this is the almond industry, which is really our key issue and that is the tariffs in India. We need a dramatic reduction in those tariffs which are currently, at today's price levels, about 100 percent. So this is one of the highest tariffs for our products that exist, and still we're the leading U.S. export to India. We think, though, that there's a chance to double or triple that export with lower tariffs.

The next area I think is an area you might call minimal or nuisance tariffs, such as exists in the EU, there's a three and a half percent tariff there. And we have seen over the years, in past negotiations, an effort to reduce, or, excuse me, I should say eliminate, all tariffs below five percent. We think that should be pursued, which would eliminate a duty like the three and a half percent in the EU. It would also eliminate the Japanese duty on almonds. And so this should be an objective of the United States.

And then, finally, I think the area that could be of most help to almonds would be the idea that's been proposed of zero duties on certain commodities. We believe that the almond industry is ripe for this worldwide and that a zero worldwide duty for all almonds shelled, unshelled or processed or unprocessed could be accomplished and would be appropriate in this negotiating round.

We don't think that the producing countries would be hurt because most producing countries, other than the United States, are importing almonds as it is. So we believe that this would be a very viable approach to the almond industry's situation for these coming negotiations.

There are some other areas that I've addressed in the submission having to do with high tariffs and places like Korea, but I'll leave that to your reading.

Thank you very much.