Mr. Hempel.

MR. HEMPEL: Thank you, Mr. Secretary and members and thanks to Secretary Glickman and Trade Representative Barshefsky for holding these hearings. I'm Jasper Hempel. I'm the senior vice president for government and legal affairs for Western Growers Association, which is an agricultural trade association representing farmers, growers, packers and shippers of fresh fruits and vegetables and nuts in California and Arizona.

Our members produce and ship over 50 percent of the fresh fruits, vegetables and nuts consumed in the United States. We have previously submitted a written statement to you. And in that written statement, we've identified our top ten goals for the upcoming trade negotiations. I strongly encourage you to review that and to make that as part of the record of this proceeding.

In my verbal comments, I want to focus on two issues which are critically important to us and then I will briefly describe in one sentence the other goals.

The first priority goal that we have is the elimination of the European Union's domestic support and export subsidy. Our fruit and vegetable growers supported the Uruguay Round negotiations because we thought these subsidies would be eliminated. However, today the EU is shifting its subsidies in many sectors and even providing new subsidies to various crops. Let me give you a few examples.

Our sources in Europe inform us that this year there is a $2 billion subsidy to the fruit and vegetable sector, which includes $55 million in export refunds, a new $2 billion subsidy for rural development for fruits and vegetables and an Improvement Fund of $1.5 billion for fruits and vegetables. This is over $5.5 billion per year, plus billions in subsidies for the EU olive and wine industries.

This insidious subsidization must stop. And I ask you how does our federal government expect us in the United States to effectively compete with these aggressive EU subsidies in place. And I was very delighted to hear that you have looked at this as a priority for yourselves.

The U.S. fruit, vegetable and nut sectors are competitive, but it's grossly unfair for our growers to have to continue to combat competitors with such strong government intervention. We request that you make this your top priority as you begin your trade negotiations in this new round.

The second item I want to focus on is we support the full transparency in WTO operations and in WTO member country reports on domestic and export subsidy programs. Since the Uruguay Round did not require reporting of subsidies on individual crops, it is impossible for us to get specific information on EU support to individual fruits and vegetables unless there is a specific line item in the EU budget.

For example, if our broccoli industry wants to know the subsidy that your pea and broccoli producers get, this information simply isn't available to us. And we are asking ourselves how can we invest in the future if we don't know what subsidies our competitors are reaping. We believe that this type of information should be made available prior to the start of new negotiations and that the new trade round should include requirements for governments to provide more specificity in reporting their level of subsidies to individual crops.

Our other top ten items are in our written statement.

Thank you.