Ken Kaplan.

MR. KAPLAN: Well, my name is Ken Kaplan. I'm a farmer. I've been growing pistachios for 30 years and farming for that amount of time in California. And I represent California pistachios, Arizona and New Mexico pistachios.

My testimony will be brief and will cover the following subjects, reduction of tariffs, elimination of trade-distorting domestic support and elimination of all export subsidies and mislabeling of exports.

In general, our industry supports many of the goals already announced by the Administration, a three-year round, elimination of export subsidies and non-tariff barriers and a reduction of tariffs.

An important trade obstacle facing our industry are tariffs on raw and value-added pistachios. Though very few countries in the world produce and export pistachios, mainly the United States and Iran, many countries, nonetheless, have high tariffs. India's tariff on raw pistachios is 45.6 percent and South Korea and some of the Asian countries have tariffs in excess of 50 percent.

While the United States pistachio tariffs on raw and roasted are minimal, the U.S. tariff on roasted pistachios is free for GSP and other countries with special treatment and only one percent per kilogram for other countries. The U.S. pistachio exporters face much stiffer duties in some of our leading markets. For example, in Europe the tariff for roasted pistachios is 12 percent and it will be reduced to only 10.2 percent by the year 2001.

The industry is also concerned over subsidies which the European Union, the EU, has made available for their local nut industries. In 1999, for example, the EU provided its nut producers over $110 million. Subsidies of this size encourage production and provide yet another obstacle for the U.S. industry, which receive no government support.

This subsidy has actually increased since the Uruguay Round, the multi-lateral round that was to eliminate exports and domestic subsidies. We urge complete elimination of this trade distorting subsidy in the new trade round.

Finally, the industry wishes to comment on mislabeling of products in our export markets. Our industry is currently aware of situations in China, Germany and Israel where consumer packages of pistachios have been found to be labeled as U.S. pistachios's but actually have Iranian nuts in them.

As I am sure you know, over the last year, the EU halted imports of Iranian pistachios and Israel began inspecting Iranian pistachios because of excess levels of aflatoxin. Our industry is very concerned that Iranian pistachios containing aflatoxin, but labeled as a U.S. product, could be chosen for testing. When this sample would test positive for aflatoxin, it would have a devastating impact on the exports of that country and to our industry as a whole.

While we do not know the extent of the problem, our industry, nonetheless, is very concerned that the mislabeling may undue the progress which we have made in developing overseas markets.

Since we are entering a new multi-lateral trade round, we urge the Government to take the lead and negotiate a country of origin agreement for the purpose of eliminating country of origin marking fraud.

I want to thank you very much for your time.