MR. PAULI: Thank you, Mr. Chairman. The California Farm Bureau Federation appreciates the opportunity to be present today and to make our various comments. My name is Bill Pauli. I'm president of the California Farm Bureau and I'm a wine, grape and pear farmer from Mendocino County.

Agriculture is one of the few U.S. industries that consistently runs a trade surplus, posting a positive balance of trade every year since 1960. The U.S. along with agriculture must be at the negotiating table in the next WTO round in a meaningful way with trade negotiating authority to ensure that the trade surplus continues.

Despite significant progress in opening U.S. markets, world agriculture remains one of the most protected and subsidized sectors of the world economy. U.S. agricultural producers are placed at a competitive disadvantage due to the growing number of regional trade agreements among our competitors.

Chile, a major exporter of fresh produce to the United States, has virtually unlimited access to our markets. On the other hand, California producers face an 11 percent tariff when exporting to Chile. This tariff is not realized by our Canadian and Mexican competitors due to the regional trade agreements. California farmers are severely disadvantaged because of our nation's inability to foster new trade agreements like the one between Canada, Mexico and Chile.

U.S. leadership of the global trade liberalization agenda has paid off for American agriculture and most California farmers. If the United States now leaves it to others to form new trade pacts and write future rules for trade, U.S. farmers, processors and exporters will be severely disadvantaged. We're counting on this administration and the Congress to ensure that California farmers and ranchers have a significant place at the negotiating table. Agriculture needs your commitment to not only develop strong agreements but to enforce these agreements as written to ensure that fair trade is as much of a reality as free trade.

The objectives of the next round. First, we believe the new negotiations must include a recommitment to binding agreements to resolve sanitary and phytosanitary issues based on scientific principles in accordance with the WTO agreement o sanitary and phytosanitary measures.

Second, the next round should result in tariff equalization and increased market access by requiring U.S. trade partners to eliminate tariff barriers with specific time frames. Agriculture tariffs worldwide average about 50 percent where U.S. tariffs average about five percent.

Our producers compete openly in domestic markets with foreign competitors, but are shut out of export markets due to prohibitively high tariffs.

Finally, we continue to ask that an equitable dispute resolution process be established for perishable agricultural products. This process should consider pricing, cost reduction and import surges, with triggers established through historical market access that would automatically begin a U.S. investigation. This is extremely crucial for California minor crops, many of which have neither the resources nor the number of farmers necessary to instigate government action.

As stated earlier, California agriculture, as a whole, has been very successful competing in the market. We plan to continue this success well into the future, but we cannot do it alone. We will continue to support liberalization in global agricultural markets that result in true reform of the current trading regime and bring about fair trade for our farmers.

While we in agriculture will do our part, we expect our government to do its part in expanding not only free trade but fair trade.

Thank you.