ASSISTANT U.S. TRADE REPRESENTATIVE MURPHY: A question here. I don't think I heard from any of the panelists any comments about biotechnology. And we'd be interested to know if any of you see or when you may see bioengineering coming to grape production or even wine production? Obviously, biotechnology is a problem and issue. And we're aware of it in certain sectors and just want to make sure that you're staying on top of where it is and where it's moving. And so if you can give us any indication of the coming of bioengineering into the industry, that can be useful.

MR. LANGE: Yes, I see the coming when we have a lot of good benefits from biotechnology. But the bottom line for us here today and for the next few years is just quite simply the tariff issue that faces us.

I'm the beginning of the chain. I grow the wine grapes. Joe's on the other end of the chain, he produces the wine. If he doesn't sell the wine, I don't sell my wine grapes. We feel if we can get a reduction in these tariffs and these trade barriers that prevent us from going into other markets, we can get an even playing field, we can compete on a quality basis and we will increase our exports. But I do see that coming, yes.

AMBASSADOR BAAS: Mr. Lange, if I could just ask a question on the labeling issue. I understand the problem labeling on our exports, where countries don't accept what we say on our labels and there are all sorts of problems there. But what was the problem you were, I think, referring to, in terms of imports into the United States, labeling. Are people putting on their labeling -- on the label as Cabernet when it's not or is it --

MR. LANGE: Emerging countries who are developing wine producing industry, just a new one, they will take a look at the market and they'll see the hottest variety or the hottest wine that's there. And the potential is there to say if they don't have, let's say Merlot, which has been a real hot item, if they don't have Merlot, they have something that looks very much like Merlot, it goes into the bottle and it's called Merlot.

And so all we're asking for is provisions to be made so that when we have a product come into the United States and the label says that it is Merlot, that, indeed, it is Merlot and it's coming from the origin or from the area that they're calling for.

So that's our only concern. We're not concerned about them bringing it in. We just want to make sure that it's what they're telling us it is.

AMBASSADOR BAAS: Aren't there already procedures with the U.S. Customs Service, where one can say that an import coming in, which is advertised as Merlot is not, in fact, Merlot, it's a Blanc.

MR. LANGE: I'm not an expert, but what I can tell you on the layman's side of the coin is many times it's very difficult to prove that Merlot is the one that's in the bottle, scientifically, once it's here. And then many times it means that the Customs or the State Department has to go to a country and say wait a minute, you don't have Merlot there, how can you call this Merlot, and that doesn't work very well.

AMBASSADOR BAAS: It takes time, that's for sure.

If I could just say one more thing on the SPS agreement. Ms. Nave, I think we certainly agree with you of the importance of keeping it science-based. And we've been doing a lot in that effort right now. In fact, there's a Commission on the SPS going on in Rome, speaking of wine. And we've been putting a lot of effort into trying to keep that scientifically based. It's not easy, I must say.

You won't be surprised to hear that the European Union particularly is making great efforts to undermine that, having lost some considerations recently like beef hormones and so on. And we are working hard on that and we do appreciate that. And it's good to hear.

MS. NAVE: Well, and we appreciate the fact that you're working hard on it, because it matters a lot.

USDA DEPUTY SECRETARY ROMINGER: We understand your concerns about the tariffs that you're up against in exporting product, but we also want to compliment the industry on the increased exports that we have taking place that goes -- we're counting here. I think that's been remarkable the way we've been able to increase the exports of California wine, and you folks from other states as well, but mostly California.

There evidently must be a few optimists still around, because we're sure planting a lot of grapes these days. But we're going to keep working to get those barriers down around the world, because we do have a product that a lot of people appreciate if we could get it there.

MR. LANGE: Thank you.