MR. RUE: Good afternoon. My name is Michael Rue. I certainly appreciate you all spending the time to listen to our concerns today. I'm a rice producer from Marysville, California, a Director of Farmers Rice Cooperative, the largest marketing organization in the State for rice, and Chairman of the USA Rice Federation's International Trade Policy Committee.

Improving trade and trade policy is critical to U.S. Agriculture and especially to the rice industry. Over 40 percent of U.S. rice is exported. California exports 45 percent of its production each year. NAFTA, for example, has allowed the southern U.S. rice industry to expand sales of rice into Mexico, which now is the leading export market for U.S. rice. The GATT has given California growers minimum access to Japan, which is now this state's leading rice export market. Without the current trade policies, neither of these markets would be certainly as attractive.

The rice industry supports the complete removal of agricultural trade sanctions. Experience over time has shown that these sanctions, unless universally supported by our trading partners, to be an ineffective tool of foreign policy. Whatever the benefits of sanctions, when not universally supported, are far outweighed by the disproportionate cost to those industries and countries that are directly impacted.

Cuba, Iran, and Iraq were all, at the time sanctions were imposed, the leading commercial customers for the U.S. rice industry. And, indeed, each of these countries will be attractive markets if and when sanctions are lifted.

We support the elimination of State trading enterprises or certainly the adoption of disciplines that would ensure operational transparency, the end of discriminatory pricing practices by them and the development of a scheme that would have competition for these enterprises. They are market distorting and make our products non-competitive and restrict the free flow of goods to the consumers that we wish to serve.

We support the elimination of export subsidies and the tightening of rules governing these subsidies. We, as other segments of agriculture today, need a level playing field. We support the acceleration of the reduction of tariffs with the ultimate objective of eliminating all preferential tariffs.

In Mexico for example, Uruguayan suppliers enjoy duty-free access to the Mexican rice market because of bilateral trade agreements, while U.S. suppliers are at a disadvantage, because we're subject to tariffs even in spite of NAFTA.

All phytosanitary requirements should be science based and reasonable. You've heard that many times today. Maintaining sound science and risk assessment, as the foundation of sanitary and phytosanitary measures is extremely important.

Genetically modified organisms should be subject to those same concerns. If we keep the -- we've had several questions on the GMO products. If we keep the regulations science based and commercially reasonable, we'll let the consumer determine that which they want to consume. And it's important that we keep the regulations and restrictions based on science and good sense and we'll let the consumers decide what they want. If they decide they want to consume those products, that's fine. But let's not withdraw that choice before they have the opportunity to see it on their plate.

Finally, in the instance where a market is only partially opened, we believe that whatever minimum requirement is established by a trade agreement, that commodity must be purchased from a member of the WTO, not from a non-member country that is not a signatory, in order to meet that requirement.

Some countries have purchased outside the WTO communities such as Japan buying Chinese rice, thus negating any benefits to the participating WTO members.

Thank you very much.