SENATOR GRASSLEY: Thank you, Secretary Judge. Governor Vilsack, Secretary Glickman, Congressman Boswell, Congressman Smith, and distinguished legislators from the three states present here today. First of all, I want to say probably that Des Moines welcomes this event in a major agriculture producing state, and I thank Secretary Glickman and Ambassador Barshefsky for these hearings around the United States and particularly for including Des Moines, and, of course, to Secretary Judge for the hard work that she went through coordinating this effort.

Overall, of course, the American economy is doing well. It is the envy of the world. Wall Street is booming. Stock funds are awash with cash with record-breaking years for a lot of companies. And when you look at the economy as a whole, everything besides Wall Street, things are not as good as they are on Wall Street. In fact, in the nonfinancial economy, it is growing a lot less rapidly than it did even in the 1980s. And right here in Iowa, of course, the agricultural economy is a disaster for the last 18 months, and within the last month, the greatest of disasters. There is something, of course, that we can do about it. I want to suggest two things, and these are long-term, not to think in terms of just helping the immediate lack of productivity in agriculture, but connected very closely with the long-term productivity of agriculture. And one is the President's authority to negotiate trade agreements, and the second point I would make would be in regard to the Chinese trade agreement just negotiated.

First we have to restore the President's trade negotiating authority immediately, if not sooner. This authority allows the President, as you know, to negotiate an end to unfair trade barriers imposed by foreign governments so that more Iowa products can be sold. Iowa depends, of course, on trade. Last year Iowa exported $296 million worth of food. If existing trade barriers were reduced, we could sell lots more. Iowa's economy, particularly the agricultural producers, are the most efficient in the world, but they can't compete when protection of trade policies keep our goods out of lucrative foreign markets.

In less than five months we will ask 133 nations to follow our lead in liberalizing world trade at that Seattle WTO ministerial. But when the President sends his trade team to the bargaining table, the team will not be able to have the trade negotiating authority that they need in which it would encourage other countries of the 133 to sign binding agreements. Even though the new world trade talks are right around the corner, the President has not had that authority. Yes, other trade negotiations over the last 50 years have started without the President having this authority at the beginning of the talks and were successfully completed. But everyone seemed to know then that the negotiations would be approved and that the President would have the authority for final approval. We do not have the same assurances today. Efforts to win negotiating authority have failed twice already. We need one big additional push from the President to get this job done through the Congress. A third failed attempt would be a disaster for America's leadership in the world trade community.

It was our leadership that helped provide tariff reduction starting in 1947. It was our leadership that resulted in 45,000 tariff concessions affecting one-fifth of world trade in that very first round 50 years ago. And it was our leadership that increased the value of world exports from $50 billion in 1947 to $7 trillion today. But I'm sorry to say that for the first time since 1947, the U.S. leadership that produced these stunning results is in serious doubt as far as 133 countries that will sit across the table from us because Congress hasn't given this authority yet. Chile got tired of waiting for the President to have this authority, so it signed a favorable trade deal with Mexico and Canada. As a result, American firms have lost over $500 million per year of trade opportunities. And as Chile has signed free trade agreements with other nations but not with the United States, the increase in imports of U.S. products has slowed to 43 percent, the jump that we had in 1995.

So there is a price to be paid to U.S. workers and U.S. farmers when the United States is not at the table with the authority to sign agreements. In December of '94, President Clinton spoke very well about the need for such a free trade agreement for the entire western hemisphere, and such an agreement would also lower tariffs to the benefit of the United States. We have seen a 41 percent increase in Iowa's exports to Mexico just since NAFTA was signed. I hear a message that we ought to be at the table from ambassadors who come to my office frequently and a reluctance on their part to consider the United States serious about negotiating without the President having that authority. We have too much to negotiate for, and we have a lot to lose when we aren't represented there, and so I hope that we can get the votes in the Congress in the United States to do this.

I think the lessons are clear from this. The United States over the last 50 years has had an awful lot to say about free trade, and that is very important. But what we actually do about free trade is really crucial. We cannot hope to shape the world trade agenda without being a part of that at the table.

The second suggestion that I want to make to this conference is about the China agreement. Ambassador Barshefsky just negotiated an exceptionally good market access treaty with China. For Iowa's agricultural products it was, in fact, a home run. The deal would have dismantled most of the trade barriers that closed China's markets to Iowa farmers, especially to Iowa pork and soybean producers. For example, China's current 30 to 40 percent tariffs on pork and its arbitrary and unfair sanitary standards keep most Iowa pork from China. But under the terms of the market access deal negotiated by Ambassador Barshefsky, tariffs on pork would have been reduced to 12 percent. The rate would have been bound. It would never go higher, and the sanitary and phytosanitary standards would not be used as a trade barrier. Unfortunately, the reasons are hard to understand, but this was not accepted at the last minute and this was a mistake, and I hope that for the benefit of our trade aspects with China being one of two things. In or outside of the WTO and better inside the WTO, China is going to be either our most and best opportunity for trade and markets or it's going to be our biggest competitor. And China, with this agricultural agreement that it signed with us, indicates that they want to be a player and a fair and free trader as well.

So my advice is that we should, number one, give the President the authority to negotiate because there have been 24 agreements negotiated somewhere in the world that the United States was not at the table and our interests were not being looked out for. And the world is not going to stand by while the United States Congress decides should the President have the authority or not. And U.S. leadership has been successful in this 50 years, and it ought to continue in that way.

Secondly, this is a wonderful opportunity with China. I hope we do not lose it and can move ahead in that agreement. Thank you all very much for your participation.