In 1998 a total of 28.9 million head of hogs were slaughtered in Iowa which includes 25.7 million marketed in Iowa and an additional 3.2 million imported into Iowa for slaughter. Iowa produces nearly a quarter of the U.S. pork. According to a recent Iowa State University study, the U.S. pork industries supports an estimated 600,000 domestic jobs and generates more than $64 billion in total economic activity. When one considers pork production globally, Iowa has a natural competitive advantage for livestock production. Due to the large quantity of high quality, highly productive farmland, Iowa has an abundant source of feed for livestock. We can use natural fertilizer produced by our livestock to reduce the amount of commercial fertilizer needed for our crops. Other major exporting countries are not as fortunate. In many cases they're experiencing environmental challenges and other issues that drive up their cost of production.

The U.S. pork industry is benefitting from the Uruguay Round Agreement. Since 1995 when the Uruguay Round Agreement went into effect, U.S. pork exports to the world have increased by approximately 86 percent in volume and 80 percent in value terms from '94 levels. While the U.S. pork industry's recent export performance is impressive, it remains severely limited by factors, such as the lack of access to many of the world's pork markets and the unfair subsidies provided to many of our competitors.

The Iowa Pork Producers Association strongly supports further trade liberalization measures. Mr. Secretary, you yourself have stated the importance of exports to American agriculture. American farmers already produce an abundance far in excess of domestic needs while global food demand is increasing.

Even with the significant progress made in the Uruguay Round, tariffs on agriculture products remain very high. The accelerated reduction of tariffs is a pork industry priority in the upcoming trade round. U.S. agricultural tariffs that average 5 percent are dwarfed by the tariffs of other nations that average as much as 50 percent. A date needs to be set by which all tariffs will be zero.

As a result of the Uruguay Round, subsidies on agricultural exports were reduced both in terms of quantity and government expenditures on a product-specific basis. While significant progress was made in the Uruguay Round, export subsidies remain a major problem for U.S. agriculture. The elimination of all export subsidies is a top priority for the pork industry. Export subsidies transfer market share away from U.S. pork producers, the world's lowest-cost producers of pork, and give it to the European Union and other less-efficient pork producers.

U.S. pork producers recognize the complexities of agricultural politics and acknowledge that farm programs often are designed to meet social as well as economic objectives. It is essential for the next trade round to accomplish much stricter disciplines on trade-distorting domestic support programs than was possible in the Uruguay Round. The aggregation of commodities for purposes of measuring reduction commitments should be replaced by an agreement that each commodity be negotiated on its own terms. All trade-distorting domestic supports should be eliminated.

The Uruguay Round Agreement on sanitary and phytosanitary measures requires import measures intended to protect public health or to control plant and animal diseases to be based on science. Enforcement of the strict science-based trading rules established in the Agreement is critical. The pork industry does not support opening the sanitary and phytosanitary agreement for further negotiation in the next trade round.

When considering country priorities for the upcoming negotiations, the Iowa Pork Producers would recommend focusing on Japan and the EU. Greater access to the Japanese pork market could provide a much-needed boost to the U.S. pork industry. The elimination of pork subsidies and unfair trade practices by the European Union are needed.

The EU pork market has basically been closed to the U.S. pork industry for over ten years as the result of the EU's Third Country Meat Directive. If U.S. pork cannot be marketed in the EU, the EU pork should not be marketed in the U.S. A strong response to the EU's treatment of U.S. pork exports is long overdue. Pork should represent all or the vast majority of the final retaliation list in the USTR's action in the beef hormone matter.

When one considers the current market of the commodities being produced here in Iowa and the surrounding states, the upcoming round of WTO negotiations is extremely important. I'd like to thank Secretary Judge and the other organizers of this session for giving me the opportunity to speak this morning.