Statement of the Hon. Gil Gutknecht, a Representative in Congress from the State of Minnesota

Testimony Before the Subcommittee on Trade
of the House Committee on Ways and Means

Field Hearing in Bloomington, Minnesota, on the
Benefits of Trade to the Medical Technology and Agriculture Sectors

May 14, 2001

Thanks to Subcommittee Chairman Crane for holding this hearing and giving me the opportunity to testify.

Thank you for inviting such a distinguished panel, particularly my constituent Karl Johnson.

The purpose of this hearing is to discuss the importance of trade and, ultimately I suppose, underscore how important it is for Congress to grant President Bush Trade Promotion Authority. But, as I believe you=ve heard and will hear from your distinguished witnesses, that we must grant the President Trade Promotion Authority, is a foregone conclusion. It is not simply a desire, or a wish, it is an imperative.

Let=s think about the facts, as I=m sure you=ve heard, the European Union subsidizes its farmers at a level eight times greater than the United States provides to our farmers. This works out to $342 dollars per acre in the European Union and only $43 dollars per acre in the United States. And, Europe is one of many examples of this problem.

So, how is this situation ever going to change? Do we suppose the EU and others will, out of a sudden sense of fair play, decide to just voluntarily and unilaterally level the playing field? Of course not. They are not going to change the way they do business until the United States calls them out on the rug. But, we can=t do that unless we have a seat at the trade table. And, we can=t do that unless we grant the President Trade Promotion Authority.

In short, Trade Promotion Authority is imperative because without it, things are not going to change. The status quo, with all its inequities, is locked in place and my farmers and Minnesota lose.

Of course, some might say there are alternatives. Some say if foreign governments want to subsidize their farmers to the point where U.S. farmers can=t possibly compete, Agreat, consumers win.@ But the illogic in this argument is glaring. First, we don=t accept predatory pricing from within our borders, so why should we accept predatory pricing from foreign countries waged against our own farmers? Second, the inherent danger of over-reliance on foreign supplies should be painfully obvious as we approach $2 for a gallon of gas. A safe, abundant, and affordable domestic supply of food and fiber is a matter of national security.

Still others argue that we should isolate ourselves and resurrect old protectionist policies. But before we allow Washington bureaucrats to start managing supply, or let the latter-day Elmer Gantrys to blow the dust off the Hawley-Smoot Tariff Act, we need to think about the irreparable harm this would do to our farmers, Minnesota, and all of America.

If past is prologue, mandating set-asides will have the same adverse effect on America=s farmers as our failed sanctions policy, as the Soviet grain embargo has had. This policy will invite increased foreign production in places like Brazil. And, this increased foreign production will quickly offset any temporary increase in prices that a short U.S. supply might bring. Then U.S. farmers are left holding the bag of lower prices and less market share. And we all know the price of protectionism. Hawley-Smoot levied the highest tariffs ever. These tariffs, in turn, invited foreign retaliation against the United States. World trade went in the tank and America sank deeper into the Great Depression.

Minnesota farmers know that these are not the answers and that is why this distinguished group of agriculture leaders sits behind me today.

So, Minnesota farmers and Minnesota need Trade Promotion Authority. But, I want to be clear: I will not blithely support agreements at any costs. I do not support trade for trade=s sake. So, these trade agreements must be negotiated with U.S. agriculture in mind. They must be enforceable. And, to keep my support, they must be enforced. I have had enough with the EU B riddled with BSE and Hoof and Mouth disease problems B rejecting U.S. beef on trumped up charges and in blatant defiance of our trade agreements. I=ve had enough of foreign competitors skirting our trade rules and using loopholes to ship molasses into the United States, and converting it into sugar, shipping in concentrated milk proteins, and using them in dairy products, and the ongoing problem of the Canadian Wheat Board that, with each passing day, looks more like a bunch of commissars. These shenanigans erode public trust in trade. And so, as believers in trade, we must put a stop to them.

Fortunately, I believe that President Bush, rooted in farm and ranch country, will negotiate agreements that create the kind of access to world markets that my farmers need to get a fair return on their products, and that he has the resolve to hold our trading partners proverbial feet to the fire to see to it they honor those agreements.

We=ve seen four very tough years in farm country. But Minnesotans, today and throughout our heritage and history, have shown that we are cut from a tougher piece of cloth, We always see the light at the end of the tunnel.

Mr. Chairman, I am optimistic that through value-added agriculture, the tax relief we are currently working on, the crop insurance bill we passed last year, the strengthened federal farm policy we are working on this year, and the increased access to the world market that we are embarking on today B the light at the end of this tunnel is going to get brighter and brighter.

Once again, thank you for allowing me to testify today.