Good afternoon. Today's hearing marks the first in a series of hearings that I plan for this Subcommittee to examine trade issues affecting the commodities under our jurisdiction. Specifically, our purpose this afternoon is to inquire as to the current status, and future prospects, for trade between the United States and the European Union (EU) in the area of livestock, dairy and poultry products.

It should be noted that there are currently a number of trade disputes between the US and the EU, many of which involve livestock, dairy and poultry matters. However, the disputes between the US and the EU involve more than just those issues. They include commodities across the board such as wine, canned peaches, rice, and wheat gluten; the implementation of the Uruguay Round grain tariff commitments, and reduction of export subsidies to name a few. It is unfortunate that two trading partners, and competitors, have such significant problems since agricultural trade between the US and the EU is estimated to exceed $15 billion this year.

It would be difficult to over-estimate the importance of these matters to America's meat and dairy producers. With a stable American population, and only a modest growth projected in the domestic demand for these items, the export market remains the only real path to increasing American farm income. World population is now growing faster than ever - and these people will need to be fed. At the same time, rising income levels in Eastern Europe, Asia and Latin America mean more money available for food, and increasing desire for Western cuisine - including an appetite for meat and dairy products. Currently, exports account for 30 percent of US farm cash receipts. This clearly demonstrates the critical importance of opening, maintaining and expanding US agricultural markets. I agree with Secretary Glickman when he says that "exports are the ultimate safety net for US agriculture."

Few would dispute that the United States is the world's most competitive producer of food and fiber in the world. However, our competitiveness is continually jeopardized by the high levels of import protection -- and export assistance -- foreign nations offer to their producers. While American farmers, ranchers and dairymen can compete and win against any in the world, they are too often pitted against foreign governments - not foreign producers.

Too often the term "trading partner" rings hollow when its clear to all involved that "trading adversary" would be a far more fitting description of the nature of our relationship with some countries in certain markets.

Equity, fairness, and the use of sound science, need to be the hallmarks of our trade policy. If they are not, then protectionism, stalemate, and stagnation are not far behind. That is why I am committed to opposing the EU's ban on beef raised using hormones. Scientific study after scientific study has shown this to be completely safe -- and I would predict that, if science is the basis -- the WTO will soon rule in favor of the United States and sound science.

I am glad to see that, after nearly three years of difficult negotiations, we have just concluded an agreement on veterinary equivalence with the EU, and I commend Paul Drazek and his team for their diligence and their accomplishments. This agreement provides an overall framework for recognizing as equivalent the veterinary inspection systems of the United States and the EU. It covers more that $1.5 billion in US animal products exported to the EU, and approximately the same amount in European exports to this country. Hopefully, this agreement will lead to enhanced and expanded trading opportunities for our red meat industry, and will preserve our existing trade in egg and dairy products as well as pet food.

It is very unfortunate that there were some issues left unresolved, specifically with regard to poultry processing standards. This places at risk nearly $55 million in American poultry exports to the EU. As unacceptable as this situation is, however, it would have been worse still for the United States to have endorsed an agreement based not on sound science, but on political science. I would hope that an agreement on poultry can be reached - and I'm certain that one should be. It is in everyone's interest, especially European consumers, that this be worked out.

As this Subcommittee works to maintain and expand our trading markets, the mandates of fairness and equity require me to try to ensure that America's producers have at their disposal the tools needed to effectively compete in the international trading arena. Programs such as the Dairy Export Incentive Program (DEIP), the Export Enhancement Program (EEP), and the Market Access Program (MAP) do not exist in a vacuum As their names suggest, these programs were designed to help American farmers take advantage of trading opportunities. These programs exist because of the overly generous levels of support enjoyed by European farmers. American agriculture should not be asked to unilaterally disarm in the arena of aggressive international trade.

I look forward to today's testimony, and I welcome all of our witnesses and guests here.