Good morning. Today's hearing is the second in series of hearings planned for this Subcommittee to examine trade issues affecting the commodities under our jurisdiction. Specifically, our purpose this morning is to inquire as to the current status, and future prospects, for trade between the United States and East Asia in the area of livestock, dairy and poultry products.

As Members of Congress grapple with policy decisions ranging from MFN for China, to so-called "Fast Track" authorization, to increased membership in the World Trade Organization, hearings such as this are designed to detail where we stand today, and to highlight paths for progress tomorrow.

East Asia presents the United States with unparalleled opportunities, as well as obstacles, in the arena of agricultural trade. Last year, total U.S. agricultural exports to East Asia reached a record $24.4 billion. This figure accounts for an impressive 42 percent of all U.S. agricultural exports. At the same time, this country purchased $5 billion in agriculture from East Asia, or about 15 percent of all agricultural imports. The four most important countries for U.S. farm exports are in East Asia -- Japan, South Korea, Taiwan, and China.

Perhaps even more important than those impressive statistics is that America's exports to East Asia have been steadily increasing at a rapid rate, creating a healthy trade surplus for this country. America's agricultural trade surplus alone would cover every Honda, Toyota, or any other car imported to the United States from Asia last year - with an additional $7 billion to spare.

It would be difficult to over-estimate the importance of this market to America's meat and dairy producers. With a stable American population, and only a modest growth projected in the domestic demand for livestock, dairy, and poultry items, the export market remains the only significant path to increasing this sector of American farm income. The population of East Asia, which is already large, is forecasted to continue to rise, and these people will need to be fed. At the same time, rising income levels in East Asia, as well as a newly emerging middle class, means more money available for food, and an increasing desire for Western cuisine - including an appetite for meat and dairy products. With meat and poultry consumption forcasted to remain steady for most of the world, Asia is expected to fuel the global meat imports.

With the current exception of Japan, the economies of East Asian nations are among the fastest growing in the world, and often times they are also some of the most protectionist. There are profound cultural differences affecting American trade with East Asia which must be clearly addressed. One of the reasons that trade in food is often so contentious is because such issues cut to the heart of very basic, national questions such as how a nation feeds its people. Some of these nation's are preoccupied with self-sufficiency, a notion which can often restrain trade.

In the area of agricultural trade with East Asia, some of the biggest obstacles take the form of "technical barriers", including sanitary and phytosanitary measures. USDA estimates that close to half of the $5 billion lost in agricultural trade due to "technical barriers" last year, was lost in East Asia.. These kinds of barriers must diligently addressed, and eventually removed, through the use of sound science.

As this Subcommittee works to maintain and expand our trading markets, I hope to ensure that America's producers have at their disposal the tools, such as the Dairy Export Incentive Program (DEIP), the Export Enhancement Program (EEP), and the Market Access Program (MAP), needed to effectively compete in the international trading arena.

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