Remarks Opening Ceremony, Sixth East-west Agricultural Forum Release No .0031.99 As Prepared for Delivery by Secretary of Agriculture Dan Glickman Opening Ceremony, Sixth East-west Agricultural Forum Berlin, Germany -- January 23, 1999 "It is an honor to address this forum and to be in this great city which has such an important place in the history of our 20th Century. I visited this city for the first time in 1965 as a college student. In those days, Berlin was a very different place. Today, this city is experiencing a renaissance as it reclaims its rightful position as a leading capital of Europe. "Europe is awash in change these days. The Euro is just one prominent sign of the depth of the integration underway ... as are the European Union's efforts to expand eastward. We in America want to see this integration go smoothly because we have a strong stake in a strong Europe. "Today, one out of every 12 U.S. factory workers has a job in one of the 4,000 European-owned businesses in the United States. Europe is our largest economic partner. Our bilateral trade is more than $400 billion a year, and our nations enjoy a healthy level of two-way trade in agriculture -- nearly $16 billion last year. We also engage in direct competition, so I appreciate this opportunity to talk about our mutual interest in global trade that is more free and fair. "Earlier this week, President Clinton gave his State of the Union address. This is his annual speech to the American people in which he lays out his vision for the coming year. It came as no surprise that trade featured prominently in his remarks. President Clinton called on the nations of the world to join together in a new round of global trade negotiations to tear down barriers, open markets and expand trade. He also added that, 'we must ensure that ordinary citizens in all countries actually benefit from trade.' "Nowhere do I believe this is more important than in agriculture. Farmers do some of the hardest, riskiest, most important work there is to be done. And, around the world today, they are bearing the brunt of the economic difficulties facing many countries. Their difficulties today should remind all of us how important a robust agricultural sector is to our quality of life. "How we deal with the challenges facing agriculture -- from low commodity prices to trade barriers -- will say a lot about the ability of the global economy to live up to its promise in the coming millenium. So as we gather for the final East-West forum of the 20th century, I hope that we recognize that ours is a moment for the history books -- a moment in which critical decisions soon will be made about the future of global commerce, and through it, the future of our world. "At the WTO Ministerial in Geneva this past May, President Clinton said: "No matter how much some might wish otherwise, trade liberalization and the technology revolution are not policy choices, they are facts. The challenge before us is to shape these forces in a way that will leave our economies stronger and allow our people to live better lives." "Responding to this challenge won't be an easy task ... there will likely be setbacks. But how we deal with the difficult moments, and whether or not we maintain our resolve, will ultimately decide our future. For it is not in the easy moments when the course of history is altered. It is in the moments of challenge and doubt. "To stay our course, we must respect the rules that we established; we must recognize that free and fair trade by definition must work both ways; and, we must continue to act on our fundamental, shared belief that we have far more to gain together than apart. "I believe that the interests of our nations and the world's are more aligned than ever before, as are the motivations behind our shared agendas. For example, Europe is struggling under the fiscal weight of its farm policies, just as the United States did for many years. You want to expand your union eastward, but the 'sticker shock' -- the cost of this expansion -- makes it difficult. "The U.S. faced a similar dilemma when we passed our farm policy reforms. Taxpayers wanted a smaller government and a balanced budget, and farm programs became a target. Farmers were also tired of the government micromanaging their lives, telling them what, when, where and how much to plant. So despite no trade obligation to do so, we put in place the Freedom to Farm Act which ended the practice of linking government payments to production, abolished production restraints, and put annual government support for agriculture on a declining course. Farmers were left with the prospect of more volatile markets and greater responsibility for managing their own risks. "When we passed these reforms, you might expect farmers would be up in arms. Instead, they largely cheered us on because they finally were free to plant what and how much they wanted. As one corn farmer put it, finally, we can farm the way our grandfathers knew we should. Quite frankly, their enthusiasm was made easier by the fact that market prices at the time the bill passed were, for many crops, the highest in years, and thus the seven year declining government payments, which were generated even in these good years, were a nice addition to the soaring market prices they received for their crops. I suppose some farmers figured that the good times would last indefinitely and so they were even more willing to give up the existing price support and supply management programs. "Of course, the problem with getting government completely out of the business of agriculture is that sometimes you have years like 1998 where farmers livelihoods were threatened by events far beyond their control like the weather and collapsing Asian economies. Coupled with two years of record world grain production, prices took a precipitous drop. "I understand that there has been some confusion created in the minds of some by the emergency assistance that was provided to American farmers in response to collapsing prices. The question has been raised as to whether it marked a reversal of course for U.S. farm policy. My answer is a strong "no." Our assistance to farmers was well within our WTO limits, and we deliberately avoided linking this aid to production, so as not to distort markets. This was temporary assistance to help our farmers through an extraordinary period of natural disasters accompanied by historic low prices. The United States has no intention of going back to the days of intrusive government programs or telling farmers what to plant. We have made the commitment to a market- based system for agriculture and we will stay with it. Improvements will be made along the way. This year we will concentrate our energies on fixing the risk-management program know as crop insurance so that producers can adequately protect themselves against natural disasters and world economic fluctuations. "If I can take my invitation here as begging the question: What advice do I have for Europeans considering farm policy reforms based on my own country's experience. I would say: Be open, be bold. There is an old saying: one cannot cross a chasm in two small leaps. Now is the time for nations to make a giant leap toward a 21st century global marketplace. Agenda 2000 marks an important step. Of course, my country would like to see its reach be even more ambitious -- particularly in reducing export subsidies and severing the link between payments and production. The more market orientation Agenda 2000 brings to Europe, the better it will serve Europe and the world because the key to restoring farm incomes is not maintaining trade barriers, but creating productive, competitive farm sectors with access to foreign markets. Your experience with initial CAP reforms earlier this decade should prove that point. "I understand the pressures here to resist reform. We have them in America, as well. I remember when President Clinton first took office. He pursued an economic policy from a balanced budget to more open trade that drew early criticism and put his presidency at great risk. But six years later, my country has the largest peacetime economic expansion underway in our history, the lowest unemployment, the lowest interest rates, the highest home ownership and a budget surplus projected for many years to come. Europe agriculture can enjoy these fruits, as well, but only if it moves toward them creatively, deliberately, based on market economics and an embrace of modern technology. "I also recognize the great value that Europe places on its rural sector its current structure and its role in shaping your culture and in maintaining your rural communities. In each of our countries we want to give our farmers the opportunity to stay on the farm, and we want our small towns and villages to remain vital and vibrant. We want to preserve the character of our prime farmland as well. For some reason many Europeans have a false impression that the U.S. is based on a model of industrial farms and large-scale operations. Nothing can be further from the truth. In a country as diverse as the United States, we have farms of all sizes and character and I want to see them thrive. I think some of you might be even surprised by the number of small farms in the U.S. and the growing interest in farmers' markets and organic agriculture and other opportunities for consumers to purchase directly from farmers. The challenge for all of us is to find a way to keep our farmers on the farm that allows markets to work and trade channels to stay open. "Later this year, we will have a critical opportunity to move further down this path with the opening of the World Trade Organization negotiations in November in the United States. Our countries have a shared interest in further trade reform because we are strong exporting nations whose future economic growth depends on seeking out opportunities beyond our borders. Working together we can do that. "The United States will be very aggressive in these talks. We intend to take an active role in establishing the agenda, scope, content, and timetables of the negotiations. We want broader market access, the elimination of export subsidies, more reforms in domestic supports, disciplines on state trading enterprises, and a strong, science-based embrace of new technologies. "The United States would welcome Europe as an ally in these efforts. But these advances -- advances that would benefit all of our nations -- can only come from a foundation of respect for the trading system we now have in place. That's why our current differences with the EU over bananas and beef hormones are so crucial. Both these cases raise a fundamental question: Are we going to live by the rules-based system that we agreed to under the Uruguay round, and which today is the foundation of our world trading system? "In both cases and in both appeals, the WTO ruled in favor of the United States. In the case of bananas, we disagree as to whether the EU has taken sufficient steps to comply with the WTO decision. But in the beef hormone case, I must say that I am increasingly concerned because the EU shows no visible signs of taking even the first steps to come into compliance -- to remove the ban -- and yet the May 13 deadline for compliance is fast approaching. Let me be clear, the WTO said that eh EU has 15 months to comply -- not to do still more risk assessments, but to comply and lift the ban. And if we are to avoid another direct confrontation as in the banana case, then the EU must demonstrate some substantial movement on this issue, and soon. "I also am concerned about the pace and ad hoc nature of the EU's approval process for biotech products. In the coming century, we expect to see explosive population growth and little expansion of arable acreage. This is why scientists around the world are racing to develop higher-yielding crops that are more nutritious, require fewer pesticides and less water, and can endure harsh weather. Science is increasingly central to world food security, and biotechnology offers one of the most promising tools for feeding a growing world without wrecking the environment. "We should consider these advances seriously and with an open mind. I know that many in Europe are wary of these new technologies. I value healthy skepticism. You won't find a more zealous advocate than me for the rigorous testing of new products be they bio-engineered or not. And our regulators must maintain an independent and arms-length relationship with the sponsors of these technologies. But as these products prove safe, using an independent and objective eye, we must use their immense potential to wage world war against hunger and for a sustainable future. "There is an old saying: 'the gem cannot be polished without friction; nor man perfected without trials.' The same can be said about what our folks in agriculture are going through right now with the weak prices and exports. And, the same can be said about the frictions we face in our trading relationships. Trials aren't fun. But they teach us a great deal about who we are and what we stand for and how determined we are to reach our goals. It is true that the United States and the European Union have our share of trade frictions. But we should not let a slip on a banana peel cause us to lose sight of the fact that our nations have a long history of overcoming obstacles, accommodating each other's concerns, and negotiating solutions to our benefit and the world's. "We must continue in this proud tradition. We have much in common. Our economies are strong, we are both dependent on trade, we share major political objectives -- in short, our futures are inextricably linked. Only by overcoming our differences can we leave a legacy befitting future generations in America, in Germany, in Europe and around the world -- a legacy of peace, of plenty and of prosperity. Thank you. #