Transcript of Tele-News Conference with Agriculture Secretary Mike Johanns, Ambassador Allen Johnson and Under Secretary for Farm and Foreign Agricultural Services J.B. Penn Regarding the Dominican Republic/Central American Free Trade Agreement - Washington D.C. | USDA Newsroom
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Agriculture Secretary Mike Johanns (center) Under Secretary for Farm and Foreign Agricultural Services J. B. Penn (left) and Chief U. S. Agriculture Negotiator Allen F. Johnson hold a tele-news conference on March 28, 2005 Release No. 0108.05
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Agriculture Secretary Mike Johanns (center) Under Secretary for Farm and Foreign Agricultural Services J. B. Penn (left) and Chief U. S. Agriculture Negotiator Allen F. Johnson hold a tele-news conference on March 28, 2005

Transcript of Tele-News Conference with Agriculture Secretary Mike Johanns, Ambassador Allen Johnson and Under Secretary for Farm and Foreign Agricultural Services J.B. Penn Regarding the Dominican Republic/Central American Free Trade Agreement, Washington D.C.

March 28, 2005

MODERATOR: Now it is my pleasure to introduce Secretary of Agriculture Mike Johanns. Good morning, Mr. Secretary.

SECRETARY JOHANNS: "Good morning to you.

"I've talked in my first weeks and months as Secretary about the importance of ensuring a more competitive and successful future for America's farmers and ranchers. So I am pleased today to offer some thoughts on that topic.

"I have put additional trade opportunities for agriculture right at the center of my radar screen as Secretary, and of course value-added agriculture and alternative uses are keys to continued success.

"For instance, farmers are becoming bigger producers of energy, and they're also working hard to be more efficient in the use of their energy. That's why I'm pleased to announce that USDA is making $22.8 million available to support renewable energy and energy efficiency improvements by America's agriculture producers and rural small businesses.

"Of that money, $11.4 million will be available immediately under a competitive grant process. The other half will be used later this year for guaranteed loans.

"Promoting energy efficiency and renewable energy benefits producers and small business owners by helping them use new, efficient and environmentally friendly technologies. It also benefits local communities whose economies are supported by new projects and other ag producers whose products and byproducts are often used to produce these kinds of energies.

"And it benefits our economy by promoting greater energy independence. Now anyone who wants to learn more about the grants can visit the USDA Rural Development website at http://WWW.RURDEV.USDA.GOV.

"Earlier I spoke of the vital role trade continues to play in the success of U.S. agriculture. Here with me in the studio are two people who are working day and night to open up new markets for American commodities and products and to keep those markets open. J.B. Penn is the USDA's Under Secretary for Farm and Foreign Ag Services. And Ambassador Allen Johnson is the U.S. Trade Representative's chief ag negotiator.

"I've asked Ambassador Johnson to join me to talk about trade in a changing world and the great opportunities that we can either seize or watch as they pass us by. Later this week I will travel to Colombia to attend the 27th Ministerial Meeting of the current group of exporting nations. This meeting will give me an excellent opportunity to meet with my counterparts from around the world and also to discuss major trade issues such as bringing the Doha Development Agenda Negotiations in the WTO to a successful conclusion, and also the importance of the Dominican Republic/Central America Free Trade Agreement or CAFTA.

"Our farm economy has been experiencing some really historic times including records in farm income, farmers equity, ag exports and production of key commodities. Trade is one of the central reasons for that success. In fact, export sales last year represented 27 percent of total gross receipts.

"With 96 percent of the world's consumers living outside the United States, it's clear that continued trade opportunities for our farmers isn't a luxury; it's a necessity. Right now the playing field between the United States and the CAFTA nations isn't level. CAFTA nations already have access to the U.S. market. In fact, 99 percent of their products can now enter the United States duty-free under other agreements.

"But our farmers and ranchers don't have the same access to CAFTA markets. Currently Central American countries and the Dominican Republic are allowed to charge very high tariffs, limited only by WTO commitments, which would allow the tariffs to even go higher. The current WTO levels are on average 42 percent in Costa Rica, 41 percent in El Salvador, 40 percent in the Dominican Republic, 49 percent in Guatemala, 35 percent in the Honduras, and 60 percent in Nicaragua.

"The numbers are equally as concerning for specific commodities. For soybeans duties are as high as 20 percent, while the WTO permits duties as high as 90. Import duties on U.S. beef range up to 30 percent; the WTO permits duties as high as 79 percent. Cotton tariffs could rise to 60 percent depending upon the country.

"Now CAFTA will change all of that. It will help to level the playing field in our favor. Under the terms of the agreement tariffs will be phased out based on country and specific commodity. Some of the phase-outs will actually be immediate.

For example, American beef producers, duties on prime and choice cuts will be eliminated immediately in Central American countries. U.S. cotton farmers will benefit from zero tariffs that the FTA locks in immediately for markets worth more than $55 million. Costa Rica and the Dominican Republic will eliminate their duty on yellow corn immediately.

"The fact is that these trade barriers are a part of an older, out-of-date world of agriculture-- not one in which orders can be made instantaneously on the Internet or in which products can be transported around the world overnight. That's the new world of agriculture and commerce. It's one of open markets and access where the playing field is level and the opportunities are enormous.

"CAFTA/DR nations have a total population of 44 million with expanding economies. U.S. ag exports to those nations totaled $1.8 billion in 2004. But when CAFTA is passed and those markets are open on a fair and equitable basis, we could well double U.S. exports to those countries.

"American farmers and ranchers know this. Virtually all of the major ag industry and trade groups, more than 50 of them, support CAFTA. That support is broad because nearly every major U.S. ag sector will benefit.

"On the simplest terms when we pass CAFTA the winner will be America's farmers and ranchers, and we want Congress to pass it quickly. Now what I'd like to do is ask Ambassador Johnson to offer his thoughts and then we'll take some questions.

"Mr. Ambassador."

AMBASSADOR ALLEN JOHNSON: "Thank you, Mr. Secretary. I appreciate the opportunity to stop by today and share this conversation with you about the importance of the Central American Free Trade Agreement and the Dominican Republic. I'm not going to repeat all the important facts that you just shared except to reiterate that what this agreement is about is about leveling the playing field. What I've heard over the last four years since I've been in this position has been continuously, we need to do things in our trade agenda that puts agriculture first and creates a more level playing field for our exporters.

"And that's exactly what this agreement does, which is the reason it has such broad support in the agricultural community, covering virtually every sector in the agriculture community. And it also deals with the sensitive issues that I know are out there, particularly as it relates to import-sensitive products such as sugar that we've dealt with those concerns effectively so that they're not a threat to our programs or our viability.

"And I'd like to just reiterate that what the implications are of this agreement is not just as it relates to the CAFTA/Dominican Republic. It also relates to where the United States is as a global leader in trade. In the last four years we've regained our role as the leaders in trade around the world. Agriculture has been the centerpiece of that as a priority. And in this region it's important to recognize that these are partners, not just in trade and economic policy, which is important, but also national security, immigration, narcotics and other policies that are important to our future and our viability.

"Needless to say, the world has not been kind to those that have put up walls, and this country is not about putting up walls. It's about reaching out. And those competitors that currently enjoy advantageous positions in this region, whether they're Canada or Mexico or the European Union, those countries are going to have to realize that we're now in this region to compete at our advantage rather than at a disadvantageous position.

"So again, I look forward to hearing what the questions are. And recognize that we have an important opportunity here to send a message around the world that the United States is going to continue to expand our trade agenda and reach out and open new markets."

MODERATOR: "We'll begin our questions now from reporters with a reminder that if you wish to ask a question, please press "1" on your telephone touch pad. That signals us of your question request. And our first question today will come from Matt Kaye of the Burns Bureau. Go ahead, Matt."

REPORTER: "Hello. I thought I lost you for a second. If I could address this question to the Secretary I'd appreciate it. Thanks for having us this morning. On the question of CAFTA, what is your impression of why some Republican lawmakers in Congress are a bit hesitant about this agreement? Particularly, we learned recently that Chairman Chambliss is not inclined to support it.

"Is it because of experiences, let's say, with NAFTA? Is it because of sugar? Is it because of the small size of the benefits in a relative sense-- $900 million in new ag exports for the U.S the estimated figure?

"And secondly, if we can't pass this agreement through Congress, what implications does that have for our leadership role in the Doha Round?"

SECRETARY JOHANNS: "Really excellent questions. I have not talked to Chairman Chambliss, so I really, really would hesitate to try to explain his reason.

"What I would offer however is this. As I pointed out in my comments, 50 major ag industry and trade groups have already very publicly come on board to support CAFTA. As you point out, there's one group that works hard on these trade agreements to defeat them. And that's the sugar industry.

"I came from a state where we had sugar beets and processing in our state. When I was the governor of Nebraska I worked with that industry. And one of the things that I've said to them is, 'Look, my door is open', because every which-way I look at this agreement I don't see that it has a negative impact on the sugar program. That's a very, very regulated program in our country, and I don't see the amount of sugar coming in as having a downside impact on that industry.

"So possibly what we need to do here is redouble our efforts to get the information out there. For example, I can say without hesitation that agriculture in Chairman Chambliss' state is going to benefit from CAFTA. And we can go down through the specific groups, we can show the areas where the playing field is not level today that with passage of CAFTA there will be better access -- in fact, excellent access in many areas for ag products that are grown in his state.

"So I look at it as an opportunity to get information out to him and to the other members in the Senate and House.

"In terms of the broader picture, there would be downside impact if this were not approved in terms of our ability to negotiate agreements. Now, I'm going to turn to the Ambassador here because he spends his day working on these agreements and trying to do everything he can to enhance the position of agriculture.

"So Mr. Ambassador, offer some thoughts on that."

AMBASSADOR. JOHNSON: "Thank you, Mr. Secretary.

"First of all, let me just make a couple of observations. One is, I believe the number that you cited in terms of exports was not including the Dominican Republic, so it's closer, at least according to the Farm Bureau analysis, to $1.5 billion in additional agricultural exports.

"That's possibly enough to turn this from a net importing agriculture relationship with these countries to a net exporter trade relationship in agriculture, which is exactly what a lot of folks have been telling me as I've done workdays around the country.

"Secondly, as the Secretary said, when it comes to sugar the provisions that are in this agreement are clearly manageable. I know there's a perceived threat or problem in the countryside, but I am 100 percent confident that the issues that were raised and concerns that have been raised have been addressed.

"But let me get to what I think is a very good point which is, what is the implication to U.S. leadership if an agreement that we sign with six of our neighbors, friends, allies both in economic and trade policy as well as security and terrorism and narco trafficking and immigration policy-- what's the implications to our leadership around the world? I think it's very serious.

"I'm the one that deals with the WTO negotiations on a day-to-day basis, have been in all the meetings, and I can tell you that the WTO process, which is where's the biggest bang for the buck for agriculture around the world, would not occur if it was not for U.S. leadership. And U.S. leadership will be seriously questioned if an agreement that is so clearly good for the United States and good for U.S. agriculture, somewhere in the neighborhood of an 8 to 1 ratio of increased agricultural exports over imports under this agreement, if such an agreement can't get through our Congress--

"And I should point out it's already gotten through three of the Central American countries. So they've already stepped up to the plate on their side.

"But even beyond that, it also has implications to what we do in bilateral relationships. I often have people in the agriculture community that come to me and talk about wanting to have a trade relationship, improved trade relationship with Colombia, which is one of our big agricultural exports in South America-- or Thailand or Korea or other countries.

"And of course these countries aren't going to step up to give us their bottom line if we don't honor the agreements that we've already signed.

"And one final thought on this. You have to recognize what the role is of U.S. leadership, the perception of U.S. leadership when it comes to resolving the whole list of issues that agriculture brings to us here, or us at USTR as well as the Department of Agriculture, whether sanitary, phytosanitary issues or disputes.

"If there's a perception that the U.S. is not of one mind in trying to open these markets and address these concerns it's going to encourage those around the world who want to inhibit our access to their markets. Certainly in this region that we're talking about, CAFTA-DR which by the way is the second largest agricultural export relationship that we have in Latin America just after Mexico -- so there's no one that would be happier to see this agreement fail than the people that we're competing against in those markets, whether they're Canada or Mexico or the EU. Or that we're going to work with these countries to compete against countries like China when it comes to textiles.

"This is an important opportunity for us, and if we miss it there will be serious implications."

MODERATOR: "Our next question will come from Uta Henning of Inside U.S. Trade. And standing by should be Philip Brasher from Des Moines Register.

"Uta, go ahead, please."

REPORTER: "This is Uta Henning. Can you hear me? I have two quick follow-ons, one to the Secretary and one to Ambassador Johnson.

"To the Secretary, you said you have not spoken to the chairman. When do you plan to speak to him to find out what the nature of his concern is and it's very clear that he is looking to have some of these concerns addressed whether they be in peanuts or sugar.

"And the other question to Ambassador Johnson is, your statement if the Doha Round would not occur if the CAFTA fails to go through, we have approved agreements with Australia, Morocco, Singapore, Chile and [inaudible] the Doha Round is in a serious, serious lag there. So I'm a bit at a loss on why the CAFTA would contribute to the difficulties because it looks like the Doha Round in agriculture has enough difficulties. It doesn't need any help from the CAFTA. It strikes me as a bit of a disingenuous argument."

SECRETARY JOHANNS: "Well, in reference to my intention to visit with the chairman, I am confident that will happen soon. We visit on a regular basis. I have not talked to him since he announced his position on this very, very important trade issue. But like I said, I'm confident that we will talk soon.

"The other thing I would mention, and the Ambassador did an excellent job of pointing this out-- this is so in favor of American agriculture that I really believe that whether it's the chairman or any other part of the country we can literally sit down with commodities produced in a given state and illustrate how this agreement, how CAFTA, improves and levels the playing field for those producers.

"And again, the sugar issue, we hear about that; but I looked at it with a very, very close view of what the impact was on sugar because again I represented sugar producers and processing in the state that I came from. And I can tell you, the issues with sugar are very manageable as the Ambassador points out."

AMBASSADOR JOHNSON: "Uta, I appreciate your question, and you'll find it strange but the way you worded it I actually think I agree with you in that the DDA, Doha Development Agenda, doesn't need any more weight on its shoulders right now. And it clearly -- which I think you and I would agree on -- the success that we had in Doha in launching this round after the failure in Seattle, the success we had in passing trade promotion authority would send the message around the world that the U.S. was ready to lead in trade, the success that we had last summer in Geneva in getting a historical framework agreement in place-- none of that would have happened without U.S. leadership.

"And you're right, that leadership was largely due to the various successes that we had both in the WTO with trade promotion authority and getting these bilateral agreements through our Congress. We don't need now with what is clearly the best agricultural agreement of the lot-- from a U.S. ag point of view this is a clear winner. For this agreement to fail in our Congress, the message around the world would be that we are driven more by defensive interests than offensive interests because overwhelmingly roughly 1 percent of the producers in this country produce sugar and the rest produce something else. And the vast majority of the others are supporting this agreement.

"The message around the world for the Doha Development Agenda where agriculture is clearly the center would be that the United States is not able to lead in agricultural trade.

"We've got a lot of challenges in this WTO negotiations, and all of those challenges can only be met through U.S. leadership, and that message can only be sent with the success of the CAFTA-Dominican Republic passing our Congress."

MODERATOR: "Our next question comes from Philip Brasher of Des Moines Register. And Bill Tomson from Dow Jones shall be standing by.

"Philip, go ahead."

REPORTER: "Yeah. Just to follow up, there definitely seems to be a feeling out in the country that these trade agreements in the past haven't paid off the way farmers had hoped. One of the things that keeps coming up is the recent decline in the agricultural trade surplus. If there's not a deficit now, that surplus has declined. What's inside the numbers that gets cited often is to back up this feeling that exports haven't really helped U.S. agriculture all that much. Can you all address that?"

SECRETARY JOHANNS: "You studied these numbers as closely as we do, and you see what we see, and that is that we're setting records for exports. We actually are. It's been a remarkable time in terms of our ability to export our ag products into the foreign marketplace. And I think this year we're projecting the third highest year ever. If you look at NAFTA for example, we've had a significant increase in the amount of exports that we have made.

"But part of it is that our society also looks to imports to meet some of its dietary requests if you will. You know, I remember a time where you got a certain amount of fruit during a certain time of the year. Well, the American consumer now is very anxious to have good fruit year around. And so you see increases in that area.

"And you know, you can go on down through the list. As our society becomes more diversified there's a diet out there that is being met by imports from other countries. But believe me, in terms of our ability to export, these agreements have opened up markets; we've increased the amount of ag products we're exporting into the international marketplace. We are setting records, and it's been a rather remarkable time in terms of our ability to sell our ag products worldwide."

AMBASSADOR JOHNSON: "Just a couple of quick thoughts. First of all, when you dissect the numbers as the Secretary says you have to sort of pay attention to what we're importing. What we're importing oftentimes is counter-seasonal products. So things that are grown in our winter somewhere else. Often they're ethnic foods that we maybe don't produce here; we've got a growing ethnic appetite in this country.

"And they're things like coffee and tropical fruits, bananas for example, that we don't produce here but we certainly like to eat. So in that sense I think that I'm not one that purely grades something on the net import or exports. But if you do grade it on that, you should be even more enthusiastic about CAFTA because what this does is increase our exports somewhere in the neighborhood of about an 8 to 1 ratio over what our imports would be under this agreement.

"And coming from Iowa as you're calling from, I know there's that perception out there-- which is why I did some workdays last summer and this fall in Iowa and Minnesota and around that region of the country. But the number I keep reminding people of from the soybean industry, for example, we export about 197 tons to every one-ton we import. In corn we export about 146 tons to every ton we import. And I could go down the list.

"So this is clearly the place that we need to look for expanding our market opportunities. And there's no better place to start than right here in our own neighborhood in building the demand in these countries for our products as well as building their economies so that they can be stable friends and neighbors in what is a very unstable world right now."

MODERATOR: "Our next question will be from Bill Tomson of Dow Jones. And standing by should be Chad Wolf of KXXX Colby, Kansas. Bill, go ahead, please."

REPORTER: "Hello. Is Dr. Penn still there?"

SECRETARY. JOHANNS: "Yes, he is."

REPORTER: "Good. You might be getting bored, so I have a couple questions for you. First question, has a deal been reached with Taiwan? And is that April 16 date that some cow groups were talking about, is that valid? And I'm talking about BSE here of course.

"The second question is, we're getting news out of Tokyo that there was a panel there, reached a position decision for U.S. beef trade. How positive is that, and what do you see the situation is now?"

SECRETARY. J. B. PENN: "Well, thanks for the question. I appreciate the opportunity to clarify the situation in these two important markets.

"First with respect to Taiwan, we are very close to an agreement with Taiwan to resume importation of our beef. But we're not quite there yet. We still have a detail or two that we have to work out, and there was a premature announcement by some that the market was open and that April 16 would be the date. But we've not worked out all the details yet, and our people are discussing this with the Taiwanese at this very moment.

"Now with respect to Japan, you're correct in that the Prion Subcommittee of the Food Safety Commission did agree to recommend a change in their regulation so that they would only test animals 21 months old and older. This recommendation now goes to the full Food Safety Commission, which will meet, we hope sometime this week. And then following that there is a 30-day public notice period before the final decision would be rendered.

"This is a step in the right direction. It's a very small step. But we still think the Japanese process is going far too slow, and it's unnecessarily cumbersome. We would like to see it accelerated, and we hope that the Japanese will do that."

MODERATOR: "Our next question comes from Chad Wolf of KXXX in Colby, Kansas. And Jackie Fatka from Farm Progress should be standing by.

"Chad, go ahead, please."

REPORTER: "Gentlemen, if you could please address beef imports into the United States under CAFTA?"

SECRETARY JOHANNS: "I'll turn to the Ambassador, and he'll give you some information on that."

AMBASSADOR JOHNSON: "Well, the primary import that would be increased under this agreement is sugar. The rest of it is basically increasing our exports. So let me just sort of focus on that because again as we said -- by the way, the numbers I cited were the American Farm Bureau Federation analysis, not ours, that showed that we'd increase our exports by about $1.5 to $1.6 billion and increase our imports I think the number is around $175 million or something like that.

"Most of that is focused on sugar. Now let me put a couple of observations on the sugar program implications. First of all, when we were talking with the sugar industry prior to the negotiation at CAFTA what their primary concern was was that the over-quota duty on sugar remained where it is. And we achieved that-- where the over-quota tariff on sugar is roughly about 100 percent, that's going to continue.

"The secondary concern was they wanted to make sure that the amount of sugar that was let in under this agreement was manageable. Well, we were able to achieve that as well. Basically the amount of sugar that would be allowed in is equal to about one day's production or about a little bit over 1 percent of U.S. consumption of sugar, well below what we had in the mid-'90s in sugar imports for example. Or another way to look at it is about 1 to 1.5 teaspoons of sugar a week per capita.

"The other thing they were concerned about was, they didn't want to see sugar coming through, let's say, from Brazil to one of these countries and then having these countries send us their sugar. So we put in a provision called the Substitution Provision that prevents that from occurring. Again, that's unprecedented. We did that in the agreements that this administration negotiated, but it didn't exist in previous agreements.

"And then finally there was a general observation among all of us-- well if there was any reason that any of this increase in sugar which as I just said is very, very minor -- did have an impact on our programs or our industry we have a provision in there called Stocks Management Program that allows us to compensate these countries with something other than sugar and not allow them to send us sugar.

"So the reason I'm giving you such a long answer to a short question is simply because if that sugar that's being allowed in -- roughly 1 percent of U.S. consumption, one day's production in the U.S. -- does end up having an implication of disrupting our market, we have a provision in there that actually can stop that from coming in as well.

"So from the U.S. agricultural perspective, it's a win/win situation in terms of our exports, and it's clearly manageable in terms of our imports. And there is no such provision, by the way, for our exports to these countries. So our corn producers, our wheat producers, our rice producers, our pork and poultry and beef and dairy producers, fruits and vegetables and all the rest are going to be able to export to those markets eventually with duty-free treatment."

MODERATOR: "Our next question comes from Jackie Fatka of Farm Progress Publications. Jerry Hagstrom should be standing by.

Jackie, go ahead, please."

REPORTER: "As to the sugar groups, who are some other opponents that stand in the way of approving this? Also, can you compare CAFTA with NAFTA and some of the similarities in passing NAFTA and also some things in the negotiations that you may have addressed to protect U.S. agriculture?"

AMBASSADOR JOHNSON: "In terms of, besides the Sugar groups, really in agriculture they're the primary ones. I know that there's a couple of other farm groups, [National] Farmers Union I think and R-CALF I think have some concerns as well. But as I point out, we have big support from the National Corn Growers Association, American Soybean Association, USA Rice Federation, National Association of Wheat Growers, National Pork Producers, the Cattlemen, the Farm Bureau, the National Milk Producers Federation, and I could frankly go on and on. As the Secretary said, there's some 60 groups that are there.

"When it comes to the comparison between NAFTA and CAFTA, I suppose the main thing I'd like to stress is the similarities in the sense that we're leveling the playing field. Unlike Mexico, these countries already have duty-free access into our market for 99 percent of their agricultural products that they export to us -- and 80 percent by the way of all their products they export to us.

"So there's a big difference there in that it's all win and very little give on the offensive side because they've already got access to our market.

"On the defensive side, when it comes to sugar basically every provision I just mentioned is unique to this agreement or it's certainly unique to this administration when it comes to managing the sugar issue. And so in that sense if you're from the sugar industry you should consider this to be a major improvement in terms of managing any sort of threat to our programs or the industry's viability."

MODERATOR: "Jerry Hagstrom will have the next question from Congress Daily. And Toro Ushida (sp) should be standing by.

"Jerry?"

REPORTER: "Yes. Thank you. My first question is, are the countries that would come under the CAFTA agreement accepting U.S. beef at the present time, or are they keeping it out due to the BSE question?

"And my second question is about cotton. Last week the cotton subcommittee met in Geneva, and I'm wondering what your views are on how that meeting went and what it means for the development of the cotton issue.

"And also, I understand that Secretary Johanns and other people and USDA and Ambassador Johnson have recently met with the U.S. cotton industry. And what is your time-table or your plan for dealing with a resolution of the cotton case?"

SECRETARY JOHANNS: "Let me have the Ambassador talk about the issues you raised in the first part of your question, and then I'll jump in and talk to you a little bit about the cotton."

AMBSSADOR. JOHNSON: "First of all, some of these countries are, I believe most of these countries are opening their markets for our beef into those markets. So I'd have to confirm that. We have, one of the things I think is worth mentioning when it comes to one of the values of having this improved relationship -- and JB can talk about this better than I can -- having a good trade relationship with these countries improves our ability to resolve these sorts of issues.

"For example, the first market -- we have a free trade agreement with Mexico. The first major market that we saw improved access for our beef after the BSE scare was Mexico. And so we set up in these agreements a means for resolving these sorts of issues in a very efficient and effective way because the trade relationship is already there. And I would expect that not only when it comes to our beef and BSE but I would expect that on a whole series of sanitary and phytosanitary issues that our industries raise as concerns.

"A number of these countries already recognize, and we're working on the rest, already recognize U.S. certificates as the basis for accepting our beef into their market, as well as pork and other products.

"So at any rate, that's just one observation. When it comes to the cotton issue, the main point is, is that we're continuing to work in trying to make a successful Doha Development Agenda Round. That's the best way for addressing the cotton issue if you have concerns in other parts of the world about the cotton support. What we said all along is that we're willing to reform our programs to the extent that we see others reforming theirs and of providing access into their markets.

"And there's some substantial changes taking place in the world when it comes to cotton because of the doing away with the quotas as of January 1 of this year. And our cotton industry recognizes that frankly again another reason that we need CAFTA is because it creates regional competitiveness for our cotton producers, for our textile industry to compete against China around the world.

"Finally, on the case issue, I'll let the Secretary and JB talk about it, but obviously on the case we're continuing to consult with the industry, consult with Congress, consult with each other here in this room as to what are the implications, what changes if any there are needed in various programs.

"But as we talk in Geneva we're stressing very much that folks shouldn't look just at litigation as a way of solving their problems. The best way to resolve these outstanding issues is for all of us to succeed in the Doha Round in the negotiations."

SECRETARY. JOHANNS: "What I'd like to add to that is that, yes-- in fact I've met with cotton industry and the whole purpose of that meeting was to make sure that they understood that I wanted them to be a part of the process. I encouraged them to meet with their membership as quickly as possible, to bring their ideas to us in terms of not only the case but of course we always welcome their comments and their thoughts relative to the negotiations on the Doha Round.

"So we want to make sure they understand that we're throwing the doors open, and we want them to be a part of the process.

"JB?"

SECRETARY PENN: "I think that about sums it up. We're having further meetings with not only the cotton industry but with the exporters that would be affected by the Export Credit Programs. And we're taking into account all of the considerations as Ambassador Johnson said, that we have the negotiations to be concerned about; we have of course the Congress, the congressional committees to keep involved in the process, and we have the stakeholders in our own industry to keep involved.

"And so we're working very diligently to try to address all of those concerns."

MODERATOR: "And our final question today will come from Toro Ushida (sp). Toro, go ahead, please."

REPORTER: "Hello. My question is about of course U.S. beef exports to Japan. I have a question to Secretary Johanns. There is a very strong frustration in the Congress on this issue. And some congressmen are talking about possible trade sanction to Japanese products. So could you tell me the position of the U.S. government on this issue, on the sanction? And the possibility of fighting it to the WTO on this issue, please?"

SECRETARY JOHANNS: "As I've said many times in the past, we have had a remarkable trading relationship with Japan in many areas over the years. Japan is a major trading partner. And in fact until this issue arose it was the major market for our beef products.

"My thought is always to work through the issues through a negotiation and discussion. I find that to be a far superior way than retaliation. I find that to be a far superior way than litigation. And so my hope is that we can do everything possible to move this process along and it's one of the reasons why I've asked for a date certain for beef to start entering the Japanese marketplace.

"I do agree with Under Secretary Penn's assessment. This is a positive step, the decision that was made by the Prion Subcommittee. Japan has consistently made steps in the right direction, but it's been slow. In fact, it's been enormously slow. And so my hope is that we will arrive at a date, we will work to achieve an open marketplace with Japan. But I would also make the same case for our other trading partners. Trade disruption is not a good situation for anyone.

"So my goal is to continue to work with the Japanese government, continue to do everything we can to get those markets reopened.

"I'll offer the opportunity for the ambassador to offer a thought if he would like."

AMBASSADOR. JOHNSON: "Well, I don't have anything really to add to that discussion. I believe this was our last question.

"I'd just like to point out on the CAFTA point, and I started with this in terms of the world has not been kind to those that have built walls-- which is one of the reasons why you see others in the world reaching out. During the decade before we came to office there was literally hundreds of free trade agreements and customs unions between our competitors and our customers that the United States was left out of.

"And one of the reasons I'm so familiar with them is, when I'm negotiating these free trade agreements whether they're with Chile or Central America or Morocco, I can look at the agreements these countries already have with the European Union or with Mexico or with Canada. And you see even as we speak that the European Union just expanded into ten new member states. They've learned the lesson of history that you need to reach out and expand your reach through trade.

"And they're beginning negotiations with Central America in terms of having a free trade agreement with those countries.

"So again, we look at this as an opportunity for the United States to not just expand our interests economically but to send a message globally that we do reach out to our friends and neighbors in trying to improve our relationships and strongly encourage folks to take the time to take a look at the websites. The USDA has an excellent website talking about the benefits of CAFTA to our agriculture community. And raise their concerns so we get a chance to answer them.

"I think the Secretary's comment earlier about some members of Congress who maybe aren't as familiar with the benefits of this agreement not being sure which way they're going to vote -- well, this is an opportunity for us to welcome that discussion because I think it clearly ends up on the positive side for all of us."

MODERATOR: "Thank you, Ambassador Allen Johnson.

"And Mr. Secretary?"

SECRETARY JOHANNS: "The questions were excellent today. What it really boils down to for me is this. As I talk to producers around the country, the farmer and rancher, about trade, one of the things that they say to me over and over again is, you know, Mike, it just isn't fair that countries out there can sell their products into our marketplace and we can't do likewise.

"And you know, they could not be more right about that assessment. That's a really straightforward assessment on trade policy.

"But that's the situation now with the CAFTA nations; 99 percent of their products now enter the United States duty-free under other agreements. CAFTA levels that playing field as I specified.

"That's why as Secretary of Agriculture it's a real straightforward issue for me. If I want to level the playing field and grow that CAFTA marketplace and send our products into that marketplace, we need to do everything we can to get CAFTA to the finish line for the benefit of our farmers and ranchers across this country."

MODERATOR: "Secretary of Agriculture Mike Johanns.

"I'm Larry Quinn bidding you a good day from Washington."