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Remarks by Ambassador Ron Kirk at the U.S. Meat Export Federation

U.S. Meat Export Federation
May 22, 2009
Washington, D.C.

*AS PREPARED FOR DELIVERY*

Thank you, Phil Seng, Jon Caspers, all the members of the U.S. Meat Export Federation, including the National Cattleman's Beef Association, American Meat Institute, National Meat Association, and National Pork Producers Council.

I understand how important exports are to the bottom lines of both the beef and the pork sectors.

The beef sectors have had some challenges over the last five years. But in 2008, seven percent of all beef produced in the United States was exported.

Pork exports have increased dramatically over the last several years. Nearly 20 percent of pork produced in the United States was exported last year. That's compared to about 13 percent in 2005.

So trade is a big deal for you. You've delivered that message loud and clear.

Two days ago I met with top executives from your industry. We talked about the importance of the U.S. meat industry to the U.S. economy... and the challenges that you face. I'm looking forward to working with all of you in the months to come.

I've looked forward to speaking to you for two reasons. One, I'm from Texas and so I understand the importance of agriculture to our nation's economy. Two, in this challenging economic climate, we've recently made some real progress for the U.S. meat industry.

When I use the term "meat" this morning, I mean both the beef and pork industries.

Progress for the U.S. meat industry is progress for the American economy, progress for American families and progress in the global marketplace.

America's ranchers and farmers help to feed the families of the world. Cattle and beef production represent the largest single segment of American agriculture.

The statistics about your industry illustrate your importance to our economy:

The U.S. beef industry is made up of more than 1 million businesses, farms and ranches. There are nearly 66,000 hog and swine operations in the United States.

In 2007, the production of meat animals was responsible for $66 billion in added value to the U.S. economy.

Last year, U.S. beef and beef products were valued at more than 3.6 billion dollars.

Total 2008 U.S. pork and pork variety meat exports were more than 4.6 billion dollars. Both of those figures were up from the year before.

Our goal at USTR is to continue to access growing international markets for America's high-quality meat, both beef and pork.

One of the best ways we can grow market access for the U.S. meat industry is by enforcement. In this challenging economic climate, trading partners must play by the rules if we are going to revive our economy as a global community.

In the past 90 days, USTR has used enforcement and diplomacy to unlock significant markets for the U.S. meat industry, ranchers and farmers, and to keep markets open during the outbreak of the H1N1 virus.

Earlier this year, we were pleased to reach an agreement with the Government of Chile to clarify a grading issue. This resulted in the immediate resumption of exports of certain types of U.S. beef and beef products.

Last week, we reached a significant milestone for increased market access. On May 13th, in Geneva, the United States and the European Commission signed a memorandum of understanding in the beef hormones dispute.

I want to thank you for your support, engagement and cooperation throughout this process.

We believe the agreement is a huge step forward in a 20-year dispute that has largely blocked U.S. meat exports from the European market.

The agreement will provide U.S. producers significant additional access, at zero duty, to the European Union market for high-quality beef produced from cattle that have not been treated with growth-promoting hormones.

I know that some of you remain skeptical of the EU market so long as it continues to ban beef from cattle treated with hormones, and does not permit the use of Pathogen Reduction Treatments, or PRTs.

This agreement gives us a chance to take steps toward a longer term agreement.

In the first phase, we will see whether the EU comes to a conclusion on approval of PRT's. In the second phase, we will negotiate to resolve other long term issues connected with the beef hormone litigation.

We are confident that the Agreement will move us in the right direction on these outstanding issues. If not, we reserve the right to return to the WTO.

This agreement also gives us an opportunity to add the EU to the leading export destinations for high-quality U.S. beef, which will provide a substantial boost for U.S. ranchers and meat packers and their employees.

With this agreement the EU import quota for U.S. beef will be set at 20 thousand tons in each of the first three years, and this will increase to 45 thousand tons in the fourth year. And in contrast to the existing access, the new access will be duty-free.

The EU remains one of the few markets to ban beef from cattle given growth-promoting hormones - beef that is perfectly safe to eat. However, we see this agreement as a pragmatic way forward.

This agreement also shows what we can accomplish when we adopt a practical, problem-solving approach to trade barriers.

I'm appreciative of our close coordination with the U.S. Department of Agriculture, who was our partner in these negotiations.

The agreement would also not have been possible without the skilled contributions of EU Trade Commissioner Catherine Ashton. And I must particularly acknowledge the leadership of Phil Seng from the U.S. Meat Export Federation. Jim Murphy from our office also worked hard to get this agreement done.

It is a USTR priority to make certain that meat products aren't frozen out of international markets due to myths without scientific justification.

Over the past several weeks, we've had our work cut out for us on pork due to the H1N1 virus scare.

The simple truth is this: American pork is safe and the world market should remain open to U.S. pork products and live swine.

Even so, more than a dozen countries have imposed trade restrictions on U.S. agricultural products without scientific justification as a result of the outbreak of this virus.

As much as $900 million in annual U.S. exports could potentially be affected if the announced bans are maintained.

Since the outbreak of the virus, I've worked in close consultation with members of the Cabinet to remind all trading and in accordance with their international obligations.

To that end, I want to acknowledge the World Trade Organization, in concert with the World Health Organization, the World Organization for Animal Health, and the Food and Agriculture Organization, for issuing a very strong statement validating the safety of U.S. pork.

This statement let our trading partners know that restricting U.S. pork or any meat products due to the recent outbreak is without scientific justification, and may result in serious trade disruptions without cause.

At the direction of President Obama, Secretary Vilsack and I are continuing to urge our colleagues in these countries to lift these bans. They must allow the import of America's high-quality and safe meat.

We are particularly working to resolve outstanding issues with a key market for meat exporters: Russia.

One problem facing U.S. pork exports to Russia is Russia's application of sanitary and phyto-sanitary measures that are not based on international standards. These SPS measures are used to control and restrict trade.

This problem has also resulted in the arbitrary delisting of many U.S. facilities that export to Russia over the last year. We have raised these concerns with our Russian counterparts and will continue to press for a resolution of these issues.

It is an ongoing battle to enforce America's rights in the global marketplace with regard to meat products.

The U.S. beef and cattle sectors have had a difficult time since December 2003 due to worldwide concern about BSE.

Despite the fact that the first BSE positive cow discovered in the U.S. was imported from Canada, one hundred or more countries closed their markets to all U.S. beef and beef products. That included all of our top Asian markets.

In 2003, U.S. exports of beef and beef products were nearly four billion dollars. But they fell to 808 million in 2004. These losses have severely impacted the U.S. beef industry's bottom line.

But enforcement efforts are making things better. In 2008, U.S. beef and beef products exports were back at 3.62 billion dollars. That's a one billion dollar increase over 2007, and close to pre-BSE levels in terms of value.

More than 60 countries now accept all U.S. beef and beef products consistent with the OIE, including the 27 EU countries.

We still have more to do.

Too many of our trading partners - especially Japan, Taiwan, China, and Hong Kong - maintain unscientific restrictions on U.S. beef - and on pork as well in Taiwan, which has failed to set a tolerance for ractopamine.

The Administration is currently reviewing trade-related measures put in place by these and other foreign governments.

We are also developing a policy and approach to achieve meaningful and sustainable market openings for U.S. meat products.

The progress we've made so far, though, illustrates the fact that this Administration is committed to changing the game on trade.

We are ensuring that American farmers, ranchers, businesses and workers receive the benefits they deserve in the global, rules-based trading system.

In his 2009 Trade Policy Agenda, President Obama has promised to pursue a robust, progressive trade agenda that will also be more responsive and responsible to American workers and families.

As we do so, leadership will be essential from major U.S. stakeholders and trade leaders like you.

The truth is that no major trade agreement or advance has ever come to fruition without the strong support of the U.S. agriculture community.

You are a powerful voice. You will be a key player in the rebuilding of our trade agenda into one that works for America's working families.

The agriculture community can also aid in the rebuilding of our economy and of American competitiveness across the board.

President Obama is tackling some of the biggest issues facing our country today: the imperatives of health care reform... improvements to education... and a new green energy economy. The agriculture community has a vested interest in all of these things.

Ranchers and farmers, who sacrifice so much to stay on the land, need access to affordable health care.

Your kids deserve a decent education that will make them competitive workers in whatever careers they choose.

And the agriculture community is already a huge part of our pivot to new sources of energy.

There's an old saying that when you have eggs and ham for breakfast, the chicken is involved. But the pig is committed.

Your community is committed to nearly the same degree when it comes to the revival of the American economy.

I will respectfully submit that you have an opportunity for real leadership not just on trade, but also on these other initiatives so crucial to America's recovery.

When the agriculture community speaks, it makes a difference. So I'm very hopeful that together, we can make trade a powerful contributor to the revival of the U.S. and global economies.

Together, we can make America stronger for the future.

Thank you for your contributions to the United States economy and for your engagement. I'm looking forward to working with you.