The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“MORNING BUSINESS” mentioning the U.S. Dept of Agriculture was published in the Senate section on pages S15644-S15646 on Nov. 23, 2003.
The publication is reproduced in full below:
MORNING BUSINESS
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THE FLORIDA CITRUS INDUSTRY
Mr. NELSON of Florida. Mr. President, this week, leaders from thirty-
four countries around the Western Hemisphere gathered in Miami for the Free Trade Area of the Americas (FTAA) Ministerial and Americas Business Forum for the purposes of expanding free trade within the Western Hemisphere.
The negotiations at this and future Ministerial meetings will greatly impact my State of Florida.
This event drew large headlines in the papers across the hemisphere as leaders converged upon Miami and anti-globalization protesters gathered outside to voice opposition. In this context, I feel it appropriate to commend Miami-Dade County, the City of Miami, and all the local and Federal law enforcement officers who helped keep the peace during a tense week of negotiations, and everyone who made it a success.
But in light of these talks, I want to share my own concerns regarding the FTAA negotiations, and the path ahead.
These talks did generate positive movement forward, towards greater economic integration in the hemisphere. Trade Ministers agreed to a baseline of minimum standards for a full and comprehensive agreement that takes into account differing levels of development among nations. This framework is a step forward that gives nations flexibility.
A carefully negotiated Free Trade Area of the Americas could generate new economic opportunities for Florida, our country, and the entire Western Hemisphere.
Yet, the FTAA poses opportunities and challenges for Florida as we work to make Miami the premier U.S. candidate city for the location of the permanent FTAA Secretariat, while at the same time protecting the viability of a key part of our way of life in Florida--the domestic citrus industry.
We must be cautious about the scope of the final FTAA and consider how it affects our domestic industries. I urge U.S. negotiators to take some important concerns into account as an agreement is shaped in the months ahead. The different parties, alliances, and groups involved in the negotiations have gone back and forth on which goods and products to include in a final agreement, and the flexibility provided for in the final Miami Declaration reflects this fact.
Citrus is one product that must not be included in these negotiations. I again call upon the Administration, as I have done in the past, to give citrus special consideration; given the unique nature of the citrus fruit and juice trade.
The administration should state unambiguously that it will not agree to any reduction of the current tariff on imported orange juice in the context of the FTAA or any other trade negotiation, until Brazil ceases its monopolistic, anticompetitive trade practices. Let me explain why this is so important to the State of Florida.
This tariff is a lifeline for Florida's citrus industry and the State's economy because it helps to promote competition--and it enables us to compete in the global marketplace.
It is very clear that any reduction in the tariff would destroy Florida's citrus industry and devastate the State's economy. The citrus industry is the State's second largest, contributing over $9 billion to our economy. And the citrus industry accounts for nearly 90,000 direct and indirect jobs throughout Florida and the country.
A collapse of this industry would not only cost tens of thousands of jobs, it would also cost the State and county governments of Florida up to $1 billion in lost tax revenues.
This would mean less money for other vital public services, such as police and firefighters.
This spring, I arranged for Andrew LaVigne, Executive Vice President and CEO of Florida Citrus Mutual to testify before the Senate Foreign Relations Committee and share these arguments, for the benefit of my colleagues in the U.S. Senate so that they could be made a permanent part of the record, because they are so strong.
Orange juice consumption is concentrated chiefly in two places: the United States and the European Union. Unlike other agricultural products, production is also limited chiefly to two places: the United States and Brazil. Florida's growers provide the vast majority of U.S. citrus that is used for orange juice.
Florida's citrus industry is efficient, competitive, and environmentally responsible; it is also one of only a handful of U.S. agricultural commodities that receives no federal or state subsidies. Let me say it another way: American taxpayers do not subsidize the citrus industry, unlike many other sectors that reaped benefits in last year's farm bill.
Florida's citrus industry is composed of 12,000 growers, many of them small family-owned operations, in addition to the many tens of thousands of others around the state and country who contribute to this
$9 billion industry. But, this is more than just an economic engine to Florida. It is an American way of life.
Brazil's citrus industry, in contrast, is dominated by four large producers who form large export cartels to maximize their advantage and squeeze small producers. The industry also benefits from advantages brought by years of past subsidization and dumping, lax environmental laws, weak and largely un-enforced labor laws, and price manipulation. And, Brazilian orange juice already has access to U.S. markets. Their government's pronouncements to the contrary are counterproductive to advancing greater hemispheric economic cooperation.
Brazil's citrus industry also continues to rely heavily on child labor and the low wages associated with using children.
In Florida, we do not allow children to work in our orange groves.
Until Brazil whole-heartedly enforces its labor laws, putting an end to child labor and paying workers a decent living wage, there will not be a level playing field for competition.
Florida's citrus industry can compete with Brazil, or anyone else, as long as there is a fair playing field. WTO negotiations should deal with these problems. But in the meantime, the tariff on frozen concentrated orange juice imports acts to balance the anti-competitive practices of Brazil. It also acts to prevent the large Brazilian producers from overwhelming the U.S. market and driving Florida's 12,000 growers out of business.
During the Trade Promotion Authority debate in 2001, Senator Graham and I offered an amendment that would have prevented tariffs from being reduced on commodities imported from other countries in violation of trade laws, such as Brazilian orange juice.
Although this amendment was defeated, we were successful in including language that required the Administration to study and report to the Congress on the economic effects that a tariff removal would have on import-sensitive commodities like frozen concentrated orange juice and citrus. I look forward to reviewing the results of these studies as the debate progresses.
Without this tariff, the Florida citrus industry could collapse, and Brazil would have a monopoly over the global market. Already, Brazil produces 53 percent of the world's orange juice and has a virtual monopoly over the European market.
Removal of this tariff would not enhance free trade--it would, rather, giver Brazil a total world monopoly and make that country the world's dominant citrus and citrus juice producer and enable them to control market supply, access and prices with no competition.
This would not only devastate Florida's citrus industry, it would also be bad for all consumers. Absent competition from Florida's growers, the large Brazilian cartels would have all consumers at their mercy.
I have worked to bring these issues to the attention of the Administration and to ensure that one of Florida's primary industries is not traded away at the negotiating table, and I will continue to do so. In fact, I plan to travel to Brazil in the coming weeks and have asked to meet with President Lula da Silva so that I can carry the message of the Florida citrus growers: free trade can only benefit American consumers if it offers free and fair competition and is not monopolistic--so Brazil must reform its monopolistic citrus industry.
It is past time for this administration to acknowledge the inequalities between the U.S. and Brazilian citrus industries, and recognizing these inequities, to treat citrus accordingly.
I would like to conclude by again urging the administration not to agree to any reduction of the current tariff on imported orange juice, because if they do, an American industry and American consumers will pay a steep price. These issues are too important to the people of Florida to be ignored, and we will all be watching closely in the months ahead.
I ask unanimous consent to have printed in the Record conclusions in the testimony from Andrew LaVigne, Executive Vice President and CEO of Florida Citrus Mutual, from a hearing before the House Agriculture Committee on June 18, 2003, and Squire Smith, President of Florida Citrus Mutual, before the House Agriculture Committee, Subcommittee on Livestock and Horticulture on November 5, 2003, and an Op-Ed that appeared in the Miami Herald on November 19, 2003.
There being no objection, the material was ordered to be printed in the Record, as follows:
Conclusion
The U.S. market is by far the most significant market we have. Unlike dairy and crop commodities, which are consumed throughout the world, orange juice is consumed primarily in the highly developed market economies of the United States and Europe. With Brazilian juice firmly entrenched in Europe at rock bottom prices, it only makes sense for Florida producers to concentrate on sales at home. Our growth in exports of specialty products, such as NFC, must necessarily be incremental and secondary to the domestic market for FCOJ. While the Florida industry will continue to seek out new export markets, both for fresh and processed products, it is myopic to think that we are likely to be as large a factor in foreign markets as Brazil. We simply do not have the domestic subsidies we would need to compete with the Brazilians and Europeans in Europe. Furthermore, we cannot be there to develop those new foreign markets slowly over the many years it will take them to achieve higher disposable incomes, if the Florida industry is forced out of existence by the elimination of the tariff. We want to serve the U.S. market and we can do so without the huge government payments that other agricultural sectors receive. However, the U.S. orange juice tariff is necessary to offset the unfair or artificial advantages that lower the price of Brazilian juice.
Florida Citrus Mutual understands that free trade in many industries, including many agricultural industries, leads to increased competition, eventual price benefits to consumers, and overall global economic growth. Unfortunately, free trade cannot deliver these rewards to such a concentrated and polarized global industry, especially one in which the developing country's industry is, in fact, already the most highly developed in the world. Florida Citrus Mutual appreciated the opportunity to explain to the Committee the unique global structure of the orange juice industry and the negative economic effects that would occur as a result of U.S. tariff reduction or elimination.
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Domestic Policies Affecting the Specialty Crop Industry
conclusion
The U.S. Government's approach to domestic policy that impacts the fruit and vegetable industry, including the citrus industry, is to a large extent driven by the U.S. trade policy as it affects the industry. Our ability to properly address issues of pest and disease interdiction and eradication, labor law reform, agricultural research and export market growth depend almost entirely upon the balancing impact of the tariff, which assures that the industry can continue to exist in an unsubsidized domestic environment alongside otherwise artificially manipulated global competition.
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Tariffs Would Control Oversupply
(By Mark Ritchie)
Last September in Cancun, the Bush administration's promises of free trade's benefits ran headlong into the reality of the last ten years under the World Trade Organization and the U.S.-Canada-Mexico arrangement known as NAFTA--the North American Free Trade Agreement.
Governments from Latin America, Africa and Asia decried the loss of millions of farm jobs, and denounced a system that promotes the continued export of agricultural commodities below their cost of production price (dumping) by U.S. and European agribusiness corporations. That's why the WTO talks in Cancun collapsed.
Fortunately, a close look at the underlying conflicts at the WTO reveals the potential for a new approach that negotiators trying to create a Free Trade Area of the Americans should use as a blueprint. It would create a win-win solution to the chronic low prices that plague farmers in the United States, Brazil and elsewhere.
International trade negotiations used to be about finding solutions that were aimed at benefiting societies as a whole. In 1947, just a few miles from Miami, governments met in Havana to discuss the creation of the International Trade Organization (ITO). The stared goal for the organization was full employment and the need to global monopolies and predatory trade practices. At that time, the nations gathered knew well the ravages of war and the role that brutal trade conflicts played in creating the economic Depression of the 1930s, the breeding ground for fascism.
Balancing needs
At the talks in Havana, the U.S. Department of Agriculture brought forward a special set of agricultural trade rules that would help balance the needs of producers and consumers with an emphasis on protecting food security over the long term. In essence, U.S. negotiators, with the Great Depression still very much on their minds, developed rules that helped nations balance supply and demand.
The ITO never got off the ground, but these agricultural rules were included in the original general Agreement on Tariffs and Trade, precursor to the WTO. The rules allowed nations to use quantitative import controls as long as they were imposing supply controls. This spurred countries to address domestic oversupply, helping to bring global supply and demand into balance. This plan was key to the ``golden era'' for U.S. and global agriculture in the 1950s and 60s.
The WTO Agreement on Agriculture undid this important work, but now the ministers gathering in Miami have an opportunity to make improvements by returning to the work done by the pioneers back in Havana in 1947. They have to tackle global over-supply in ways that can help producers in Florida and Brazil earn a profit by restoring the balance between supply and demand that has been damaged by the ``race to the bottom'' results of free trade.
Negotiators must address monopoly-style business practices that dominate global trade in highly competitive products when global prices fall too far.
Tariffs beneficial
The solution to low commodity prices in general, be it orange juice or coffee, is not that complicated. Every business knows that when supply and demand are out of balance, there is going to be trouble. In agriculture, when there is not enough supply, some people go hungry. When there is too much supply, prices drop, farmers suffer and many go out of business.
We need modern trade agreements that enable countries to restore the balancing mechanisms for supply and demand. To take that step, the Bush administration needs to unlock the
``free trade'' straitjacket of eliminating tariffs at all costs, and start focusing on agricultural market fundamentals.
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