MARKET EXPANSION FOR U.S.-PRODUCED WINE TUESDAY, JULY 24, 1984 HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, SUBCOMMITTEE ON TRADE, The subcommittee met at 9:30 a.m., pursuant to notice, in room B-318, Rayburn House Office Building, Hon. Sam M. Gibbons (chairman of the subcommittee) presiding. [The press release announcing the hearing follows:] [Press release No. 44, Friday, July 13, 1984] THE HONORABLE Sam M. GIBBONS (D., FLA.), CHAIRMAN, SUBCOMMITTEE on Trade, COMMITTEE ON WAYS AND MEANS, U.S. HOUSE OF REPRESENTATIVES, ANNOUNCES CONTINUATION OF HEARINGS ON LEGISLATION TO EXPAND MARKETS FOR UNITED STATES PRODUCED WINE The Honorable Sam M. Gibbons (D., Fla.), Chairman of the Subcommittee on Trade of the Committee on Ways and Means, U.S. House of Representatives, today announced the continuation of hearings previously announced in Subcommittee press release #19 and begun November 15, 1983, on legislation to reduce trade barriers and increase market opportunities for United States produced wine. The hearings will be held on Tuesday, July 24, 1984, in room B-318 Rayburn House Office Building beginning at 9:30 a.m. The Subcommittee received testimony November 15, 1983, on H.R. 3795,1 to harmonize, reduce, and eliminate barriers to trade in wine on a basis which assures substantially equivalent competitive opportunities for all wine moving in international trade. Since then, a substitute proposal to expand and develop markets for United States produced wine has been developed and put forth by various interested parties. This substitute consists of the following main elements: (1) Presidential direction to the U.S. Trade Representative to enter into consultations with major trading countries to seek a reduction of foreign tariffs on U.S. wine; (2) Initiation by the President of an investigation under section 301 of the Trade Act of 1974 of nontariff barriers of major foreign trading countries on wine and other grape products to determine whether such barriers are unjustifiable, unreasonable, or discriminatory and burden or restrict U.S. commerce; (3) Action by the President under section 301(b) if negotiations to reduce foreign tariff and nontariff barriers on U.S. wine with each major trading country are unsuccessful by January 1, 1986; (4) Status reports from the U.S. Trade Representative to the House Committee on Ways and Means and the Senate Committee on Finance; (5) Authority for the President to use authority under section 135 of the Omnibus Budget Reconciliation Act of 1982 to make available at least $2 million but not more than $10 million to initiate wine export promotion programs with nongovernmental trade associations representing U.S. wineries; and (6) An amendment of the definition of domestic "industry" under the countervailing duty and antidumping laws in cases involving a processed agricultural product to include not only producers of that product but also producers of the principal raw agricultural input if they allege material injury from imports of the processed product. 'See "Miscellaneous Tariff and Trade Bills," Serial 98-76. (1) DETAILS FOR SUBMISSION OF REQUESTS TO BE HEARD Witnesses will be heard who previously testified or requested to appear. Additional requests to be heard must be made by telephone to Harriett Lawler [telephone (202) 225-3627] by noon, Friday, July 20, 1984. The request should be followed by a formal written request addressed to John J. Salmon, Chief Counsel, Committee on Ways and Means, U.S. House of Representatives, Room 1102 Longworth House Office Building, Washington, D.C. 20515. In view of the limited time available to hear witnesses, the Subcommittee may not be able to accommodate all requests to be heard. Those persons and organizations not scheduled for an oral appearance will be encouraged to submit written statements for the record of the hearing. All persons requesting to be heard, whether they are scheduled for oral testimony or not, will be notified as soon as possible after the filing deadline. It is urged that persons and organizations having a common position make every effort to designate one spokesman to represent them in order for the Subcommittee to hear as many points of view as possible. Witnesses are requested to briefly summarize their written statements with the understanding that a more detailed statement may be included in the printed record of the hearing. This process will afford more time for Members to question witnesses. In addition, witnesses may be grouped as panelists with strict time limitations for each panelist. In order to assure the cost productive use of the limited amount of time available for questions, witnesses appearing before the Subcommittee are required to submit 100 copies of their prepared statements to the full Committee office, Room 1102 Longworth House Office Building, at least 24 hours in advance of their scheduled appearances. Requests to be heard must contain the following information: (1) The name, full address, and capacity in which the witness will appear, as well as a telephone number where he or his designated representative may be reached; (2) A list of any clients or persons, or any organization for whom the witness appears; and (3) A topical outline or summary of the comments and recommendations in the full statement. The above information should also be incorporated in the prepared statements to be presented in person as well as those filed for the printed record of the hearing. WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE Persons submitting a written statement in lieu of a personal appearance should submit at least six copies of their statement, by close of business, Friday, July 27, 1984, to John J. Salmon, Chief Counsel, Committee on Ways and Means, U.S. House of Representatives, Room 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements for the the record of the printed hearing wish to have their statements distributed as to the press and the interested public, they may provide 75 additional copies for this purpose to the Committee office before the hearing begins. Chairman GIBBONS. Good morning ladies and gentlemen. As everyone knows, this is a meeting of the Subcommittee on Trade of the Committee on Ways and Means. This morning we have a hearing on the wine equity legislation. This is really a continuation of hearings that we began last November. We are seeking ways to reduce foreign barriers to trade and to expand the export market opportunities for U.S. wine producers. We are focusing on the bill H.R. 3795. introduced by our colleague, Mr. Coelho. Since then, a new proposal has developed seeking to remove criticisms of the original bill. Congressman Coelho and his panel will lead off this morning and Ambassador Brock will present the overall administration position. Gentlemen, why don't you go right ahead and proceed. I want to welcome all of you here this morning. It's a pleasure to see you. STATEMENT OF HON. TONY COELHO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. COELHO. Thank you, Mr. Chairman. Thank you for calling these hearings, a chance to present to you the different groups. I would like my statement just to be made a part of the record and I know that some of my colleagues have some hearings that they must attend to. I would like to let them go first. I would just like to say, Mr. Chairman, that I know that some witnesses will point out that the wine industry is not together. I would like to point out to you and other members of this subcommittee if they look at the record that the only part of the industry that is not together is that industry that imports and they may own some domestic wineries but their main business is importing. The domestic wine industry is totally united. The soybean people were opposed to the original bill. We have met with them and have reached a compromise so that we are all together. This bill basically, the compromise basically does not force the administration to do much except to follow through on things that it finds as a result of its investigations. We think it's a fair approach. It does have the total support of the domestic wine industry and full support of the Soybean Association, which originally was opposed. So we are very pleased with the compromise and would hope that the subcommittee would proceed. I would like to introduce my colleague from New York, Mr. Horton, who does have another committee meeting and asked that he may be first. [The prepared statement follows:] STATEMENT OF HON. TONY Coelho, a ReprESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. Chairman, I would like to sincerely thank you for holding this additional hearing on H.R. 3795. I certainly appreciate the attention that you have given this bill and the recently reached compromise which resulted in creating the Wine Equity and Export Expansion Act of 1984. I have attached a copy of this compromise to my testimony which I would like to submit to the Subcommittee to be included in the record. As I am sure you know, Mr. Chairman, numerous agricultural interests were concerned that the original version of H.R. 3795 may result in affecting their trading agreements. These interested parties have reached a compromise and ironed out their differences. In fact, the American Soybean Association, the Wine Institute, and the American Grape Growers Alliance for Fair Trade are now strongly in support of this measure. I would at this time like to submit a copy of a letter which I received from the American Soybean Association which reads, "The American Soybean Association is pleased to indicate its support for the proposed substitute for the original Wine Equity Act." I believe that this recently attained compromise is GATT compatible and that it works is within our trade agreements made with other trading partners. Furthermore this legislation would ensure that growers would be allowed to be considered as part of the domestic industry on a consistent basis by the International Trade Commission when considering a case. Mr. Chairman, as I said in my previous testimony before this Subcommittee the U.S. wine producer and grape grower are not requesting any subsidies or government assisted programs. They are only requesting equity, fairness, and harmony in the wine and grape market. The domestic wine and grape producer has proved that he can produce some of the finest wines and grape products in the world. This quality, combined with an increased consumer demand should reflect an industry that is growing and increasing in sales. Unfortunately, the wine and grape producer in the United States has only seen formidable obstacles drawn against him while he is willing to share his own market with other producers. I strongly urge favorable consideration by this committee on this important legislation to allow the American wine and grape producer the opportunity to compete fairly in the market abroad. ASA WASHINGTON OFFICE, Hon. TONY COELHO, DEAR REPRESENtative Coelho: The Committee on Ways and Means is scheduled to hold a hearing on July 24 regarding H.R. 3795, the Wine Equity Act. The American Soybean Association appreciates this opportunity to comment on the legislation. The American Soybean Association is pleased to indicate its support for the proposed substitute for the original Wine Equity Act which has been developed through lengthy discussions among the Wine Institute, the American Grape Growers Alliance for Fair Trade, and ASA. We believe the compromise entitled the Wine Equity and Export Expansion Act of 1984 constitutes sound trade legislation which will benefit the wine and grape industries while protecting the export markets of U.S. soybean farmers. The substitute language would give the Administration the tools to address the legitimate concerns of the wine and grape industries as well as assisting the wine industry to expand its export markets through a joint market development effort with the Department of Agriculture. ASA commends the principal sponsors of the Wine Equity Act for their willingness to recognize the concerns of soybean farmers in the compromise legislation. We are pleased to endorse passage of the Wine Equity and Export Expansion Act of 1984. Sincerely, Enclosure. JOHN BAIZE, Washington Director. [H.R. 3795, 98th Cong., 2d sess.] A BILL To expand markets for United States produced wine through the harmonization, reduction, and elimination of barriers to trade in wine on a basis which assures substantially equivalent competitive opportunities for all wine moving in international trade, the promotion of wine in foreign markets, and for other purposes Be it enacted by the Senate and the House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the "Wine Equity and Export Expansion Act of 1984". SEC. 2. CONGRESSIONAL FINDINGS AND PURPOSES. (a) Congress finds that (1) there is a substantial imbalance in international wine trade resulting from the easy accessibility enjoyed by foreign wines to the American market which is in direct contrast to the export position of the American wine industry in virtually every existing or potential foreign market; (2) the lack of access to foreign markets and the continued low prices for wine and other grape products severly erode the economic position of winemakers and wine grape growers and all sectors that depend upon wine production; (3) the competitive position of United States produced wine in international trade has been weakened by foreign export subsidies, unfair trade practices, high U.S. interest rates, and unfavorable foreign exchange rates; (4) American wine producers seeking to market their products abroad are faced with a maze of restrictive and prohibitive tariff and nontariff barriers; (5) the United States government has failed to take positive action in previous multilateral trade negotiations to gain greater access to foreign markets for United States produced wine but at the same time has granted greater access to the United States market by lowering tariffs. Foreign wines move freely in the American market subject only to the same laws and regulations which apply to American wines and to payment of the lowest import duties assessed anywhere in the world by a significant wine-producing country on foreign wine; (6) wine consumption per capita is very low in many major non-wine producing markets and the demand potential for American wine is significant; (7) the United States winemaking industry has the capacity and the ability to export substantial volumes of wine and an increase in wine exports from the United States would create new jobs, improve this Nation's balance of trade, and otherwise strengthen the national economy; and (b) The purposes of this Act are (1) to provide wine consumers with the greatest possible choice of wines from wine-producing countries; |