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I want to welcome all of you to this year's annual trade conference. Since our first meeting six years ago, I've been honored to co-host this conference -- over the years with Senator Gorton -- and this year with Senator Cantwell.

We in Washington have a lot at stake when it comes to trade. Our jobs, our economy and our quality of life are all affected by our trade relationships. That's why it's so important that we have an organization like WCIT to stand up for our state throughout the year and at this conference to bring all of us together to talk about the issues of the day. So I want to start by thanking WCIT for all of its work hosting this conference.

We are all aware of the changes at WCIT. This is Bill Center's first conference as President. Bill, I welcome you and your leadership in our trade community. I also want to thank Pat Davis for her many years of service. One of the keys to WCIT's success has been its effective leadership. So I welcome Bill to that tradition, and I want to thank everyone on the staff who has made this conference possible.

Today, we're going to focus on trade in agriculture under the theme of our conference – Balancing Trade: Opening Markets and Supermarkets. And we are fortunate to have some very knowledgeable speakers and panelists with us today to share their insights. I want to thank them for being here. Before I go any further, I want you to know that today's conference would not be possible without great community support. I want to thank our contributing sponsors. Their names are all in your booklet, but I want to recognize them individually: Our Presenting Sponsor is Microsoft. Our three Major Sponsors are: Boeing, the Port of Seattle and Weyerhaeuser. Our Sponsors are the Bell Harbor Conference Center, Elway Research Company, Frank Russell Company, and Port of Tacoma. Our Co-Sponsors are Agilent Technologies, and The Seattle Westin. Finally, I'd like to thank our organizational co-sponsors who are listed in your program for their support and participation. Over the years, all of you have made this conference one of our state's leading forums on trade, and today we continue that tradition.

We have a very broad topic before us this morning, and I want to start by sketching out the landscape on trade. If we had this same topic last year, we would have had a much different discussion because the atmosphere on trade has changed, and I think we need to recognize that. I see the change on two fronts -- first, here at home. We in Washington are eager to trade. We know how important new markets are, but even here in Washington, support for broad trade initiatives is slipping a little. Producers in our state are facing very tough market conditions and that's eroding support for expanded trade. In fact, some commodity groups -- that have championed free-trade initiatives for years are now taking a more protectionist stance. Just look at the apple industry. When New Zealand apples are cheaper in Yakima, Washington than a Washington state apple, we know we've got a problem.

I am hearing from lots of Washington state producers. They're concerned that export markets are being squeezed. And they're hesitant to open our domestic market further unless we have real opportunities abroad. And that's the feeling here in Washington state where we know how important free trade is. Just imagine how the farm families in Kansas and Iowa are feeling.

So as market conditions have gotten worse, people are becoming more skeptical about big trade initiatives. And it's not just happening here in the U.S. Globally, countries are having a lot of trouble coming together and reaching a consensus to reduce trade barriers. And that's the second factor we face. Recently, it's been difficult to reach broad trade agreements. Just look at our stalled progress in WTO trade talks. During the Seattle Ministerial, regardless of what was happening outside, inside delegates could not reach a consensus on how to move forward. As usual, agriculture was a sticking point.

The WTO will meet again later this year, but I don't expect a new consensus to suddenly emerge. It's going to take a lot more work. We've got to keep pushing for good trade agreements, but in the short term I don't think we can rely on them exclusively to address issues like world hunger. So while trade has always been difficult, trade in agriculture is becoming even more complicated. Just look at all the challenges in Europe. They want to protect their small farmers. They're anxious about genetically-modified food. And they have a long tradition of supporting their farmers financially. Let's not forget that many in Europe are also very worried about how expanding the European Union will affect farmers. They haven't been able to deal with these issues in their own backyard let alone with the entire world. It's not just Europe. There are also problems in the developing countries. Many developing nations are behind in technology and production capacity. Many have a large share of poor, subsistence farmers. They want to protect those vulnerable farmers. And they're afraid that if they open their markets to the world's big producers, their small farmers will pay the price. On top of all those challenges throw in concerns about patents and intellectual property rights, and issues like environmental standards and food safety. With all that, it's easy to see why agricultural trade is very difficult for most countries.

So we're losing some support for free trade at home, and around the world, countries are having trouble reaching a consensus. It is a difficult climate. But I don't want to leave you with the impression that we're stuck. The truth is I see a lot of areas where we can make progress.

So I'd like to turn to two of those areas -- sanctions reform and foreign aid. Both of them offer a lot of potential for addressing issues like world hunger. For years, I have supported legislation to reform our sanctions policy. Often, when the United States is frustrated with another country, our first reaction is to impose sanctions. In some cases, they are warranted. But, in many cases, our unilateral trade sanctions have failed to achieve their political objective. All too often, they hurt the least fortunate people in the targeted country. I believe food should never be used as a weapon. We cannot forget that food sanctions haven't been very effective in meeting our political goals.

During the Cold War, we denied agricultural exports to the Soviet Union and to former Soviet states, but that policy didn't help end the Cold War. For more than 30 years, we've had a trade embargo with Cuba -- including a ban on food and medicine -- but that hasn't overthrown Fidel Castro. Of course, in Iraq, we have very real concerns about Saddam Hussein and his weapons program. But unfortunately, our sanctions have had their biggest impact on the Iraqi people and deaths from malnutrition and dehydration are all too common.

So as we look for ways to help the least fortunate in other countries, we can't forget that sanctions on food and medicine often have a bigger impact on the people at the bottom of the economic ladder than on the political leaders at the top.

Finally, I want to briefly mention our country's foreign assistance to the world. We fund a number of great programs including food assistance programs that benefit targeted countries and our own country. There are other programs like UNICEF, health initiatives to combat AIDS, tuberculosis, and other illnesses, and numerous programs to encourage economic development. We do great work abroad. But you may be surprised to learn that our foreign assistance programs represent less than one percent of the federal budget – less than one percent. Virtually every developed country in the world is more generous than the United States. We are the most prosperous people on the planet, yet we do far less on behalf of the most needy countries. When it comes to opening markets and addressing trade barriers, I think we could provide better leadership as a country through our foreign assistance. We have to recognize that foreign assistance can be a real catalyst to addressing in the long term some of the problems we will talk about today. We don't mind spending billions of dollars to defend our interests abroad. We need to recognize that increased levels of U.S. foreign assistance are also in our national interest. Now I hope in talking about these issues, I have not sounded too many alarms. There are enormous challenges confronting our country and the community of nations in dealing with agriculture. But I'm proud that Washington state is well positioned to be front and center in all of these global debates. Our producers are eager for new markets, and our production potential is enormous. We have great local organizations from WCIT and the National Bureau of Asian Research, to the Foundation for Russian-American Economic Cooperation, and our great universities. We want to be part of the solutions to the issues we're raising today, and we're ready to make our contribution.

So in closing, I want to again thank WCIT for being a catalyst in our community for this discussion. I'm excited to again participate in the Elway electronic polling. And I look forward to the presentations from our panelists. As I conclude, I want you to know that our discussion does not end today. At last year's conference, we focused on corporate social responsibility. That conference generated an enormous amount of interest on the part of Washington's business community. I am especially pleased to report that the Council was able to galvanize that enthusiasm by launching a series of roundtable discussions that brought together businesses, the public sector and NGO's. These roundtables are ongoing. If you're interested in participating, please contact the Council for more information. I hope today's conference generates a similar and sustained effort in our community to address the many issues discussed here today. We've got a lot of challenges, but we're also well-positioned to address them. I want to thank you for being here today and helping us find solutions.