Opening Remarks for Senator Thad Cochran
(As prepared for delivery)
U.S. Senate Committee on Agriculture, Nutrition and Forestry
Hearing on “Smithfield and Beyond: Examining Foreign Purchases of American Food Companies”
July 10, 2013
Madam Chairwoman, thank you for holding this hearing today on an important topic.
The transaction between Smithfield Foods and Shuanghui International Holdings Limited marks the largest proposed acquisition of a U.S. company by a Chinese company to date. The U.S. economy has a long history of benefiting from foreign investment, and if finalized, I hope that will be the case with this proposed transaction.
The United States has a process in place to ensure that foreign acquisitions of U.S. firms do not pose risks to American national security interests. The process involves a thorough review by the Committee on Foreign Investment in the United States, known as CFIUS.
I understand that the parties involved in the Smithfield-Shuanghui deal have voluntarily agreed to this government review. This review process must be comprehensive and take into account the full range of national security interests, including food safety.
American agriculture production is the best in the world, and we enjoy the world’s safest, most efficient and reliable food supply. U.S. agricultural exports have outpaced agricultural imports since 1960, generating a trade surplus in American agriculture for over fifty years.
The Chinese market is important for farmers of cotton, soybeans, and other crops grown in Mississippi. In fact, China is currently the largest market for U.S. agricultural exports, and the United States is China’s largest supplier of agriculture products, according to the USDA Economic Research Service. However, trade is a two-way street. China is the fifth largest supplier of agriculture products to the U.S.
Ninety-eight percent of the world’s customers live outside U.S. borders, and it is in the best interest of the American people to encourage active participation in the global marketplace. Foreign-based companies have invested over $32 billion in the U.S. food industry and $3.5 billion in American agriculture – creating and sustaining good paying jobs for U.S. workers, farmers, and ranchers. All of these operations, regardless of ownership, fall within the regulatory oversight of agencies such as the U.S. Department of Agriculture and the Food and Drug Administration.
It is important to note that rule of law, transparency, and science-based standards foster growth, strengthen international relationships, and help feed the world.
Often China maintains unscientific sanitary and phytosanitary standards that unfairly block American producers from the Chinese marketplace – despite scientific evidence confirming the safety of American practices and products.
If finalized, I hope the transaction between Smithfield and Shuanghui will strengthen China’s commitment to market- and rules-based engagement with the global economy.
I welcome the opportunity to hear from this distinguished panel of witnesses. Madam Chairwoman, thank you for holding this hearing today.