The Fence Post | 19 March 2019
Wheat farmers welcome new export opportunity from Trump Administration sgreement with Brazil
WASHINGTON — U.S. Wheat Associates and the National Association of Wheat Growers welcome today’s announcement by President Trump and Brazilian President Jair Bolsonaro that Brazil has agreed to implement a duty-free tariff rate quota (TRQ) for wheat, a longstanding obligation under Brazil’s World Trade Organization commitments. This agreement opens an annual opportunity for U.S. wheat farmers to compete on a level playing field for 750,000 metric tons (about 28 million bushels) of wheat under the TRQ.
"We are grateful to the Trump Administration for championing the interests of U.S. farmers and specifically to Chief Agricultural Negotiator Gregg Doud and USDA Under Secretary Ted McKinney for prioritizing the issue of Brazil’s TRQ commitment," said Chris Kolstad, USW Chairman and a wheat farmer from Ledger, Mont. "This new opportunity gives us the chance to apply funding from the Agricultural Trade Program and other programs to build stronger relationships with Brazilian millers and a more consistent market there for U.S. wheat."
Brazil was the largest wheat importer in Latin America and the fourth largest in the world in marketing year 2017/18. Most imports originate duty-free from the Mercosur countries of Argentina, Paraguay and Uruguay. Wheat from all other origins requires payment of a 10 percent duty. Brazil agreed to open the TRQ to all origins, including the United States, in 1995, but then notified the WTO that it wanted to remove the TRQ. Those negotiations were never concluded. Brazil did open the TRQ temporarily in 2008, 2013, and 2014 when there was a shortage of wheat within Mercosur. During those years U.S. wheat made up more than 80 percent of imports from outside Mercosur.
"This is a big win for U.S. wheat farmers, the Trump Administration, and members of Congress who have pushed for action on this issue," said Ben Scholz, NAWG President and a wheat farmer from Lavon, Texas. "I’m glad to see Brazil fulfill its commitment and look forward to a stronger trading relationship between us. When countries remain in compliance with the WTO, like we see here, it creates a level playing field for wheat for both countries."
In some years, Brazil has imported as little as 115,000 metric tons of U.S. hard red winter and soft red winter wheat. That is why USW has worked toward implementation of Brazil’s wheat TRQ for a decade. USW plans to invest export market development funding in technical support and trade servicing to help demonstrate the quality and value of U.S. wheat for millers and bakers.