Trump, Bolsonaro talk potential wheat, pork, beef trade
March 21, 2019
After President Donald Trump and Brazilian President Jair Bolsonaro announced Tuesday that Brazil has agreed to implement a duty-free tariff rate quota (TRQ) for wheat, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) said they were pleased that Brazil would live up to "a longstanding obligation" under its World Trade Organization (WTO) 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," the wheat groups said.
"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 Undersecretary 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."
The groups said, "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.
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"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."
In a statement, the White House said, "President Bolsonaro announced that Brazil will implement a tariff rate quota, allowing for the annual importation of 750 thousand tons of American wheat at zero rate."
"In addition, the United States and Brazil agreed to science-based conditions to allow for the importation of United States pork. In order to allow for the resumption of Brazil's beef exports, the United States agreed to expeditiously schedule a technical visit by the United States Department of Agriculture's Food Safety and Inspection Service to audit Brazil's raw beef inspection system, as soon as it is satisfied with Brazil's food safety documentation.
"The presidents instructed their teams to negotiate a mutual recognition agreement concerning their trusted trader programs, which will reduce costs for American and Brazilian companies."
The United States Cattlemen's Association said it "remains strongly opposed to any reopening of beef trade with Brazil."
The group noted that FSIS audited the Brazilian beef industry in 2017 due to "a high number of rejected exports from the country attempting to make their way into our borders."
In total, over 1.9 million pounds of Brazilian beef product has been rejected, it said, due to "public health concerns, sanitary conditions, and animal health issues."
"The final audit report included horrific examples of a lack of equivalent food safety standards and protocols, at even the most basic level," USCA said. "Brazil has consistently shown to be a bad actor in the global marketplace."
–The Hagstrom Report