USTR: China lifts poultry ban, Brazil implements wheat TRQ
In positive news for U.S. farmers, U.S. Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue announced Thursday that China has lifted its ban on poultry imports from the United States and that Brazil has implemented an annual duty-free tariff rate quota (TRQ) of 750,000 metric tons (MT) of wheat imports.
China’s decision “is great news for both America’s farmers and China’s consumers,” Lighthizer said.
“After being shut out of the market for years, U.S. poultry producers and exporters welcome the reopening of China’s market to their products,” Perdue added.
Lighthizer and Perdue noted in a joint release that China had banned all U.S. poultry in January 2015 due to an avian influenza outbreak the month before, and has kept the ban in place since then, even though the United States has been free of the disease since August 2017. The United States exported over $500 million worth of poultry products to China in 2013.
“This action represents a significant opportunity for U.S. chicken and turkey producers,” the National Chicken Council said in a news release.
“At its peak, the annual value of poultry exports from the U.S. to China was $71 million for turkey and $722 million for chicken,” the NCC said.
“Renewed access to the Chinese market could result in $1 billion annually for chicken paws alone and, due to China’s meat protein deficit as a result of African Swine Fever, there could be as much as another $1 billion of potential exports of other chicken products, including leg and breast meat. Turkey exports could generate another $100 million in sales and poultry breeding stock at least $60 million more.”
Lighthizer and Perdue noted in a separate joint release that Brazil committed to implementing a 750,000 MT duty-free TRQ for wheat imports when it acceded to the World Trade Organization in 1994, but had failed to follow through until Brazilian President Jair Bolsonaro made a public announcement when he met with President Donald Trump at the White House in March.
“This solution to a long-standing problem is a result of the administration’s advocacy for American farmers and will allow our wheat exporters to compete on a level playing field,” said Lighthizer.
Perdue said, “American farmers can compete with anybody when given access to customers. This is why we are working tirelessly to knock down barriers to our exports, like high Brazilian tariffs on our wheat.”
USTR added, “The duty-free TRQ will provide stable and predictable access to a market where U.S. wheat exporters have long had ready Brazilian customers. Prior to implementation of this TRQ, U.S. wheat typically entered Brazil at an applied 10 percent duty, in comparison to wheat from Brazil’s Mercosur customs union trade partners, particularly Argentina, which enters duty-free.”
“Brazil is a quality-focused wheat market and its flour millers recognize that U.S. wheat can help them better meet their customers’ needs,” said Vince Peterson, president of U.S. Wheat Associates, an export group.
“Opening the TRQ will give those millers more consistent access to our wheat classes while still having the option to source from other countries. That is how the market should work and we welcome this opportunity.”
USW noted that Brazil is the fourth largest wheat importer in the world, but said Argentina and other countries in the Mercosur agreement — the South American trade bloc — have had a competitive advantage with mostly unlimited duty-free access to the market.
USW added, “Wheat imports from countries outside the Mercosur agreement, including the United States, are subject to a 10% tariff. However, USW has always conducted activities in Brazil to keep its millers and bakers informed about the quality and value of U.S. wheat.
As a result, when Brazil opened provisional TRQs in 2008, 2013 and 2014 because its Mercosur partners had wheat supply challenges, U.S. HRW and SRW made up more than 80% of imports.”
–The Hagstrom Report
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