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Articles of Interest- Monday, April 22, 2019

Articles of Interest- Monday, April 22, 2019

WTO Finds China Breaches Grain TRQ Commitment

World-Grain – 04/19/2019

The World Trade Organization (WTO) dispute settlement panel ruled China has administered its tariff-rate quotas (TRQs) for wheat, corn, and rice inconsistently with its WTO commitments.  Contrary to those commitments, China’s TRQ administration is not transparent, predictable, or fair, and it ultimately inhibits TRQs from filling, denying U.S. farmers access to China’s market for grain. In August 2017, the United States requested that the WTO establish a dispute settlement panel to consider whether China administers its TRQs for long-grain rice, short- and medium-grain rice, wheat, and corn in a manner inconsistent with its WTO commitments…The U.S. Wheat Association (USW) urged China to comply with WTO agreements. “With these decisions, we call on the Chinese government to come into compliance with the rules it accepted when it joined the WTO,” said Vince Peterson, president of USW. “The world now sees that their policies stifle market-driven wheat trade, block export opportunities and force private sector buyers and consumers to pay more than they should for milling wheat and wheat-based foods. We appreciate that the Trump administration continues to shine a light on these distorting policies by supporting the WTO dispute cases.”

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U.S.- Japan Trade Talks Encourage Wheat Industry

Capital Press – 04/19/2019

Wheat industry representatives say they hope new trade talks between the U.S. and Japan will lead to an agreement that will restore certainty to a critical market for their crop.
U.S. Trade Representative Robert Lighthizer met with Japanese Economic Revitalization
Minister Toshimitsu Motegi April 15-16 in Washington, D.C., to continue negotiations on a
new United States-Japan trade agreement. They discussed trade issues involving a variety of
commodities and products, including agriculture. Lighthizer and Motegi agreed that the U.S. and Japan will meet again in the near future to continue talks, according to the USTR.
Glen Squires, CEO of the Washington Grain Commission, said reports from Japan indicate the two countries would set tariff reductions at the level in the Trans-Pacific Partnership…
“We’re encouraged … it’s a start,” said Steve Mercer, vice president of communications for U.S Wheat Associates, the overseas marketing arm for the industry. “We don’t quite know where the path is going yet, but the pace we think is going to pick up because there are new meetings scheduled. Negotiators are well aware of the challenges for the U.S. wheat industry created by TPP, and the advantages that deal gives Canadian and Australian competitors, Mercer said.

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Argentina’s Farmers Turn Cool on their Man Macri

Reuters – 04/22/2019

Argentine President Mauricio Macri rode to power in 2015 promising to bolster the farming sector and cut back taxes that had stymied exports. The country’s backbone industry welcomed him with open arms after years of export controls aimed at keeping domestic prices low. The powerful sector is now cooling on the center-right president, frustrated by revived export tariffs and sky-high borrowing rates that have bruised smaller farmers, a concern for Macri ahead of national elections later in the year. Argentina’s farming sector, which brings in more than half of the export dollars in South America’s second-biggest economy, is a key barometer for Macri, who has sold himself as a champion of business and industry, none more so than the country’s huge soy, wheat and corn farms…After Macri’s election in 2015 he eliminated export taxes on corn and wheat and lowered those for soy; he also got rid of limits on corn and wheat exports – gaining cheers from farmers. However, an acute financial crisis last year forced Macri to take a $56.3 billion lifeline from the International Monetary Fund (IMF), in return pledging to balance the country’s deficit – including restarting taxes on exports.

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U.S. Wins WTO Ruling Against China Grain Import Quotas

Reuters – 04/18/2019

The United States won a World Trade Organization (WTO) ruling on Thursday against China’s use of tariff-rate quotas for rice, wheat and corn, which it successfully argued limited market access for U.S. grain exports. The case, lodged by the Obama administration in late 2016, marked the second U.S. victory in as many months. It came amid U.S.-China trade talks and on the heels of Washington clinching a WTO ruling on China’s price support for grains in March. A WTO dispute panel ruled on Thursday that under the terms of its 2001 WTO accession, China’s administration of the tariff rate quotas (TRQs) as a whole violated its obligation to administer them on a “transparent, predictable and fair basis”…In a statement, U.S. Trade Representative Robert Lighthizer and Secretary of Agriculture Sonny Perdue welcomed the decision, saying China’s system “ultimately inhibits TRQs from filling, denying U.S. farmers access to China’s market for grain”. If China’s TRQs had been fully used, $3.5 billion worth of corn, wheat and rice would have been imported in 2015 alone, it said, citing U.S. Department of Agriculture estimates.

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Wheat Buyers from Morocco and Tunisia Visit Kansas

Kansas Ag Connection – 04/19/2019

Wheat buyers from Morocco and Tunisia got an up close look at the intricacies and reliability of the U.S. grain infrastructure during the April 12-19 Cochran Fellowship Program’s experience in Kansas and Texas. Morocco and Tunisia are part of the Middle East-East and North Africa (MEENA) region which has the largest volume of wheat imports from all origins. While market share in the MEENA region has fallen, there are several expanding end use market segments that hold promise for U.S. wheat. These niche products include specialty artisan and frozen doughs and pre-mixes, pasta from non-durum flour, and growing biscuit, cracker and confectionary products. These products need the high or low protein (depending on the product) wheat with the high quality traits that American wheat is known for. “While it’s unfortunate that U.S. market share in the MEENA region has dropped due to increased competition, there are some real opportunities for us in those specialty products,” said Aaron Harries, Vice President of Research and Operations for Kansas Wheat. “The U.S. wheat industry has to remain visible to those buyers in order to capitalize on these emerging opportunities, and bringing the Cochran Fellows to Kansas is a great way to do that.”

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Source: U.S. Wheat Associates