U.S. Wheat Associates (USW) welcomed Phase 1 of the U.S.-China agreement announced in January 2020 (see links below). The agreement has additional rules governing China’s tariff rate quota (TRQ) administration. Chinese policies have long restricted the use of the wheat TRQ, which eventually led to the U.S. case at the World Trade Organization (WTO) challenging those policies. The new TRQ provisions should ensure better TRQ usage and allow more Chinese millers to access U.S. wheat supplies.

While the deal did not directly lift retaliatory tariffs on U.S. agricultural products, it did open a path for importers to apply for exemptions. This led to the re-opening of China’s imports of hard red winter (HRW), hard red spring (HRS) and soft white (SW) wheat, which were increasing before China implemented the tariffs in March 2018.

The United States won two cases filed against China at the WTO. In late 2016, the United States took a case against China at the WTO on unfair domestic support and market access that distort the market and disadvantages U.S. wheat, corn and rice producers. The U.S. wheat industry depends on favorable resolutions to these disputes and other trade negotiations with China.

Read U.S. Wheat Associates commentaries:

Phase One Trade Deal Should Restore China’s Demand for U.S. Wheat

One Year Later – Phase One Trade Deal with China Producing Results for U.S. Wheat

Revised China Tariff Quota Rules Could Have a Significant Impact on U.S. Wheat Exports

Chinese Government Grain Policy TRQ Dispute Moving Ahead

The United States and the European Union (EU) attempted to negotiate an FTA called the Transatlantic Trade and Investment Partnership (TTIP) between 2013 and 2016. TTIP talks have since stalled, and the United States has agreed to separate negotiations with the United Kingdom (UK) and the remaining 27 members of the EU.

U.S. Wheat Associates has submitted comments on negotiating objectives for the proposed U.S.-UK agreement and U.S.-EU agreement.

U.S. wheat has also been subject to tariffs in the large but unrelated civil aircraft case at the WTO. Those tariffs are currently on hold as part of a five-year-truce negotiated by the Biden administration. Read more about these tariffs at:

Can An Aircraft Dispute Resolution Open Wheat Trade with Europe?

EU Hits HRS Imports with Punitive Tariffs; Durum Trade Remains Open

The World Trade Organization (WTO) provides a framework for trade negotiations, settling trade disputes, and transparency of trade measures for more than 160 WTO member countries. These elements create a more predictable environment for buyers and sellers engaged in global wheat trade.

Particularly crucial for wheat trade is the WTO “Agreement on Agriculture” and “Sanitary and Phytosanitary (SPS) Agreement.” These agreements govern domestic support programs, import tariffs, tariff-rate quotas, phytosanitary measures, export subsidies and several other aspects of agricultural trade.

U.S. Wheat Associates’ priority for WTO negotiations is to improve market access for the wheat industry by lowering tariffs and removing non-tariff barriers. Another priority is to address the rise of non-compliant domestic support in developing countries, such as the China domestic support case and the India counter-notification.

While the failure of the Doha Round means countries need to reassess how to move multilateral trade negotiations forward, the WTO remains an important institution to provide transparency, settle disputes and liberalize trade. Read more on the WTO at:

U.S. Agricultural Organizations Ask for Positive Reforms at the World Trade Organization

Industry Letter to U.S. Trade Representative Katherine Tai and Secretary of Agriculture Tom Vilsack

Currently, the United States has 14 active free trade agreements (FTAs) covering 20 countries, most of which are net wheat importers. Click here for a list of completed U.S. free trade agreements.

U.S. Wheat Associates has always supported negotiating new trade agreements as the best way to lock in duty-free access while preventing competitors from gaining preferential advantages. However, less than 40% of U.S. wheat trade is covered under FTAs, underscoring the need for new negotiations with new FTA partners.