Each year, the Office of the U.S. Trade Representative (USTR) publishes the National Trade Estimates (NTE) report. This report compiles detailed trade barriers that U.S. exporters, including wheat farmers, are facing in markets around the world.
To compile this report, USTR solicits input from export stakeholders to provide details on the specific trade barriers they are facing. Each year, U.S. Wheat Associates (USW) gathers and submits to USTR information from our overseas offices, customers, and other policy information sources in order to paint a full picture of the trade barriers U.S.-grown wheat faces in overseas markets.
Turkey’s Incomplete Subsidy Reporting
USW’s most recent NTE submission to USTR for 2023 reporting can be found here. The submission provides an overview of all key trade barriers that inhibit competitive U.S. Wheat exports in markets around the world. This is a critical annual opportunity for U.S. Wheat farmers to provide USTR with new and updated information with the goal to address these trade barriers to the greatest extent possible in the coming year.
While some issues USW submits for the NTE report may show incremental progress over time, other areas provide critical, timely feedback on changes in the trade barrier landscape. This year, in addition to other global barriers, USW included an up-to-date review of Turkey’s trade distorting subsidy practices.
Turkey is Non-Compliant
Turkey maintains a web of substantial domestic support programs that incentivize the overproduction of Turkish flour, which can then be dumped into overseas markets below global price levels. This dumping of heavily subsidized Turkish flour displaces domestic milling industries, and in turn, U.S. wheat exports. In this year’s NTE submission, USW updated data on Turkish domestic price supports to show that while these subsidies still exist, Turkey has failed to properly disclose them to the World Trade Organization (WTO). In fact, while Turkey has recently caught up with many of their required WTO subsidy notifications (although they have still only notified through 2016), they make no mention of wheat price supports.
“The support price is up slightly from last year and still provides an extraordinarily strong price signal to Turkish farmers that is well above global market prices and keeps Turkey noncompliant with its WTO commitments. Turkey needs to be transparent and pushed to submit timely and accurate notifications that cover all programs, including product-specific input subsidies that are available to wheat farmers.” – From USW NTE Submission for 2023
In addition to updates on Turkey’s data discrepancies, USW has also identified and detailed a previously unreported freight subsidy further incentivizing flour exports. This subsidy is provided as a cash refund to exporters for the transportation of wheat flour. Formal documentation of the subsidy is limited, and once again, Turkey does not detail this practice in their annual notification to the WTO.
USW will continue to work closely with USTR to better understand and document how this practice, and other subsidies, distort multiple major export markets for U.S. wheat farmers. USW estimates that eliminating unfair competition from cheap Turkish flour exports would increase returns to U.S. wheat producers by $100 million to $500 million per year.
By Peter Laudeman, USW Director of Trade Policy