Dispute cases in the World Trade Organization (WTO) take a notoriously long time to resolve, but there seems to be at least an outside chance one of the longest-running disputes affecting wheat trade could be nearing its last chapter. Three months ago, the United States and the European Union paused their respective punitive tariffs to work toward a negotiated solution in the long-running civil aircraft dispute over subsidies – often referred to as the Airbus/Boeing disputes. That détente temporarily ended tariffs on non-durum U.S. wheat imports.

Now the two governments are set to meet at a major summit next week, where trade, including the aircraft dispute, is expected to be a major topic.

High Hopes

The optimists have had high hopes for an aircraft dispute resolution since the Biden Administration took office. The campaign rhetoric included reinstating international partnerships and rebuilding multilateral institutions. The aircraft dispute even got major billing on Capitol Hill during then-USTR nominee Katherine Tai’s confirmation hearing. When asked about the potential for a resolution, she wittily quipped that “I would very much be interested in figuring out … how to land that particular plane.”

Both sides have been mum about details of what a resolution might look like, with only until July 11 before tariffs are set to snap back into place.

On The Other Hand

This leads us to the other side, where the cynics (your author included) strongly supported the four-month tariff suspension but know how hard it is to resolve such an intractable dispute in such a short time. The slow pace of confirming political nominees at USTR supports that opinion. The agency has an incredible team of career staff, and Ambassador Tai is quite capable of resolving the dispute. But will that be enough to tips the scales in favor of a long-term resolution? In search of an answer for that question, all eyes turn toward the upcoming U.S.-EU summit, slated for mid-June in Brussels.

Working toward a civil aircraft dispute resolution is one of many topics between the two governments. But the outcome will provide an early test of the Biden administration’s ability to find a trade policy solution that reopens markets and meets its self-stated priority for a “worker-centric trade policy.”

Wheat Trade Needs More Certainty

Industries like those engaged in the wheat trade on both sides of the dispute need predictability. A four-month delay may provide a boost of urgency to negotiators. Still, such short-term delays are challenging for flour mills and wheat exporters alike, leaving both with only uncertainty.

For example, if tariffs return, will shipments in transit be exempt? What about supplies contracted but not yet “on the water?” If a mill agrees to supply a specific flour customer, will they be able to purchase the wheat to meet those flour specifications?

If it becomes clear that no long-term resolution is possible ahead of the July 11 end of the tariff pause, negotiators would be widely praised by industry for quickly announcing an extension of the duty suspension.

Whether or not a permanent aircraft dispute resolution will be found is hard to predict. U.S. hard red spring wheat farmers will be watching the outcome closely, as will their valued European customers, anxious for the return of days when weather and prices were easier to predict than government barriers to trade.

By USW Vice President of Policy Dalton Henry


Trade Promotion Authority (TPA) is a key trade negotiation tool. TPA is due to expire in the U.S. in a month, posing serious challenges for ongoing negotiations important to wheat growers.

TPA is commonly called “fast track authority” because of its provisions to speed Congressional approval of trade agreements that were negotiated and agreed to by the administration of a sitting U.S. President. It has been granted to every presidential administration since Franklin D. Roosevelt and is, in effect, a tool to instill confidence in U.S. trading partners. It is crucial to advancing negotiations because under TPA, other countries would be less hesitant to make commitments in a negotiation fearing that a final agreement could be amended by the U.S. Congress.

While there is still time for Congress to extend TPA before the current expiration on July 1, 2021, there has been little discussion of renewal and the Biden Administration has not yet asked Congress to extend the authority. In reality, TPA has already expired because any newly negotiated free trade agreements (FTA) have a 90-day notification requirement. So even if a new agreement were notified today, it would eclipse the existing TPA authority by two months.

Before the current administration took office, the United States was negotiating free trade agreements with Kenya and the United Kingdom (UK) under Trade Promotion Authority. Agreements with both countries present opportunities to expand U.S. wheat exports.

UK Trade

Buyers in the UK import mainly hard red spring (HRS) wheat from the U.S., due to prohibitive tariffs on medium and low-protein wheat and large domestic production of soft wheat. The U.S. supplies around 20% of the UK’s wheat imports. An FTA between the U.S. and the UK could give buyers greater access to additional U.S. wheat classes. After the UK officially left the European Union customs union at the start of 2021, it is now able to negotiate its own trade agreements. Due to the strong relationship and opportunity to increase wheat options for UK millers, an FTA between these two large economies should be a major priority.

Kenya Trade

Following the resolution last year of a sanitary/phytosanitary trade issue, there is more opportunity for U.S. wheat to enter the Kenyan market. Allowing favorable trade terms for U.S. wheat into this African country would make U.S. wheat more competitive with European and Black Sea wheat. An FTA with Kenya could serve as a model for future agreements with other African countries, which is important, as the continent is growing both in population and in food demands.

TPA Benefits

Almost all U.S. free trade agreements have been concluded with TPA in place. For example, the previous renewal of TPA enabled the renegotiation of the North American Free Trade Agreement (NAFTA), now known as the U.S.- Mexico- Canada Agreement (USMCA) and the U.S.- Japan Trade Agreement. Both agreements benefited wheat producers and their offshore customers significantly.

There has also been chatter among pro-trade folks in Washington about the potential of the United States rejoining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP). Joining CPTTP would allow U.S. wheat level access to Vietnam in the Asian region and to any other country added to the bloc. Securing TPA would greatly encourage the idea of joining CPTTP and provide an effective consultation process with Congress and, eventually, a streamlined vote.

USW Supports TPA

More than 50% of U.S. wheat production is exported every year so creating new market access, secured through free trade agreements, is critical to U.S. wheat competitiveness. USW highlighted the importance of TPA in comments to the United States International Trade Commission (USITC) in 2020 and continues to support its renewal.

By Shelbi Knisley, Director of Trade Policy


By Shelbi Knisley, Director of Trade Policy

The Office of the U.S. Trade Representative (USTR) released its annual National Trade Estimates (NTE) report March 31, 2021, which highlights U.S. trade barriers across various industries including U.S. wheat. The 2021 NTE features reports on more than 60 counties.

U.S. Wheat Associates (USW) submitted comments in late 2020 to USTR to be considered for the NTE. Although not all the trade issues USW raised made it into the final report, USTR does highlight several ongoing issues as well as some resolved long-standing issues for U.S. wheat.


In the NTE report, USTR noted that the Brazilian government opened its 750,000 metric ton tariff rate quota (TRQ) for wheat imports outside of MERCOSUR. The TRQ was opened in 2019 and then increased in 2020. Having the TRQ open outside of MERCOSUR countries is welcoming news for U.S. wheat producers, as it helps U.S. wheat to compete based on quality and value in the Brazilian market.


The U.S. government continues to monitor China’s compliance on its TRQ allocation. After losing a World Trade Organization (WTO) dispute case brought by the United States, China agreed to follow its commitment on a TRQ allocation of 9.64 million metric tons (MMT) of wheat. Before the WTO case and the U.S.- China Phase 1 agreement, China had never filled its TRQ for wheat despite conducive market conditions. Over the last year, China has made significant wheat purchases and USDA Foreign Agricultural Service estimates China’s wheat imports at 10.5 MMT for marketing year 2020/21. The NTE also highlights China’s inability to comply with its domestic support obligations on wheat, rice, and corn production following a WTO dispute brought by the United States in 2016.


The NTE highlights a major trade policy issue with the Indian government maintaining market distorting domestic support policies. Those policies encourage Indian farmers to produce excess amounts of wheat, distorting markets through large domestic crops and suppressing global prices. When domestic stocks get too large, India has exported the excess supplies in the market at low prices. A study by Texas A&M University economists estimates that U.S. wheat production value would increase by $516 million per year by 2028/29 if India eliminated these subsidy policies.


The NTE also included information about a 2020 win for U.S. wheat farmers that helped resolve a sanitary-phytosanitary (SPS) barrier related to the plant disease Flag Smut and Pacific Northwest wheat exports to Kenya. This is an issue that USW has been working to resolve for many years. Please read more about it here.

USW is encouraged to see USTR highlight the important trade barriers, as well as the successful resolution of several trade barriers for U.S. wheat exporters. The full 2021 National Trade Estimates report from USTR can be found here.


Last week U.S. wheat farmers and their customers across the Atlantic welcomed news of a temporary truce in the drawn-out tariff war resulting from unrelated aircraft dispute cases. This week’s published announcements officially suspended 25% retaliatory tariffs on U.S. hard red spring (HRS) imports by the United Kingdom (UK) and European Union (EU) for four months, reopening trade temporarily.

The reprieve comes just as the U.S. Senate confirmed President Biden’s nominee for chief trade negotiator, Katherine Tai. When Ambassador-designate Tai takes office, among her first challenges will be finding a long-term resolution to one of the largest disputes ever mediated by the World Trade Organization (WTO).

Back and Forth

The aircraft dispute refers to a pair of WTO dispute cases filed in 2004. First, the United States challenged EU subsidies for Airbus, and the EU followed suit with a challenge against certain states’ support for Boeing. Both won their respective cases. After years of back and forth, the United States and EU also received authorization to apply retaliatory tariffs (the WTO’s means of enforcement in disputes) in 2020.

While the reprieve is welcome news to U.S. farmers and their customers, many are still cautious. With parties on both sides of the issue dug in, the four-month window for the tariff suspension is likely not long enough to solve the dispute. Ambassador-designate Tai received many questions on the subject as part of her confirmation hearing. Senators representing wheat states voiced concerns about retaliation, while senators representing manufacturing states want to keep the pressure on the EU to repeal its Airbus subsidies.

Post-Brexit Complications

The UK’s recent departure from the EU further complicates the dispute’s outcome. U.S. retaliatory tariffs have the UK in the crosshairs as a major Airbus supporting country. These tariffs have hit UK products such as scotch whiskey particularly hard. The UK has made it clear it wants to resolve the dispute, offering last December to unilaterally drop its retaliatory tariffs on U.S. products as an act of goodwill. However, the United States and EU insist the UK lost its right to retaliate upon its bloc departure. Should a long-term resolution prove unattainable, it seems likely the WTO will have to resolve the question of UK retaliation.

Unfortunately, the aircraft dispute is far from the only irritant between the United States and the EU. Since early in the Trump Administration, the United States has maintained tariffs on EU steel and aluminum exports based on national security. Several EU countries have pressed ahead with digital service taxes that largely target U.S. tech companies. These countries also rolled out environmental policy goals that may eventually seek to limit U.S. farmers’ access to technologies like gene editing and access to plant protection products.

For now, however, the four-month window is welcome news for U.S. wheat farmers and their HRS customers in the UK and EU. We applaud the negotiators for this initial step and stand by, ready to support them as they work toward a resolution. We hope for timely, sufficient progress to allow subsequent extensions until a permanent resolution is found.

By Dalton Henry, USW Vice President of Policy


By Shelbi Knisley, USW Director of Trade Policy

Last week, U.S. Wheat Associates (USW) submitted comments to the United States International Trade Commission (USITC) on the importance of Trade Promotion Authority (TPA) legislation to U.S. wheat producers.

The Office of the U.S. Trade Representative (USTR) describes TPA this way: “Since 1974, Congress has enacted TPA legislation that defines U.S. negotiating objectives and priorities for trade agreements and establishes consultation and notification requirements for the President to follow throughout the negotiation process. At the end of the negotiation and consultation process, Congress gives the agreement an up or down vote, without amendment. TPA reaffirms Congress’s overall constitutional role in the development and oversight of U.S. trade policy.”

TPA is important in securing free trade agreements (FTAs) by establishing a known, reliable process for securing congressional approval of agreements negotiated by the executive branch. TPA has been vital for the growth of U.S. agriculture and future trade agreements, by maintaining competitiveness for U.S. wheat producers in the global market.

U.S. wheat producers have benefitted from several FTAs over the last several decades that were negotiated and approved through the TPA process. For example, the North American Free Trade Agreement (NAFTA) was critical in developing the market for U.S. wheat in Mexico, which is now our number one export destination. USW also supported the updates to NAFTA, found in the U.S.-Mexico-Canada Agreement (USMCA), which will address additional trade issues including an improved sanitary and phytosanitary (SPS) chapter. This is a first-of-its-kind provision for regulating trade in goods developed using agricultural biotechnology and updated methods for resolving technical disputes. These provisions should help avoid future challenges that have the potential to disrupt U.S. wheat exports.

The U.S.-Peru Trade Promotion Agreement FTA is a virtual guarantee that tariffs will remain at zero for U.S. wheat. It entered into force in 2009, the same year as the Peru-Canada agreement. Both allowed immediate duty-free access to Peru’s wheat market. Peru’s overall wheat imports have grown from 1.4 million metric tons (MMT) before the agreement to 2.2 MMT in 2019/20. The U.S. market share is around 20 percent. Argentina and Russia also compete in Peru, which now applies zero duties for all wheat imports.

Grain trade is a high volume, low-margin business. Even relatively small tariff differences can have a detrimental impact on both suppliers and importing industries. Wheat trade can be highly affected by quality, and U.S. wheat tends to be among the highest quality globally. However, quality is not free, and an importer may decide that the value advantage of U.S. wheat is not worth the additional cost of the duty if an alternative origin receives improved market access. Predictable market access and a level playing field are therefore top priorities for USW.

Trade Promotion Authority is a key tool for securing new FTAs. While trade agreements negotiated under TPA do not guarantee success in a market, they have a strong track record of playing an important role in expanding and maintaining access for U.S. wheat producers.

For more details and to read about other FTA’s impacts on U.S. wheat exports, USW comments to USITC can be found here.


By Shelbi Knisley, USW Director of Trade Policy

Last week U.S. Wheat Associates (USW) submitted comments to the Office of the United States Trade Representative (USTR) for the annual National Trade Estimates (NTE) report.

The NTE report allows U.S. industry organizations to highlight and comment on trade barriers impacting their trade opportunities to the U.S. government. USW highlighted several key U.S. wheat markets where there are many barriers in market access, sanitary and phytosanitary (SPS) issues, export subsidies and domestic support. Two of these barriers are highlighted below.


India maintains a trade distorting market price support system that encourages domestic wheat production. This leads to distortion in the international market due to domestic crop size and price. When stocks are too large, India has a history of applying export subsidies to move these excess wheat supplies out of the country. If they were to comply with World Trade Organization (WTO) rules and eliminate these subsidies it would create a more level playing field for U.S. wheat exports and increase U.S. wheat annual value of production by an estimated $516 million per year by 2028/29, according to a study by a Texas A&M University economist.


China has long been featured in USW NTE submissions with its violations of domestic support and TRQ policies. This year, both of those sections received substantial updates as China works toward compliance in the WTO case rulings and in implementing the Phase One agreement. When China joined the WTO, it agreed to an annual 9.64 million metric ton (MMT) tariff rate quota (TRQ) with a one percent duty but have always manipulated its administration to prevent proper use. USW is encouraged by the recent changes that have promoted extensive use of the TRQ this year but remains vigilant in monitoring the TRQ administration to ensure full compliance with the WTO ruling. That TRQ administration, coupled with real domestic support reforms, are key to unlocking the long-term potential of China’s wheat market for U.S. farmers and to providing consistent access to U.S. supplies for Chinese millers.

For more details and to read about trade barriers in other countries, USW comments to the USTR can be found here. USTR will use these comments to develop its annual NTE report to be released in early 2021.


The Government of Vietnam recently revised Most Favored Nation (MFN) tariff rates on several imported agricultural products, including wheat. This decision reduces Vietnam’s tariff on imported U.S. wheat (excluding durum) from 5 percent to 3 percent and will take effect July 10, 2020.

The reduced tariff is welcome news to U.S. wheat producers in part because it helps make U.S. wheat more competitive in Vietnam’s growing wheat market. There is, however, more work to be done because Vietnam pays no tariffs at all on most of their imports as a result of a series of preferential trade agreements such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), of which the United States is not a member.

Elimination of tariffs on U.S. wheat would benefit the growing Vietnamese milling industry and its customers. Despite the tariffs, their imports of U.S. hard red winter (HRW), soft white (SW) and hard red winter (HRW) wheat imports reached a market share of almost 13 percent in marketing year 2019/20, the largest level in five years. Vietnam currently imports an average of more than 2 million metric tons per year.

In addition, although phytosanitary restrictions sometimes limit exports, the Vietnamese flour milling and wheat foods industry look to U.S. wheat for consistent supply and quality, while USDA’s Foreign Agricultural Service (FAS) and Animal and Plant Health Inspection Service work to alleviate non-tariff and tariff barriers.

According to the MFN principle of the World Trade Organization (WTO), these MFN tariff rates will apply to all Vietnam trading partners with whom Vietnam has no preferential arrangements in place (such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement, of which the United States is not a member). Although its name implies favoritism toward another nation, MFN denotes the equal treatment of all countries.

In addition to U.S. wheat, Vietnam’s tariff reductions apply to milk and dairy products, fresh apples, grapes, dried grapes (raisins), frozen potatoes, almonds (in shell), walnuts (in shell), chilled pork, and ethanol. Additionally, the MFN tariff rate for frozen pork has been temporarily reduced from 15 percent to 10 percent, from July 10 until Dec. 31, 2020.



By Shelbi Knisley, Director of Trade Policy

U.S. Wheat Associates (USW) supports free trade through multilateral, regional and bilateral trade agreements. USW works closely with the USDA Foreign Agricultural Services (FAS) and the Office of the U.S. Trade Representative (USTR) to ensure favorable terms for wheat exports in all trade negotiations.

An opportunity to do that recently allowed USW to provide comments to USTR in support of negotiating a comprehensive Free Trade Agreement (FTA) with Kenya. That is because Kenya imports around 2.0 million metric tons (MMT) of wheat annually. Expanding market opportunities in Kenya would benefit U.S. wheat farmers and provide Kenyan flour millers with better access to quality supplies of milling wheat.

Map of Kenya. A detail from the World Map.

USW believes the negotiations should prioritize market access for U.S. wheat and resolution of sanitary-phytosanitary (SPS) issues and in our comments, we laid out these specific objectives:

  • Achieve an agreement with duty-free treatment and improved SPS and other non-tariff provisions for wheat of U.S. origin.
  • Eliminate Kenyan tariffs on U.S. wheat, which would create an advantage for U.S. wheat exports and help offset the shipping disadvantage currently faced by the United States compared to other suppliers, particularly between the European Union and Black Sea Region. Preferential access to Kenya would help make U.S. wheat shipments more competitive in the region.
  • Eliminate Kenya’s Certificate of Conformity requirement or Kenya should accept Federal Grain Inspection Service (FGIS) certificates and other standard trade documents as fulfilling that requirement, without requiring additional third-party inspections on U.S. wheat prior to shipment.

In February 2020 the U.S.- Kenya Trade and Investment Working Group adopted a phytosanitary protocol for Kenya that would allow U.S. wheat growers in the Pacific Northwest (PNW) access to Kenya’s wheat market for the first time in over a decade. Historically Kenya has maintained a non-scientific SPS barrier against U.S. wheat from this region due to concerns about the potential presence of a plant disease known as flag smut.

Africa is a rapidly growing continent, but one where the United States has had limited opportunities for trade negotiations. A high standard FTA with Kenya has the potential to serve as a model for other African countries to pursue trade agreements with the United States.


As an organization that has represented farmers in export markets for 40 years, U.S. Wheat Associates (USW) has a sincere interest in their welfare no matter where they farm. That concern is perhaps most intense for the world’s wheat farmers. For example, USW values its relationship with Canada’s wheat producers. And while we compete wholeheartedly in global markets (by the way, the United States imports more Canadian wheat on average than any other country), we encourage cooperation with them on issues that present constraints to global wheat trade and consumption.

Before the shared constrain of the global COVID-19 pandemic hit its peak, USW Director of Trade Policy Shelbi Knisley attended the Canadian Crops Convention March 3 to 5, 2020, in Vancouver, British Columbia. The convention, hosted by the Canada Grains Council and Canola Council of Canada, brings together a range of participants, largely leaders and staff from industry organizations and agribusinesses associated with the country’s grain value chain. The conference focused around the current international trade situation, increased competitiveness across Canadian commodities, as well as on the changing demands from consumers.

Both Canadian and U.S. grain organizations share a similar view of such new technologies as plant breeding innovations like gene-editing and non-tariff trade barriers including sanitary and phytosanitary (SPS) issues. Those shared interests create opportunity to collaborate on science-based initiatives.

USW also believes the mutually beneficial relationship is set to grow even stronger as last week Canada’s parliament passed the U.S.-Mexico-Canada Agreement (USMCA) implementing text, which removes a significant grain grading barrier for U.S. producers who wish to sell into the Canadian market. The Western Canadian Wheat Growers Association (WCWGA) has, like USW and the National Association of Wheat Growers (NAWG), strongly advocated for the USMCA. In fact, as WCWGA wrote in May 2019: “Specifically, the USMCA agreement supports what the Wheat Growers have been advocating for several years, namely that registered wheat varieties on either side of the border should be recognized in the other country.” USW sincerely thanks Canada’s farmers for their support of this important trade agreement.

Before the conference began Knisley visited the Alliance Grain Terminal (AGT) at the Port of Vancouver, which offered perspective of how investments are being made to keep Canada competitive in the growing global market. The Port of Vancouver is Canada’s largest port and has been growing as demand has increased. There are several grain handling facilities located at the port, with AGT being the third largest. With the growing demand, a new G3 terminal is being built, which is expected to open this year.


By Shelbi Knisley, USW Director of Trade Policy

U.S. wheat producers welcomed recent news that Kenya lifted a trade barrier on some U.S. grown wheat and agreed at the same time to initiate talks on a Free Trade Agreement (FTA). An FTA with Kenya could provide more favorable tariff and sanitary-phytosanitary (SPS) provisions for U.S. wheat in a market that annually imports around 2.0 million metric tons (MMT). The U.S. Trade Representative’s announcement to launch this discussion with Kenya is mandated under the renewal of the 2015 African Growth and Opportunity Act (AGOA).

The U.S.- Kenya Trade and Investment Working Group adopted a phytosanitary protocol for Kenya that would allow U.S. wheat growers in the Pacific Northwest (PNW) access to Kenya’s wheat market for the first time in over a decade. Historically Kenya has maintained a non-scientific SPS barrier against U.S. wheat from this region due to concerns about the potential presence of a plant disease known as Flag Smut. Kenya’s ban has also impacted U.S. wheat exports to Uganda, but not because that country bans Flag Smut. Uganda is a land-locked country therefore uses Kenya’s port facilities, which forces them to abide by Kenya’s import requirements.

Kenya’s domestic wheat production only meets around 10 percent of its annual demand. Even as Kenya maintains a 10 percent import tariff on wheat from all origins, they typically remain a price-sensitive buyer. The country sources much of its wheat import volume from nearby suppliers—Russia, Ukraine and the EU—which often has a price and freight advantage over PNW wheat supplies. That combination of obstacles puts the key to expanding U.S. wheat market share in an FTA that would resolve remaining SPS issues and provide a tariff advantage to U.S. wheat. This would allow Kenyan flour millers access to quality U.S. wheat supplies at a lower cost. The United States currently supplies around 5 percent of this market, or about 120,000 MT per year.

U.S. Wheat Associates (USW) believes announcement to launch negotiations with Kenya is a step in the right direction that has the potential to serve as a model for trade negotiations with other African countries to follow.

Learn more about other trade negotiations and issues crucial to overseas demand for U.S. wheat here.