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Late spring is a notoriously busy time on U.S. farms. This may partly explain why last month’s World Trade Organization (WTO) Ministerial meetings in Geneva largely came and went without much notice from U.S. farmers or farm media. Or maybe U.S. farmers have tuned out the inner machinations of a 25-year-old organization that has been promising a new agricultural agreement for more than two-thirds of its existence. Whatever the reason, the actions, both those taken and not taken, will impact U.S. wheat farmers.

The actions taken of note at the WTO Ministerial include a new declaration on sanitary and phytosanitary (SPS)* regulations and a commitment by countries to exempt humanitarian purchases by the World Food Programme from export restrictions. The latter is of little consequence to U.S. producers as U.S. laws around export restrictions are pretty tight, part of what has made the United States the most reliable wheat supplier in the world. The SPS front, though, holds more promise.

Fastest Growing Trade Barriers

Non-tariff barriers to trade (which include SPS regs) represent what we on the U.S. Wheat Associates (USW) policy team have called “the fastest-growing segment of trade barrier impacting wheat trade.” We have worked on more non-tariff barriers than traditional tariff barriers in the last calendar year. Non-tariff barriers include rules such as maximum residue limits (MRL) on pesticides and limits on weed seed species or insects. Many SPS regulations are critically important to protecting plant and human health, but, in recent years, many countries have found they are a convenient way to protect domestic producers or otherwise frustrate international trade. That the SPS rules received a major update for the first time in their existence at the WTO Ministerial and that the notoriously protectionist European Union joined in supporting them notes just how important they have become to facilitating trade.

Attempts at Weakening WTO Rules

It may seem odd to celebrate actions not taken, almost as though no progress represents a successful outcome. However, that has increasingly been the case for U.S. agriculture at WTO Ministerial meetings in the last decade.

With all hopes of securing meaningful new market access for agriculture essentially dashed since 2008, several developing countries have tried to weaken existing rules. India has been notorious for this, insisting that its public stockholding programs be exempt from subsidy limits – despite exporting substantial wheat and rice stocks from those so-named food security programs. India secured a limited exception to those subsidy rules during the Bali ministerial in 2013. Developing countries also substantially, though temporarily, weakened rules on export subsidies – widely recognized as the most trade distorting form of domestic support during the Nairobi ministerial in 2015.

With those two events as background, an informal coalition of U.S. agricultural groups – “Aggies for WTO Reform” – attended the WTO Ministerial, received briefings from the U.S. government and WTO representatives, and advocated with other country delegations to hold firm in the original rules of the WTO.

Trade Rules for the Greater Good

Those original rules have been critical to the expansion of U.S. agricultural trade since the WTO was formed in 1996. The chart below, shared with USW’s board of directors in early 2022 by USDA Acting Undersecretary for Trade and Foreign Agriculture Jason Hafemeister, shows the double-sided value to world economies from the WTO. By standardizing the rules of trade and reducing barriers in its initial agreement, the WTO enabled a tremendous rise in exports of U.S. agricultural products while simultaneously lifting millions of people worldwide out of poverty.

Fruits of Globalization chart

So, in looking back at another WTO Ministerial meeting, there may be much to be said about its shortcomings and the need for improvements, but history shows when countries stick to the rules and agreements, trade – and people – win.

*The U.S. Trade Representative defines SPS measures as rules and procedures that governments use to ensure that foods and beverages are safe to consume and to protect animals and plants from pests and diseases.

By USW Vice President of Policy Dalton Henry

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Consumers and suppliers both appreciate uniformity, the ability to purchase a reliable product that is available when needed. Customers of U.S. wheat know that dependable people grow and supply reliable wheat, which marks the difference between the U.S. wheat market and some competing suppliers.

Freedom to Trade

Free trade has been upheld in U.S. commerce since the country’s founding. The Export Clause, in Article I, Section 9, Clause 5 of the U.S. Constitution, states, “No Tax or Duty shall be laid on Articles exported from any State.” The framers of the constitution, eager to throw off the history of colonial rule, made it a policy that goods from the U.S. would be available to markets worldwide, and no elected official would tell them otherwise.

However, farmers have fought for uninhibited trade.

When the Soviet Union invaded Afghanistan in 1980, President Carter cut off U.S. grain exports to the Soviets. In the aftermath of the grain embargo, more stringent laws such as the export sales reporting and contract sanctity law were passed that doubled down on the freedom of commerce.

Protectionism Rising

Despite the sincere efforts by the World Trade Organization (WTO) to keep international markets open, some countries remain quick to block exports when markets become uncertain. Covid-19 and the global shutdowns that followed showed a pattern of export bans from major commodity producers. Russia’s recent invasion of Ukraine has also had a reverberating effect on the grain markets. Many would-be suppliers have instead banned or restricted the sale of their wheat, creating a supply worry and once again proving that not all markets remain reliable.

When countries implement wheat export bans claiming to protect their domestic market it creates uncertainty and higher prices for buyers. Putin’s war with Ukraine pushed already increasing world wheat prices to spike to more than a decade high in March, and prices remain elevated.

Putin’s war with Ukraine pushed increasing world wheat prices to spike to more than a decade high in March, and prices remain elevated. The latest USDA Supply and Demand Report expects Ukrainian wheat exports to fall by nearly half year-over-year from 19.0 million metric tons (MMT) in 2021/22 to 10.0 MMT in 2022/23. This 9.0 MMT reduction is almost the equivalent of all the wheat Turkey is expected to import in 2022/23. Russia’s unprovoked invasion has interrupted Ukrainian commercial sales and added uncertainty to the market.

India abruptly halted commercial wheat exports on May 13, catching the wheat market off guard. The immediate suspension has moderated somewhat since then. Still, the government’s promise to fulfill export shortages caused by Russia’s invasion of Ukraine was an unexpected and costly blow to the market.

Intervention Expands

Other countries have weighed the use of export-curbing measures. Argentina’s president in May urged its legislature to increase export taxes to protect domestic prices from “surging international prices.” Kazakhstan applied a quota on wheat, including durum, soft wheat, and wheat flour, from April 15 to June 1. Belarus imposed an export ban on grains from late 2021 to early 2022.

And Russia, with a very large wheat crop now expected, has not stopped its protectionist wheat export tax that only increases the cost for buyers. Russia also imposed export bans on countries in the Eurasian Economic Union (EEU), which comprises former Soviet countries. The ban is in place from Mid-March to August 31, 2022.

When countries implement wheat export bans, they often claim to be protecting their domestic market. But the actual effect is higher prices for every buyer. Export bans also create uncertainty. India’s sudden export ban is a prime example.

“We bought wheat from traders and moved it to ports,” said a wheat trader caught off guard by India’s export ban. “Our intention is to fulfill export commitments, but we can’t overrule government policy. Therefore, we don’t have any option but to declare force majeure*.”

Buyers expect reliability, and that requires suppliers to have dependable partners. U.S. wheat farmers and their export supply chain partners, with government support, strive to be that dependable partner to world wheat buyers.

By Michael Anderson, USW Market Analyst

*Force Majeure is a provision in a contract that frees both parties from obligation if an extraordinary event directly prevents one or both parties from performing.

Header photo courtesy of Adams Farms LLC in Oklahoma, June 2022

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This week, the Biden Administration launched a signature foreign policy initiative aimed at increasing economic involvement across Southeast Asia. The initiative is called the Indo-Pacific Economic Framework for Prosperity or IPEF.

According to the initial declaration issued by the participating countries, it “intends to advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness for our economies. Through this initiative, we aim to contribute to cooperation, stability, prosperity, development, and peace within the region.”

TPP Replacement?

While touted by some in the United States as a replacement for the Trans-Pacific Partnership (TPP) for economic engagement in the Southeast Asia region, what has been revealed so far about the Indo-Pacific Economic Framework is quite different from Free Trade Agreements (FTA) like TPP. Unlike an FTA, the IPEF has no plans for addressing tariffs, instead featuring four “pillars” that individual countries can choose to opt-in or out of.

Those pillars are:

  • Trade
  • Supply Chains
  • Clean Energy, Decarbonization and Infrastructure
  • Tax and Anti-corruption

The initial countries agreeing to launch the discussions include key U.S. wheat markets such as Japan, the Philippines, Korea, Indonesia, Thailand, Vietnam, and Malaysia. Others include Australia, Brunei, India, New Zealand and Singapore.

Next Steps

These countries have not yet stated which pillars of the Indo-Pacific Economic Framework they intend to join. The outcome of those individual country decisions will likely come after initial negotiations establish the scope of issues to be addressed by each pillar, and for the trade section, this will have far-reaching implications for the value of any subsequent agreement.

The timeline for reaching final agreements across all pillars ranges from 12 to 24 months, making it a hopeful first-term effort for President Biden. IPEF is not expected to require Congressional approval because it would not change U.S. law. Changes would require the U.S. Trade Representative to consult with and eventually seek approval from the U.S. Congress.

This also avoids the need for Trade Promotion Authority (TPA), which expired nearly a year ago. Politically, TPA is often seen as a prerequisite for large-scale negotiations because it delegates some negotiating powers from Congress to the administration and establishes processes for formal consultation and expedited voting for eventual agreements.

With no congressional approval, required an aggressive timeline is more likely for IPEF. However, it also indicates that the scope of the trade pillar will likely be limited in depth.

By Dalton Henry, U.S. Wheat Associates (USW) Vice President of Policy 

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U.S. Wheat Associates (USW) thanks National Association of Wheat Growers (NAWG) President Nicole Berg for highlighting the vital role of international food aid programs and export market development programs to the U.S. House Agriculture Committee’s Livestock and Foreign Agriculture Subcommittee. Berg, a wheat farmer from Paterson, Wash., testified on April 6 at the subcommittee’s hearing on the 2022 Farm Bill. Her testimony focused on the Title III programs: international food aid and agricultural trade promotion.

In her testimony, Berg described how food aid helps stabilize economies and populations impacted by climate change, famine, and war. She also reinforced the critical role trade promotion programs play in sharing the abundance of U.S. agriculture across the world.

USW is a cooperator with USDA’s Foreign Agricultural Service in the Market Access Program (MAP) and Foreign Market Development (FMD) program. Berg noted that while these programs benefit U.S. agricultural producers and their overseas customers, program funding has been static for over 15 years. She highlighted a study that concluded that doubling annual MAP and FMD funding would incentivize private industry to increase their investments by 50%, creating yearly increases in agricultural exports by $4.5 billion. The Title III programs are essential to building trust with buyers and end-users, Berg told the member of Congress.

Food Aid Will Be Needed

“While there is still uncertainty about how the Russian invasion of Ukraine will impact world markets, we know that the invasion will exacerbate global food insecurity,” Berg said.

Wheat makes up the largest volume of in-kind U.S. food aid. In her written testimony, Berg said the looming humanitarian crisis from the Russian invasion of Ukraine will need U.S. food aid programs to curb the effects of hunger.

“Our food aid programs are the best suited for U.S. wheat to help support the humanitarian needs of those involved,” Berg said. “As the subcommittee continues to evaluate the 2018 Farm Bill programs, our food aid programs must receive continued support, and the MAP and FMD programs dollars must be enhanced to support cooperator needs.”

People standing near bags of U.S. wheat donated by International food assistance in Kenya.

In 2019, NAWG President Nicole Berg, center in blue shirt, witnessed the life-changing efforts of international food aid on a visit to Kenya and Tanzania. At the Kakuma Refugee Camp in Kenya, the World Food Programme (WFP) was feeding 98% of the more than 200,000 residents from nine countries. Over half of their food supplies, including wheat, comes from the United States. A man named Nelson told Berg that they were always happy with the high quality of the U.S. food they received, especially due to the quality of wheat flour.

From their offices on Capitol Hill, NAWG is the primary policy representative in Washington D.C. for wheat growers, working to ensure a better future for America’s growers, the industry and the general public. NAWG works with a team of 20 state wheat grower organizations to benefit the wheat industry at the national level. NAWG staff is in constant contact with state association representatives, NAWG grower leaders, Members of Congress, Congressional staff members, Administration officials and the public.

Read Berg’s full testimony here.

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China’s latest customs numbers are in, and the news is significant. After clearing 933,500 metric tons of wheat through customs in December, China in calendar year 2021 exceeded its 9.636 million metric ton (MMT) annual wheat TRQ (tariff rate quota) established in its World Trade Organization (WTO) membership. The official tally was 9.718 MMT of imported wheat.

According to customs, Australian wheat and U.S. wheat at more than 2.7 MMT each were China’s largest suppliers in 2021. The difference between them is a mere 9,000 metric tons. That is about the volume that fits into one hold on a bulk freight vessel.

Customs data showed China exceeded its annual wheat TRQ in part by importing 2.544 MMT of Canadian wheat and 1.412 MMT of French wheat in 2021. The volume China imported from those four wheat suppliers indicates to U.S. Wheat Associates (USW) that buying from deep and transparent markets with good ocean shipping infrastructure is still attractive to China’s buyers. The remaining 3% of its total 2021 imports arrived from Kazakhstan and Russia.

Image of U.S. HRW wheat and list of functional benefits included to show how China exceeded its annual wheat TRQ with help from USW.

Introducing HRW Wheat. China imported a significant amount of U.S. hard red winter (HRW) wheat in 2021. So in September, USW used presentations (above) and technical demonstrations to help Chinese millers and grain buyers understand the functional benefits of HRW.

U.S. Wheat Demand

In December, a private buyer purchased a small container-load of U.S. wheat. That helped lift China’s total U.S. imports in the second half of calendar year 2021 t0 848,000 metric tons. The obvious, recent slow-down in U.S.-origin wheat arrivals is disappointing. But it is not surprising. In fact, U.S. export wheat prices are now above domestic Chinese prices on a Cost and Freight basis.

China’s private milling and wheat food manufacturers serve an increasingly sophisticated consumer market. Their demand for four classes of high-quality U.S. wheat remains strong. That is why our experienced, professional USW China team members continue to educate industry customers about U.S. wheat value and functionality. We are pleased that COFCO, China’s state trading company, welcomes our activities that, we believe, helped China exceed its annual wheat TRQ.

Practical Guidance

A good example from 2021 was a three-day “Contracting for Wheat Value” seminar in July for 32 participants representing 11 non-state and state Chinese trading companies and mills. The goal of the seminar was to help the participants become better-prepared buyers. USW provided practical guidance on writing contract specifications that take advantage of U.S. wheat crop and market situations and much more. According to input from the meeting participants, our goal was achieved.

Chinese wheat buyers participated in a USW Contracting for Wheat Value seminar in 2021, part of effort to help China exceed its annual wheat TRQ in 2021.

Contracting for Wheat Value. USW combined an in-person meeting in Guangzhou, China (above), with video and virtual presentations in July 2021 to help Chinese wheat buyers better understand the U.S. wheat export system.

Policy Plays Its Role

We also respectfully look for help from policymakers on both sides. Since the Phase One agreement, U.S. wheat sales to China are far above USW’s pre-trade war average. As USW Vice President of Policy Dalton Henry noted one year ago, policymakers “would do well … to pick up where Phase One left off and continue to build on the tremendous export potential for China.”

It is true that some uncertainty will remain in U.S.-China trade relations. It is also true that opportunities will emerge to do business in China. USW has support from our farmers and USDA Foreign Agricultural Service export market development programs. And USW will stay engaged in keeping our Chinese customers informed about the quality, variety and value of U.S. wheat. So hopefully, next January, we will see that China has once more exceeded its annual wheat TRQ.

Finally, we wish all our customers and friends peace and good health in the Year of the Tiger!

By Jeff Coey, USW Regional Vice President, China, Hong Kong and Taiwan

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U.S. Wheat Associates (USW) is very pleased that several members of Congress have asked Secretary of Agriculture Tom Vilsack and U.S. Trade Representative Katherine Tai to pursue a World Trade Organization (WTO) case against India’s trade-distorting domestic wheat and rice support.

In separate letters to those officials, members of the U.S. Senate and House of Representatives noted that while India is limited to providing 10% support for crop inputs under its WTO agreement, the government subsidizes half the total cost of wheat and rice production and recently announced a massive new subsidy for fertilizer. The letter also reminds Ambassador Tai and Secretary Vilsack that the United States counter-notified India’s claim that it meets WTO limits on price support. However, India’s government continued raising the guaranteed prices it pays to purchase wheat and rice.

India’s subsidies lead directly to domestic supplies that far exceed India’s acknowledged need for stockkeeping – stocks the government cannot store effectively. As a result, the government unloads stocks into the export market, often at prices below what it paid to purchase the wheat. USDA estimates Indian wheat exports for the marketing year ending June 30, 2022, will be 5 million metric tons (MMT). This leaves almost 28 MMT of wheat stocks remaining.

Chart shows Indian wheat production and exports to illustrate trade distorting wheat and rice subsidies

India’s wheat subsidies encourage over-production, pushing India into the global export market. As a result, stocks exceeding the government’s ability to store wheat periodically distorts trade. Source: USDA Foreign Agricultural Service Production, Supply and Distribution Databases.

The distortion of international wheat and rice trade from these policies is severe, costing U.S. wheat farmers more than $500 million per year in lost income according to a 2020 Texas A&M University study commissioned by USW and USA Rice.

Wrong Subsidies, Wrong Time

Subsidies encouraging over-use of agricultural production inputs are not appropriate when the world is concerned about agriculture’s environmental footprint. We ask the question why is India subsidizing fossil fuel and chemical fertilizer use? Why is India subsidizing over-production that encourages the cultivation of more marginal land?

U.S. wheat and rice farmers rely on open markets and fair trade to sustain their ability to feed the world. USW joins members of Congress and the National Association of Wheat Growers in calling on India to adhere to its international commitments and willingness to work with USDA and the Office of the U.S. Trade Representative to maintain the competitiveness of U.S. wheat in the world.

Graph shows various wheat subsidies reported to WTO.

The U.S. government submits this data to the WTO by the U.S. government as part of a counter-notification. This data shows a wide discrepancy between actual domestic wheat support and the Indian government’s submission.

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U.S. Wheat Associates (USW) recently joined a coalition of several U.S. agricultural organizations calling on the Biden Administration to work toward reforms to the World Trade Organization (WTO) “that lead to a market opening agenda for agriculture and a better functioning institution.”

USW signed the July 23, 2021, letter to U.S. Trade Representative Katherine Tai and Secretary of Agriculture Tom Vilsack because it believes the WTO’s mission to liberalize global trade has benefitted the wheat farm families the organization represents and the world’s wheat importers. As the coalition stated on liberalized trade, “It helps connect American farming communities to peoples around the globe.”

Since it was formed in 1995, global wheat trade has doubled. The WTO provides a trade dispute mechanism that has identified the need to amend trade-distorting practices such as China’s domestic wheat support and unfilled wheat import tariff rate quota.

However, the letter also pointed out that “When the WTO functions poorly, and other governments get away with treating U.S. agriculture exports unfairly, trust erodes in our government and international institutions. To restore trust, WTO reform is needed.”

Leading issues of discussion at the WTO include challenges on tariff implementation, domestic support, transparency, sustainability, and climate. Following are some of the areas the coalition would like the U.S. officials to address at the WTO Ministerial Conference (MC12) in late November 2021:

  • Public stockholding (PSH) disciplines – PSH programs may serve a laudable food security goal but often lead to excessive domestic stockpiles, as we have seen in India and China. Those stocks lead to lower global prices and may force U.S. farmers to compete with subsidized exports.
  • Special safeguard mechanism (SSM) rules – SSM’s allow developing countries to temporarily impose import tariffs to protect domestic producers from competition, and at times may unfairly tax U.S. exports.
  • Domestic support limits – Domestic support, a subsidy that encourages production, is one of the most discussed topics in Geneva. Some countries want the U.S. and EU (both of whom are within the limits they agreed to) to slash their farm program spending, while the U.S. argues that many advanced developing countries are dramatically exceeding their own limits. The coalition supports negotiating new limits on domestic support if market access is also considered.
  • Export restrictions are policies that may limit the amount of a product being exported from a country in the form of a tax or set quantity. Some countries will impose export restrictions on commodities to control domestic prices. During the COVID pandemic, Russia imposed export restrictions on wheat exports to control domestic wheat prices. Countries are expected to consider a proposal to exempt purchases by humanitarian organizations like the World Food Program from these limits.

Addressing transparency is a leading concern because it has a significant effect on market access and export competition. For example, global wheat production and trade are negatively impacted by India’s domestic support policies for wheat. Resolving such issues would help the market operate more freely and allow more fair and equal trade for all wheat producers.

The world continues to change, and the demand on the agricultural industry to feed more people in more environmentally and socially sustainable ways is increasing. The coalition supports using science-based approaches to embrace innovations and technologies to address these challenges of sustainability and climate. Also, with this, the coalition supports a declaration on sanitary and phytosanitary (SPS) measures, which would establish a committee on SPS measures to focus on harmonized regulation, risk analysis, sustainability, and innovation at the WTO.

USW remains committed to the WTO’s mission and believes that, with positive reforms, the organization can once again become a functioning, trusted institution for equal and fair trade for the people of the world.

By Shelbi Knisley, USW Director of Trade Policy

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By Ben Conner, Partner, DTB AgriTrade

Over the last several years, U.S. Wheat Associates (USW) and other industry groups have demonstrated how the policies of a few advanced developing countries are distorting world wheat trade and hurting farmers in the United States and other wheat exporting countries. Chinese government grain policy attracted special attention, leading to two dispute cases at the World Trade Organization (WTO), one on excessive subsidies and one on China’s administration of a tariff rate quota on wheat, corn, and rice. By April 2018, WTO dispute panels had sided with the United States in both cases.

Today, the official settlement process for one of those cases has entered the next phase. On July 26, 2021, the United States asked the WTO Dispute Settlement Body (DSB) for authorization to raise tariffs on imports from China due to its failure to comply with the DSB recommendations on its tariff-rate quota (TRQ) administration. China blocked the request, which puts the matter before an arbitration panel. Simultaneously, China made its own request for another panel to review whether it has brought its policies into compliance.

Very close observers of WTO processes might experience deja vu because this is exactly what happened with the case on China’s subsidies for the same commodities last summer.

The next step is for the WTO to form two panels to review the requests of both China and the United States. The compliance panel will look at whether China’s TRQ administration is now functioning on a “transparent, predictable, and fair basis … using clearly specified administrative procedures,” as required by the DSB recommendations. An arbitration panel will review the U.S. request to raise tariffs and decide whether its methodology is appropriate.

Two Reasons for the Challenge

Why is the U.S. government taking this step forward on this case? After all, China has been importing record amounts of wheat and corn since the signing of the Phase One deal (rice is notably lagging) that included implementation of the WTO recommendations on TRQs and subsidies. There are two main reasons.

Procedurally, the U.S. government had to continue extending the window for China to comply (they had already agreed to seven extensions), allow that window to expire with no further action and forfeit its right to suspend concessions, or request that right within 20 days after the window expired. It chose the third option.

Even though China has allowed higher imports, there is still little clarity on how TRQ shares are allocated and reallocated.

If the process remains opaque and unpredictable, China will not be in compliance with its TRQ obligations, which could prevent imported wheat with qualities supplementing Chinese domestic wheat from reaching the Chinese wheat millers who could use it most effectively. It is encouraging that the U.S. and Chinese governments are continuing this case as it will help resolve disagreements over whether China is in compliance with its TRQ commitments and exert pressure to fix problems with Chinese government grain policy permanently.

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It is a country that imports about 800,000 metric tons of wheat each year, a mere 90 miles from the United States. Yet the Cuban wheat market has long been a source of optimism and frustration for U.S. wheat farmers. With the change in administrations, there is hope for re-engagement with Cuba, but ultimately the 60-year-old embargo and associated policies still stand as a solid barrier to beneficial trade.

General public opinion polls on Cuba policy consistently show most Americans favor more engagement, the last decade has seen a roller coaster of changes in U.S. policy. Under the Obama-Biden Administration, there were efforts to establish a new relationship and relax tensions. This included a new interpretation of “cash in advance” rules that apply to payment for any agricultural commodities, bilateral exchanges by technical staff in regulatory agencies and the reopening of the U.S. embassy in Havana. However, none of those changes resulted in actual wheat purchases. Then the Trump Administration further restricted trade by limiting any business conducted between American companies and state-owned companies (such as flour mills) in Cuba.


“Wheat is an important food grain that should be above politics, but the embargo will likely have to end before wheat farmers can help … feed the Cuban people.”


With Biden’s return to the White House, Cuba watchers are anxiously awaiting the next curve in the roller coaster ride and are optimistic the administration will return to the Obama-Biden policy of re-engagement. However, any realistic effort to expand ag trade with Cuba needs to focus on the other end of Pennsylvania Avenue by working to secure meaningful change within the halls of Congress and addressing the bipartisan opposition to trade with Cuba.

Just such a Congressional effort was launched last week by U.S. Senators John Boozman of Arkansas and Michael Bennet of Colorado with the introduction of the Agricultural Export Expansion Act. That bill would allow private financing of agricultural commodities by U.S. companies – a small first step toward normalizing the trading relationship, but an important one to put U.S. companies on a near level playing field when working with Cuban buyers. Several U.S. agricultural organizations including U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) signed a letter of support for the effort as ad hoc members of the United States Agricultural Coalition for Cuba.

More Legislation

The Ag Export Expansion bill is not the only pro-normalization effort within Congress. U.S. Senators Jerry Moran of Kansas, Amy Klobuchar of Minnesota and Patrick Leahy of Vermont, all long-time Cuba trade advocates, earlier this year introduced the Freedom to Export to Cuba Act, which would lift substantial portions of the embargo, including restrictions prohibiting transactions between U.S. and Cuban firms.

Farmers are right to be interested in opening the Cuban wheat market. Cuba produces no wheat domestically and would be a substantial U.S. market if government barriers were to be lifted. But for any of that optimism to come to fruition, it is going to take a literal act of Congress.

“Wheat is an important food grain that should be above politics,” said former USW President Alan Tracy in 2017, “but the embargo will likely have to end before wheat farmers can help meet the increasing demand for agricultural products to help feed the Cuban people.”

By Dalton Henry, USW Vice President of Policy

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By Ben Conner, Partner, DTB Associates

The World Trade Organization (WTO) is preparing for its 12th Ministerial Conference (MC12) in Geneva at the end of the year; meanwhile, there is widespread concern that the organization is drifting into irrelevance. But for U.S. farmers, the rules established by the WTO are directly relevant to their work in the fields, and their customers depend on the rules to ensure access to a reliable supply.

Here is a not-at-all unrealistic scenario:

Wheat farmers gather for a meeting at the local country elevator where they sell their crop. The manager tells the farmers that the elevator will not be able to buy any wheat treated with a very effective, foliar disease control product approved for use on wheat in the United States. The reason: the government of an overseas market has announced a zero tolerance for residues of that product on imported wheat and the grain trade cannot accept that risk.

This is but one illustration of the influence that policies in one country can have on practices in another. WTO rules – agreed to by almost every country – set parameters for these policies to ensure that they do not unjustifiably restrict trade. In this scenario, the country imposing the residue restriction may be acting consistently with WTO rules (though it is more unlikely if the U.S. Environmental Protection Agency has approved the treatment) but it must be able to demonstrate that it met the criteria laid out in the relevant WTO agreements.

Monthly WTO Committee Meetings

Every month, representatives from WTO member countries meet in committees to probe policy development on issues just like this. They ask things like: what is the policy’s objective? Does the scientific evidence justify that conclusion? Did you consider the trade effects of that subsidy? Why are companies complaining that they cannot get an import license from your customs agencies? When will you submit transparency notifications? This work almost never makes the news but is a critical part of the statecraft needed to reduce friction in international trade.

Image representing trade barriers and the WTO role in preventing them.

“When countries impose trade barriers even after receiving extensive pushback in the World Trade Organization (WTO) committees, there will not be a quick solution and it will disrupt trade.”

The farmers in the fungicide scenario will almost certainly not be able to rely on the WTO committee process nor the dispute settlement mechanism to fix the problem before marketing their grain. When countries impose trade barriers even after receiving extensive pushback in the WTO committees, there will not be a quick solution and it will disrupt trade. Yet the committee process itself helps limit the number of ideas that ultimately become trade barriers. Questioning trade practices helps provide clarity, draw attention to a problem that can lead to a negotiated solution, build coalitions around a particular concern, and can serve as a prelude to dispute settlement litigation.

A WTO that Works

A functioning WTO is perhaps more important for agriculture than any other sector. Global agricultural trade is particularly complicated and there is little more sensitive than the food we eat. There are reasons why agriculture is the only economic sector with its own multilateral trade agreement, though other WTO agreements on sanitary and phytosanitary measures and technical barriers to trade are arguably even more important for the sector. Because of their sensitivity, agriculture issues are sometimes impossible to resolve through negotiation and the backstop of a litigated outcome (with the possibility of retaliation) is the only way to get a government to back down from a harmful trade policy.

Farmers prefer to use the most effective tools available for their crops. When it comes to agricultural trade policy problems, the most effective tools are often found at the WTO. Regardless of what happens at MC12, limiting trade barriers will require robust engagement by governments and industry in the often invisible work of this critical institution.