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An Aggressive Trade Policy Agenda for 2017

By Ben Conner, USW Director of Policy

On March 1, the U.S. Trade Representative’s office released the President’s Trade Policy Agenda for 2017. This document lays out the key trade policy principles and objectives of the Trump Administration.

Probably the best word to describe this agenda is aggressive. Some might have expected a word like transformative or even cataclysmic, but for those worried about the future of U.S. trade policy, this document is somewhat reassuring.

That could come as a surprise. The U.S. wheat industry supported the Trans-Pacific Partnership (TPP), is a major beneficiary of the North American Free Trade Agreement (NAFTA), and hopes China remains a member of the World Trade Organization (WTO). These positions seem to be at odds with some of President Trump’s trade rhetoric, but this trade policy agenda demonstrates that there may be substantial common ground.

An aggressive trade policy agenda does not necessarily mean aggression towards supply chains, and likely means further opening of trade opportunities. The agenda’s guiding principle is that trade should be expanded “in a way that is freer and fairer for all Americans,” with four major priorities:

  • Defending national sovereignty over trade policy;
  • Strictly enforcing U.S. trade laws;
  • Using leverage to open foreign markets;
  • Negotiating new and better trade deals.

There is certainly a sharper edge to this than we have come to expect in the past, but it seems to be more of a difference in tone and priorities rather than a total break from past trade agendas. In fact, following through on this trade agenda could be good for U.S. wheat customers. Barriers to U.S. exports make imported wheat more expensive and sometimes cost-prohibitive. If the United States takes a more energetic approach to eliminating these barriers, wheat importers and exporters alike could benefit.

One special point of emphasis in this trade policy agenda is sovereignty. It discusses at length that the WTO has no jurisdiction in the United States. This is emphatically true, and an important reminder about what the WTO is. WTO agreements are not international law in the sense that they supersede the law of domestic courts. The WTO commits nations to lower import barriers as agreed and formalizes processes for countries to retaliate when other countries act unfairly. The document also points out that WTO agreements are not meant to be “living agreements” that can be interpreted to mean something not originally intended by the signatories. While lawyers likely disagree on this point, it is certainly not outside the mainstream of trade policy thinking and seems to be consistent with the Obama Administration’s approach.

The point of this is not to suggest that there is no cause for concern. The concern of some in the Administration about trade in goods deficits and the inefficient emphasis on bilateral negotiations do not our preferred approach to a more open and transparent international marketplace (and could be detrimental to U.S. agricultural exporters). However, if this policy statement represents the Administration’s trade agenda going forward, there may be cause for optimism.

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WTO Adds Efficiency, Cost Savings Through Trade Facilitation Agreement

By Ben Conner, USW Director of Policy

Members of the World Trade Organization (WTO) have taken a major step toward making trade procedures more efficient and less costly for importers and exporters.  On Feb. 22, WTO announced that its new Trade Facilitation Agreement (TFA) entered into force. So far 112 of 164 member countries have ratified the agreement, which meets the two-thirds majority required for implementation.

TFA is the first multilateral agreement reached by WTO members since the organization’s founding in 1995. The World Economic Forum estimates that $1.6 trillion in additional annual global trade could result from this agreement. Overall, the WTO estimates a 14.5 percent reduction in trade costs through TFA implementation, while the average applied tariff is less than 10 percent.

The WTO traditionally dealt with tariffs and discriminatory measures at borders, but it was mostly silent on a major impediment to trade – inefficient trade procedures that can often be worse than tariffs in terms of their opacity and cost.

The purpose of TFA, as its name suggests, is to facilitate the movement, release and clearance of goods across borders. Red tape, delays and other regulatory measures can be a significant cost in today’s fast-paced supply chains. Demurrage can be very expensive and the risk of delay or rejection can inflate exporter bids in certain markets.

Some of the key TFA provisions will apply to all WTO member governments once the agreement is fully implemented and can help reduce the port costs of wheat trade. Under TFA, member governments must:

  • Publish all fees, laws, and regulations in an easily accessible manner;
  • Provide the right to appeal any administrative decision issued by customs;
  • Allow for additional testing in the event of an adverse first test;
  • Make transparent all fees and charges connected with imports and exports ;
  • Allow for release of goods prior to final determination of duties, taxes, fees, or other charges;
  • Coordinate border agencies to improve clearance and simplify procedures;
  • Review formalities and documentation requirements to expedite clearance periodically;
  • Encourage use of a single window to avoid having to interact with multiple agencies to clear imports;
  • Return or allow re-consignment of goods rejected for sanitary, phytosanitary, or technical reasons.

Not everything in TFA applies to all countries at the same time. “Developing” and “Least Developed Countries” as defined by the WTO are allowed some flexibility to customize their implementation process.

Still, wheat buyers in all WTO member countries should be aware that their governments have certain obligations under the TFA. It is important to ensure that each country complies with its TFA obligations to avoid major trade issues that may escalate later on.

The WTO has had a difficult time reaching new agreements that benefit world trade. TFA is a reminder that it can still be done and provides hope that the WTO will become a more vigorous institution in the future.

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Improving the Policy Environment for Agricultural and Food Trade in the Asia-Pacific Region

By Ben Conner, USW Director of Policy

With the U.S. withdrawal from the Trans-Pacific Partnership (TPP), U.S. agriculture groups are looking for other ways to improve trade policy across the Asia-Pacific region. This week, U.S. Wheat Associates (USW) joined 86 other food and agriculture organizations in a letter to President Donald Trump highlighting the importance of this region for U.S. agriculture.

Noting the large and growing markets in the Asia-Pacific region, the organizations wrote that reducing or eliminating tariffs and other restrictive agricultural policies would help consumers see more of the higher quality food and agricultural products they desire but cannot supply locally.

The letter also highlights the importance of free trade for agriculture, especially given the context of aggressive trade negotiations by competing countries looking for markets in the region.

“While many in our sector strongly supported the Trans-Pacific Partnership, we hope future agreements build upon the valuable aspects of that agreement to increase our market access in the Asia-Pacific,” the organizations wrote. “We welcome an opportunity to work with your Administration to ensure that America’s farmers, ranchers, processors and food companies do not fall behind … in this vitally important economic region.”

With unprofitable farm gate prices, a challenging volume of grain stocks and a strong U.S. dollar, remaining competitive in the growing overseas markets like those in the Asia-Pacific region is vital to the economic health of U.S. farmers. And USW believes healthy food and agriculture sectors are also a vital part of meeting demand around the world.

That is why the letter, with USW among the signatories, specifically expresses the willingness of these sectors to work with the Administration to “preserve and expand” trade policy gains, both for the sake of U.S. farmers and their customers who benefit from expanded access to quality products.

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Mexico Stands as a Leading U.S. Wheat Buyer

By Steve Mercer, USW Vice President of Communications

U.S. Wheat Associates (USW) represents the interests of U.S. wheat farmers in international markets. The organization is grateful to all its overseas wheat buyers, flour millers and wheat food processors for their strong preference for U.S. wheat and for their friendship. At a time when new circumstances have generated some uncertainty about trade, USW believes it is important to provide perspective on the long-standing, loyal relationship U.S. wheat farmers have with one of those customers: our neighbor to the south, Mexico.

Simply put, Mexico is one of the largest U.S. wheat buyers in the world, importing just under 3.0 million metric tons (MMT) on average going back many years. Mexico’s U.S. wheat imports typically only fall just short of the volume Japan imports. Not this year, however. In the first 7 months of marketing year 2016/17 through Feb. 2, Mexico’s flour millers have imported 2.4 MMT of U.S. wheat, which is more than any other country. That volume is up 5 percent over last year at the same time.

Breaking down their purchases by class, flour millers in Mexico generate strong demand for U.S. hard red winter (HRW) wheat. In 2015/16, they were the leading HRW importers and are taking advantage of the favorable prices and high quality of the 2016/17 HRW crop. At a current volume of about 1.4 MMT, they have imported 71 percent more HRW this year and again lead buyers of that class. A rising number of industrial bakeries, along with traditional artisanal bakeries, account for about 70 percent of wheat consumption according to CANIMOLT, the association representing Mexican millers. That puts HRW producers in a good position to meet that demand. Being closer to HRW production and having a highly functioning ability to import a large share of HRW directly via rail from the Plains states is an advantage for Mexico’s buyers.

In addition, Mexico is home to Bimbo, the world’s largest baked goods company, and an increasing number of cookie and cracker companies. The low protein content, soft endosperm and weaker gluten of U.S. soft red winter wheat (SRW) is well suited to the production of cookies, crackers and pastries, and serves as an excellent blending wheat. Millers supplying this growing market imported an average of 1.2 MMT of SRW between 2011/12 and 2015/16. With imports from the Gulf of more than 730,000 MT of SRW so far in 2016/17, Mexico is the top buyer of SRW again. USW and state wheat commissions from the PNW are also helping demonstrate how millers and bakers can reduce input costs by blending with U.S. soft white (SW).

As it does with all U.S. wheat importing customers, USW focuses on helping Mexico’s buyers, millers and food processors solve problems or increase their business opportunities with U.S. wheat classes. This effort, supported by wheat farmers and the partnership with USDA’s Foreign Agricultural Service, has fostered a productive relationship that has endured for decades through many challenges. More than 22 years of duty free access to the Mexican market under the North American Free Trade Agreement (NAFTA) certainly helped build the relationship.

Yet our customers there have many other sources of milling wheat to which they can turn. In response to rising world grain prices in 2008, Mexico lifted a 67 percent import tariff on wheat from outside the United States and Canada. In 2009/10, France made the first non-NAFTA origin wheat sale to Mexico since the trade agreement was implemented in 1995. Russian and Ukrainian wheat has been imported, too. To date, the tariff has not been reapplied and the Mexican import market is currently tariff-free for wheat from all qualified origins. Just this week, the leaders of Brazil and Argentina, both large grain exporting nations, said they would pursue closer ties with Mexico and other Latin American nations.

Looking ahead, NAFTA will likely be renegotiated. USW and wheat farmers understand that there are a number of elements of the trade agreement that need to be re-examined and modernized. The successful story of how U.S. wheat farmers and their customers in Mexico have worked together in a mutually beneficial way must be shared as part of the effort to update NAFTA. For now, U.S. wheat continues to flow to our customers in Mexico. During upcoming trade negotiations and beyond the eventual outcomes, wheat farmers, through USW, will continue to help and support the buyers from Mexico, as they would help and support their own neighbors.

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New Trade Policies Generate Some Whiplash

As promised, on the first working day of his presidency, Donald J. Trump fulfilled his campaign promise to withdraw from the Trans-Pacific Partnership (TPP), and gave notice to Mexico and Canada that the United States intends to renegotiate some parts of the North American Free Trade Agreement (NAFTA).

For decades, U.S. presidents of both parties have been largely consistent in their views on trade agreements. The TPP vision began under President George W. Bush, and was almost fulfilled under President Barack Obama — two presidents who agreed on few other policy areas. They both believed that opening borders to (mostly) free flow of trade in goods and services would benefit its TPP partners in the Asia-Pacific region and, in turn, U.S. industries.

As producers of high quality wheat classes, U.S. wheat farmers are oriented towards international markets. Through decades of experience, the industry also recognizes that free trade agreements like TPP and NAFTA are good for our customers looking to expand their milling and wheat foods enterprises in part with U.S. wheat quality and value. For exporters and importers, these agreements also offer rules to ensure that the resulting “free trade” is also “fair trade” or close to it.

It is clear that the Trump Administration does see some value in the existing trade agreements. Its next action on trade was to request a panel at the World Trade Organization (WTO) dispute settlement body in the U.S. trade enforcement case about excessive Chinese subsidies. This request, made on January 25, starts the official litigation process under WTO rules.

One could be forgiven for experiencing a bit of trade policy “whiplash.” On Day 1, President Trump withdrew from TPP alleging it is not strong enough for American workers; on Day 3 his Administration used WTO rules to act on behalf of American farmers. The new trade enforcement rules under TPP would have been much stronger than WTO rules in most respects. Now that TPP is gone, the United States must work within rather cumbersome WTO rules across most of the Asia-Pacific, at least until new trade deals are negotiated.

The statement directing the Office of the U.S. Trade Representative to withdraw from TPP also directed it “to begin pursuing, wherever possible, bilateral trade negotiations to promote American industry, protect American workers, and raise American wages.” USW continues to support new agreements that expand free, rules-based trade, as TPP would have done, and encourage that agricultural interests be able to continue to provide input into those negotiations.

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Trade Policy and Wheat in the Obama Administration

By Ben Conner, USW Director of Policy

Next week, the United States will hold its quadrennial pageantry to mark the beginning of a new presidential term. Since term limits prevented President Obama from running again, his administration will come to an end.

The wheat industry has not always seen eye to eye on every issue with the Obama Administration, but on trade policy there has been a great deal of common ground. As the Obama years draw to a close, it is worth reflecting on the trade policy accomplishments of this Administration.

The first major trade policy accomplishment of interest to wheat was finishing the agreements with Colombia, Panama and South Korea that were negotiated during the George W. Bush Administration, which were passed by Congress and signed into law in 2011. Tariffs for wheat went to zero as soon as the agreements entered into force. This is especially important as some of U.S. wheat’s major competitors in Australia and Canada were also negotiating FTAs with these countries.

After these agreements were finished, the focus shifted to negotiating the two largest free trade areas in terms of GDP ever attempted — the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). These agreements are full of complexity due to the scope and the number of economies involved. TPP negotiations were completed in 2015 but have not been ratified by Congress. Its future is highly uncertain in the next Administration. TTIP has much further to go, but its delay has much to do with political dynamics in the European Union. Regardless of the ultimate outcome of these agreements, the Obama Administration can rightfully be proud of its ambitious free trade agenda.

One of the most high profile initiatives affecting wheat was the Administration’s reestablishment of diplomatic relations with Cuba and accompanying efforts to reduce the regulatory burdens around trade with that market. Cuba imports no U.S. wheat today, but could be a top 10 market with the end of the trade embargo. Unfortunately, the embargo is still in place and no U.S. wheat has been sold, but these actions to improve relations with Cuba were important first steps.

A major but often overlooked accomplishment is that this Administration finally put the brakes on the World Trade Organization’s (WTO) Doha agenda, which had long since stopped being a serious avenue for opening trade. There are some countries that will still insist that Doha needs to continue, but any real prospect of reviving those negotiations ended with the 2015 Nairobi Agreement. Another accomplishment of that agreement was a phased out end to export subsidies — historically a major source of distortion in global wheat trade.

Finally, there are the WTO cases launched against China’s excessive subsidies and its opaque tariff rate quota (TRQ) administration for wheat imports. These are two of the most significant trade cases ever taken on behalf of U.S. farmers (and, of course, Chinese consumers). USW is proud to have played a major role in getting those cases going and congratulates the Administration for filing them. The incoming Administration has pointed to trade agreement enforcement as one of its priorities, so we have every reason to believe these cases will be pressed to their conclusions.

These are the trade policy accomplishments that grab the headlines. There have been dozens of other actions taken on behalf of U.S. wheat farmers that facilitate sales, keep markets open and improve the global trading system. As the Obama Administration leaves and the Trump Administration begins, the wheat industry can be grateful that the exceptionally competent top career staff at the U.S. Department of Agriculture and U.S. Trade Representative will still be in their jobs on Jan. 21, continuing their efforts on behalf of U.S. agriculture.

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Panic is Not a Good Strategy When Considering Future Trade Policies

By Ben Conner, USW Deputy Director of Policy

On Nov. 8, 2016, American voters shocked the world and themselves by electing Donald J. Trump to be the 45th President of the United States. To those who trade goods and services across the U.S. border, including wheat buyers, this may be cause for some alarm because of statements made by the President-elect over the past year.

This is, however, no time to panic. The U.S. wheat store will remain open. The President-elect has yet to enact a single policy, and campaign rhetoric always seems to have a way of adjusting to reality, particularly after a year where rhetorical flourishes played such an outsized role on the campaign trail.

And here is the reality. Much of the U.S. economy depends on a rules-based trading system, including free trade agreements (FTAs) and the World Trade Organization (WTO) agreements. All those agreements have provisions to prevent a country from giving special privileges to their producers.

The reason for that is simple enough: special privileges backfire because other countries impose their own special privileges in response. Sets of rules that create a level playing field, such as a trade agreements, allow people in each country to buy and sell without interference based on their own skills and preferences.

The network of trade agreements to which the United States is party — including NAFTA, CAFTA, the six Trans-Pacific Partnership (TPP) member countries that have existing FTAs with the United States, and the WTO — is integral to the function of the U.S. economy, because so many jobs are in whole or part dependent on international trade.

Wheat is the most export dependent grain grown in the United States and our overseas customers rely on its quality, consistency and reliability of supply. New and existing trade agreements are major contributors to the profitability of U.S. wheat farmers and their customers.

It is difficult to appreciate the scale of that dependence and the ramifications of threats to pull out of agreements or impose WTO-inconsistent punitive tariffs should any of those actually occur. However, it is interesting to see the path one formerly protectionist president took toward more open trade. President William McKinley, once one of this country’s most ardent protectionists, told a crowd shortly before his death: “Commercial wars are unprofitable. A policy of goodwill and friendly trade relations will prevent reprisals. Reciprocity treaties are in harmony with the spirit of the times; measures of retaliation are not.”

It will never be too late for President-elect Trump to come to this same conclusion. Despite his disappointing promise to pull out of the TPP, he is already advocating new bilateral trade agreements (it is worth noting that TPP is essentially a collection of bilateral agreements with some shared language).

Fundamentally altering the interests of the U.S. economic and political systems is much easier said than done. So if you are worried about the continued commitment of the United States to the global trading system, cheer up: the campaign is behind us. The work of governing comes next.

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USW Submits Annual Report on Trade Barriers to U.S. Trade Representative

By Elizabeth Westendorf, USW Policy Specialist

Every year, the U.S. Congress requires the Office of the U.S. Trade Representative (USTR) to submit a comprehensive report detailing the trade barriers and policy challenges facing exported U.S. goods and services. The annual National Trade Estimate (NTE), which came in at more than 450 pages last year, takes months of collaborative work to pull together. That is why each year, USTR asks industry stakeholders to provide input on their key trade barriers. Last week, USW submitted comments on the NTE to USTR.

Many of the trade challenges our industry faces are ongoing, unresolved issues. One topic that has been part of USW’s NTE submissions for several years is that of China’s domestic wheat subsidies. USW has shared the results of its investigation of this issue, including through the NTE, to USTR and that work finally came to fruition when the United States government announced it was taking a World Trade Organization (WTO) case against China. In its 2016 submission, USW specifically stated that it “strongly supports the dispute launched by USTR against China’s market price support programs on Sept. 13, 2016. The action is the most significant taken by the U.S. government to date in addressing the imbalances caused by subsidies that violate WTO commitments.”

In the report, USW also identified policy barriers in four broad issue areas: market access; domestic subsidies; export subsidies; and sanitary and phytosanitary (SPS) barriers. Regarding SPS barriers, USW focuses on policies that attempt to protect domestic producers from imported competition without scientifically justified reasons. Consistent USW submissions to the NTE have also facilitated U.S. government activities related to market access efforts in Canada, Brazil and Morocco. USW submitted additional comments on the EU, India, Japan, Kenya, South Korea, Mexico, Taiwan and Turkey.

The NTE submission provides a good overview of the key issues that USW’s policy team works on every year. Submitting our NTE comments annually allows us to assess global progress on these barriers and bring up any new issues we face. It also gives USTR up-to-date information on ongoing problems.

With the national rhetoric on trade turning more and more protectionist, it is important to remember that trade agreements work for American agriculture and its overseas customers, especially when they are enforced. The NTE serves a vital purpose to the enforcement function of the U.S. trade agenda. It is important that all countries play by the rules, and the USTR NTE is one important way to hold other countries accountable. USW is grateful for the continued efforts of the U.S. government on these issues.

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U.S. Industry Stays Engaged in Food Aid, Development Conversation

By Elizabeth Westendorf, USW Policy Specialist

This year, for the first time, USDA and USAID held their International Food Assistance and Food Security Conference in conjunction with the 2016 World Food Prize event in Des Moines, IA, the week of Oct. 10. The two-day event brought together people from commodity organizations, NGOs, government and academic institutions to discuss future food aid and development programming and opportunities for improvement. Representatives from USW, the National Association of Wheat Growers (NAWG) and from wheat commissions in Oklahoma, Nebraska and South Dakota attended the conference and hosted an exhibit detailing the importance of wheat to food aid and food security.

As part of the conference program, two representatives from the Jordanian government talked about their important work with wheat monetization through USDA’s Food for Progress program. Monetization is a process that funds development projects with the sale of donated U.S. commodities. The proceeds from a 2012 wheat monetization program went to Jordan’s Al-Karak Dam project, which is nearing completion. The proceeds from a second wheat monetization in 2015 were split between 10 different projects that focus on water conservation amid the country’s rising refugee populations.

Conferences like this one allow USW to connect with implementers of food aid programs and discuss how best to improve communication and commodity use efficiency. Wheat makes up, on average, 40 percent of all in-kind U.S. food aid. In marketing year 2015/16, 710,100 MT of wheat were exported for donation in food aid programs, including 410,000 MT to Ethiopia alone to help prevent famine during a historic drought. That is why U.S. wheat farmers and the organizations that represent them remain dedicated to ensuring that these programs work well and continue to be a focus for the U.S. government.

The USDA-USAID conference preceded the annual World Food Prize event that honors individuals improving the quality, quantity or availability of food in the world. This year’s prize went to four scientists for their work in biofortification — Dr. Maria Andrade, Dr. Robert Mwanga, Dr. Jan Low, and Dr. Howarth Bouis. Biofortification is the use of breeding to increase the critical vitamin and micronutrient content in staple crops. The busy week included the annual Borlaug Dialogue International Symposium in which 1,200 leaders in global food security discussed biofortification, the role of women in economic development, and the importance of food security to national security, among other topics.

Both the USDA-USAID conference and the Borlaug Dialogue featured trade prominently. USDA Foreign Agricultural Service Administrator Phil Karsting spoke at the USDA-USAID conference, where he argued that stakeholders who care about human rights and development should also care about Trans-Pacific Partnership (TPP) and enhancing free trade. U.S. Secretary of Agriculture Tom Vilsack spoke at the Borlaug Dialogue and focused on the importance of trade, and TPP specifically, to food security.

USW extends its sincerest congratulations to this year’s World Food Prize Laureates and its thanks to USDA and USAID for holding the Food Assistance and Food Security Conference. We appreciate the opportunity to participate in both of these important events because wheat is so vital to food security around the world. As Dr. Norman Borlaug, wheat scientist, Nobel Peace Prize Laureate, and World Food Prize founder, said, “If you desire peace, cultivate justice, but at the same time cultivate the fields to produce more bread; otherwise there will be no peace.”

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WTO Negotiations Facing New Realities

By USW Deputy Director of Policy Ben Conner

After attending a series of World Trade Organization (WTO) meetings in Geneva in September, it appears to me that member representatives are at the intersection of two trends influencing agricultural trade negotiations.

First, there is growing recognition that the Doha Round approach to future trade negotiations is not viable , so some countries are casting about for new approaches, while others are digging into seemingly unworkable positions. Second, more countries understand that the policy environment has shifted dramatically since the Doha Round started in the early 2000s. Many now see that the vast majority of trade distortions in agriculture now come from developing country policies.

This second point was felt like an earthquake in Geneva when the United States initiated a first-of-its-kind dispute against China’s price supports for wheat, corn and rice. U.S. industry and government officials had been talking about the problem of advanced developing country farm subsidies for years, but it was easy to ignore as long as no one thought anything would be done. What is hard to ignore now is this: one Chinese program covering three crops provides more than $100 billion in support, which is greater than the GDPs of more than 100 WTO member countries.

Negotiators are still digesting the potential impact of that case, but everyone should know that this is not simply symbolism meant to bolster the prospects of trade agreements like the Trans-Pacific Partnership (TPP). This reflects the serious problem of developing country subsidies that must be addressed. Any new negotiations need to be based on reality, particularly this reality. We at USW believe that developing country subsidies are by far causing the greatest distortions in world wheat trade today.

Outdated frameworks, in which the least ambitious participant dominated, have bogged down negotiators for years. Now, many countries are approaching the negotiations with fresh eyes, ready to tackle specific topics and go beyond the old multilateral model.

However, that is not to say that an agricultural outcome will have the effect of opening trade in wheat. In fact, the last two agriculture agreements actually had the opposite effect.

At the Bali ministerial meeting in 2013 and the Nairobi meeting in 2015, the agricultural agreements reversed some of the progress made by the WTO Agriculture Agreement. In Bali, India and other countries negotiated language, that masquerades trade-distorting price supports as food security programs. At Nairobi, WTO members notably agreed to eliminate all export subsidies but, at the same time, granted an eight-year, unlimited exemption for certain export subsidies commonly used by developing countries in violation of the original WTO Agriculture Agreement.

The next ministerial meeting will be in Buenos Aires in 2017. There, trade ministers will be under pressure to deliver something on agriculture. Again, certain advanced developing countries will try to reverse the progress already been made on trade liberalization and protect current trade-distorting programs.

The United States has clearly sent a strong signal with the China case that not following the existing rules will no longer be ignored. The top priority in Buenos Aires should be preventing further erosion of the trade liberalizing provisions of the WTO Agriculture Agreement, even if that means no new agreement on agriculture.

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