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U.S. trade negotiators are now focusing more and more on the Transatlantic Trade and Investment Partnership (T-TIP), a proposed free trade agreement between the United States and the EU. T-TIP negotiations started in 2013 and maintained a relatively slow pace until last fall when negotiators completed the 12-country Trans-Pacific Partnership (TPP)  now awaiting congressional ratification.

Last week, government representatives met in New York for their thirteenth round of T-TIP negotiations that included stakeholder comments. While both governments praised the progress to date and expressed optimism at possibly finalizing an agreement this year, significant differences remain with increased pressure to complete an agreement before the end of President Obama’s administration. In particular, the two sides seem to have significant gaps to bridge on key agricultural issues.

Due to fears that negotiators could strike a narrower agreement without resolving those agricultural issues, a bipartisan group of 26 senators is calling for agricultural issues to remain a priority. Their recent letter highlighted the need for broad-based tariff elimination, science-based approaches to animal and plant health issues and the improvements to the troublesome EU regulatory framework for approval of biotechnology products.

U.S. wheat exports currently face a complex “margin of preference” program that allows only high protein wheat and durum into the EU duty free, as long as world prices remain above a certain threshold. USW supports a comprehensive T-TIP agreement that eliminates all wheat duties, contains a fully enforceable sanitary and phytosanitary (SPS) chapter and provides for a predictable biotechnology approval process. USW established a full T-TIP priorities document as negotiations began three years ago.

As two large wheat producers and exporters, the United States and the EU are unlikely to see major trade shifts in wheat because of T-TIP. However, the agreement does have the potential to expand access for U.S. producers to the world’s largest agricultural importer and to establish key precedents for future trade agreements.

Agricultural issues are far from the only remaining sticking points. Significant differences remain in automobile market access, the creation of an investor-state dispute settlement (ISDS) mechanism and access to government procurement programs. According to the schedule, negotiators will take stock of progress in late May, with another formal round likely in July.

By Dalton Henry, USW Director of Policy

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By Ben Conner, USW Deputy Director of Policy

This week, a team of Cuban agriculture and trade officials visited the United States to explore the U.S. grain production system at the invitation of the U.S. Grains Council, which asked USW to present information about U.S. wheat trade at a meeting with the officials in Washington, DC.

The Cuban team included representatives from the Ministry of Agriculture, Ministry of International Trade and ALIMPORT, the government agency in charge of grain imports. The group met with wheat farmers from Kansas, Texas and Maryland along with USW staff including Regional Vice President Mitch Skalicky, based in Mexico City. The discussion centered on issues that impede U.S. wheat exports to Cuba. Following meetings in Washington, DC, the Cuban team travelled to Maryland, Missouri and Louisiana to learn more about U.S. grain production, trading and processing.

This was an important opportunity ultimately because trade relationships based on mutual trust may be forged even though political barriers exist. Today, there are still requirements that Cubans must pay cash in advance of receiving U.S. agricultural exports. That requirement does not exist for any other country. In fact, these regulations make all business in the Caribbean more difficult. A baker or miller in a nearby country wanting to sell their products to Cuba pays the shipper more due to of the cost of compliance with U.S. trade laws.

Businesses exporting wheat should be able to make a judgment based on their assessment of political risk. They do it all the time. There needs to be enough trust to ensure the price risk to U.S. exporters is minimized. The arrival of Cuban grain trade officials on U.S. shores demonstrates that Cubans want to reach a position of mutual trust.

Ojalá — hopefully — this U.S. visit by Cuban agriculture and trade officials is a sign of a brighter, more trustworthy future between the people of these two countries that are so close, yet so far apart. If trade and regular interaction with farmers and agribusinesses to the north is given the opportunity to flourish, that day may come sooner

For those interested in more information on the potential of U.S. trade with Cuba, see the U.S. International Trade Commission report released Monday here.

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Working with partners around the world on shared missions has been a core function of USW throughout its history. That principle applies whether those partners are wheat growers, customers or even international market competitors. An example of this collaboration was on display last week in Winnipeg, Saskatchewan, at the third annual Canadian Global Crops symposium. USW and some of its stakeholders joined more than 250 professionals from the Canadian wheat and grain value chains at the symposium to tackle the big topics facing our industry.

The conference, appropriately themed “Innovation: Opportunity and Challenge,” focused on the application of technology in agriculture and resulting effects on the entire value chain. The broad category of advanced plant breeding techniques, including technologies such as CRISPR-cas9 and TALEN, both commonly referred to as “gene editing,” garnered particular attention. Two seed companies provided detailed explanations of these processes and their applications in breeding programs. Compared to the lengthy process of cross-breeding and its random results, advanced breeding technologies are allowing more precise improvements in plant breeding, in many cases without producing transgenic plants. Grain handling companies and government regulators also provided perspective on the new technologies, including how regulators view the processes and potential challenges that may result from uncoordinated governments’ regulations. USW supports a review process that facilitates industry discussions such as these to ensure compatibility between all governments’ efforts on these new technologies.

During the symposium, the International Grain Trade Coalition (IGTC) held strategy and general sessions. The IGTC includes non-profit trade associations, councils and corporate stakeholders interested in working to support trade in grains, oilseeds and other bulk agricultural products. The organization has multiple working groups that focus on finding solutions to trade irritants and informing discussions on global trade in grains, including expanding the use of electronic documents and harmonization of phytosanitary measures. A number of U.S. and Canadian companies and grower organizations, including USW, are active IGTC members and support its work to better facilitate trade for both our producers and customers around the world.

It is through platforms such as these that both Canadian and U.S. grower organizations are able to work together for the advancement of the entire industry and better serve the needs of the customers we share around the world.

By Dalton Henry, USW Director of Policy

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Last week marked the annual release of the National Trade Estimate (NTE) to Congress by the Offices of the U.S. Trade Representative’s (USTR). The NTE report is a 474-page- list of trade barriers facing U.S. companies and producers. It documents a range of trade barriers, including Sanitary and Phytosanitary (SPS), technical and market access restrictions. USW submitted a host of concerns to USTR on October 28, 2015.

The report highlights a few major accomplishments from 2015, including completion of Trans-Pacific Partnership negotiations and the U.S. ratification of the Trade Facilitation Agreement — the first multilateral trade agreement in the WTO’s 20-year history. Beyond the successes of the past year, the report also lays out a roadmap of future work for USTR. Numerous wheat industry priorities made the listing, two of which are highlighted here.

A new addition to the 2016 report was China’s administration of their tariff-rate quota (TRQ) system, which Chinese millers and USW have repeatedly identified as a major hurdle in expanding the use of U.S. wheat in China. The report stated, “Market access promised through the tariff-rate quota system set up pursuant to China’s WTO accession agreement has yet to be fully realized.” Each year China completely uses the portion of the TRQ allocated directly to flour millers. However, the portion held by the state is not fully utilized and almost never reallocated as required by the WTO agreement.

China is not the only country where a TRQ keeps out potential wheat exports. Nearly two decades ago, Brazil committed to a 750,000 ton duty-free TRQ. The NTE report notes that Brazil never opened the TRQ, and therefore has imported no wheat under it. Without either ad hoc access, which Brazil opened in 2013 and 2014, or a functioning TRQ, Brazilian millers must pay a 10 percent tariff to purchase supplies anywhere outside of the Mercosur trade bloc. That leaves the United States, Canada and others at a significant price disadvantage.

These two barriers are just a preview of the issues listed by USTR. USW will continue to work with our partners to pursue resolutions to these barriers that hinder our customer’s ability to purchase U.S. wheat.

By Dalton Henry, USW Director of Policy

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Before this week, Air Force One had never been to Cuba. As the call sign for planes used to transport the President of the United States, Air Force Ones have landed in over 100 countries, but not once in Cuba until this past Sunday. That day marked the start of the first trip by a sitting U.S. president to Cuba since 1928.

President Obama spent three days in Cuba, along with a large delegation of government officials and industry representatives. Most importantly for agriculture, several representatives of the U.S. Agriculture Coalition for Cuba (USACC) made the trip at the invitation of the U.S. Secretary of Agriculture. Representing wheat farmers was Doug Keesling from Kansas.

“We need to put politics aside. It is time for the people of Cuba and the United States to finally be able to meet each other face-to-face,” said Keesling. “Whether we are looking to make deals on wheat shipments or just enjoy each other’s company over mojitos and cigars, we are tired of dealing with these restrictions. It’s time to move on to the next chapter in U.S.-Cuban relations and end the embargo.”

It was an eventful few days for the USACC members, who met with counterparts in Cuban agriculture and participated in events with agriculture leaders from both U.S. and Cuban governments. USACC acted as ambassadors for U.S. agriculture in a country where there has been far too little exposure in decades, even handing out Cuban and American flag lapel pins on the streets.

A lot has happened in the nearly 90 years since a U.S. President last visited Cuba. Most significantly, for U.S.-Cuban relations, revolutionary armed forces led by Fidel Castro deposed the U.S.-backed government in Havana in 1959. Very few U.S. citizens have ever approved of the revolutionary government in Havana or supported its efforts to spread Marxist ideology beyond its shores. Since the end of the Cold War, pronounced ideological differences have persisted, though ideological conflict has largely subsided.

According to public opinion polls, most Americans support repealing the laws collectively known as the Cuba Embargo. Generally, supporters of repeal believe it would be better for both the Cuban and American people if the two countries can trade and interact freely, or at least without obstacles imposed by the United States. Along with President Obama, many Members of Congress – both Republicans and Democrats – support engagement instead of sanctions. Several from both parties accompanied the President this week in Cuba, along with Secretary of Agriculture Tom Vilsack and other Cabinet members.

Cuba is the largest wheat market in the Caribbean, but U.S. exports have dried up completely since 2011. The single largest obstacle preventing the resumption of wheat exports to Cuba is codified in U.S. law and will take an act of Congress to repeal. The embargo must end and the wheat industry will continue advocating for that action.

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Excerpts from the National Association of Wheat Growers Newsletter.

The United States has a long-history of advancing wheat quality to satisfy the demand of a growing world market for high quality, wholesome grains that become the ingredients of a sophisticated food industry. The National Wheat Improvement Committee (NWIC) — including public wheat breeders, farmers and industry stakeholders — serves a vital role by providing farmers with high quality seed stock so that the United States can produce superior quality wheats demanded by domestic and overseas markets. Unfortunately, wheat research funding relative to the economic viability of U.S. wheat is inadequate

“In many cases, due to the strong dollar, these quality wheats now garner a substantial premium, reflecting their intrinsic end-use functional value,” said USW Vice President and West Coast Office Director Steve Wirsching. “To maintain our competitive advantage in the area of quality, U.S. farmers need new breeding technology that will require continued investment from both public and private sector stakeholders.”

To sustain the research needed to improve U.S. wheat’s position in foreign markets, the NWIC has determined that Congress needs to provide $3.4 million more every year in research funds. As a part of its educational activities, the NWIC brought 21 wheat breeders and stakeholders to Washington, DC, March 15.

Armed with a priority list of critical research appropriation requests, NWIC members made their case with key contacts in USDA and Congress. Their requests included full funding for the U.S. Wheat and Barley Scab Initiative and next-generation genotyping, which will facilitate the application of genomic information and DNA marker technologies for improvement and breeding of wheat, barley and oat varieties.“It is crucial that Congress is aware of the necessity for continued, stable investment in wheat research,” said NWIC Chairman Dr. Paul Murphy, from North Carolina University. “The next decade holds tremendous promise based on emerging technologies that were not possible even five or ten years ago. This is a wonderful time to be a wheat researcher because we are developing technology to improve efficiency, address vulnerabilities such as disease, insect and abiotic stresses, and maintaining the quality of wheat we need to help feed the world.”

The NWIC believes the benefits of increased research investment will cascade from farmers to the world’s millers, bakers, brewers and consumers.

Recently, the USDA has also made a case for agriculture research funding. As reported in Agri-Pulse © on March 16, the leaders of USDA’s research agencies told lawmakers on the House Agriculture Appropriations panel why federal investment in agricultural research is critical to protecting the national food system and supporting American producers. Read the full story from Agri-Pulse here.

 

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“As a neutral forum, FAO has been promoting debates, dialogues and exchanges of information in order to enhance our knowledge of a broad portfolio of tools and approaches to eradicate hunger, fight every form of malnutrition and achieve sustainable agriculture.” That is how Jose Graziano da Silva, Director-General of the Food and Agriculture Organization of the United Nations, opened the recent FAO-hosted international symposium, “The Role of Agricultural Biotechnologies in Sustainable Food Systems and Nutrition.”

The symposium focused mainly on the broad range of biotechnologies that could result in yield increases, better nutritional qualities, and improved productivity of crops, livestock, fish and trees benefitting family farms. These include many applications such as fermentation processes, bio-fertilizers, artificial insemination, the production of vaccines, disease diagnostics, the development of bio-pesticides and the use of molecular markers in developing new plant varieties.

UN statistics indicate that one out of every nine people in the world is currently unable to eat enough nutrient energy to conduct an active and healthy life. In this context, Graziano da Silva said biotechnologies, knowledge and innovation must be available, accessible and applicable to family farmers and small holders.

Such issues are getting a wide hearing these days, including by the Philippine government Departments of Agriculture, Science and Technology, Environment and Natural Resources, Health, and Interior and Local Government. These agencies this week issued a joint ruling expected to lift a temporary ban on research, field-testing, commercialization and importation of genetically modified crops and biotech products in the country imposed by the country’s Supreme Court last December.

The scientific and academic community, farmer groups, traders, food and feed processors, and livestock producers had all criticized the ban. Dr. Emil Q. Javier, a noted Filipino scientist, academician and chair of the Coalition for Agriculture Modernization in the Philippines, said the temporary ban helped change public opinion about the science and benefits of genetically modified organisms by drawing attention to the issue and encouraging researchers to raise their voices about such advances in science and technology.

More specific to wheat, leaders from the National Association of Wheat Growers (NAWG) are raising concerns about the economic viability of wheat production in the United States, and promoting the potential role of all new technologies to help.

For example, NAWG is developing a National Wheat Action Plan and a yield contest. In addition, at the recent Commodity Classic event, NAWG’s past president Brett Blankenship said the industry also wants to focus on such improvements in seed technologies as biotechnology and other “new breeding techniques shy of GMO.”

The Washington farmer spoke in favor of advancements in wheat genetics. When asked if he would grow biotech wheat on his own property, Blankenship said that “would be a marketing decision more than an agronomic one.” He pointed to the high volume of Washington wheat exported to markets that are “sensitive” to biotechnology.

For more information about the joint positions of USW and NAWG on agricultural biotechnology, visit here.

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By Elizabeth Westendorf, USW Policy Specialist

When it comes to analyzing the sustainability of agricultural crops there is a tendency to apply generalized metrics or standards to a wide swath of scenarios. While there is value in using generalized metrics, broad stroke approaches can miss the small details that often make a big difference in regional situations. Seeing the whole forest is important, but sometimes you learn more by focusing a little more on individual trees.

Let us discuss wheat, for example. This is a crop with many specific advantages often not considered in a sustainability analysis. Farmers tend to grow wheat on marginal land areas that do not receive enough water for other agricultural production or in areas too cold or too dry for other crops. In some regions and systems, it plays a vital role in rotations with other row crops by providing residue in a soybean rotation and a water-saving role in irrigated corn or sorghum. In assessing wheat’s sustainability, generalized base metrics of water usage do not take in the whole picture. Wheat’s true sustainability should also include what it adds to the entire agricultural system, and how it complements other crops while providing an essential food grain for literally billions of people.

One area of wheat production that has been criticized for its sustainability in the past is Desert Durum® in the desert southwest United States. Unlike most other wheat production, Desert Durum receives almost all of its water from irrigation. However, it uses less irrigation water than many of the other crops grown in that region, and farmers are constantly working to increase irrigation efficiency.

A recent study by Dr. George Frisvold of the University of Arizona analyzed sustainability metrics for water use in Arizona small grain production and found that most generalized metrics of sustainability do not adequately reflect the true nature of this system. Wheat, and specifically Desert Durum, plays an important role in sustainable agriculture in the Southwest. Using wheat in a rotation with vegetables in this area increases farmer profit significantly and maximizes economic productivity of water use. In addition, the study showed that the amount of water necessary to produce one bushel of Desert Durum in Arizona has declined by 18 percent over the last 30 years.

In the case in desert wheat and durum production, as in other U.S. wheat producing regions, different systems and environments face different challenges and producers adapt with different sustainable solutions. A general measure can never fully capture all of those nuanced solutions comprehensively.

For more information, visit https://bit.ly/1LROd1O, or https://www.thesustainabilityalliance.us/.

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By Elizabeth Westendorf, USW Policy Specialist

Two weeks ago, government officials from Canada and the United States met for the biannual Consultative Committee on Agriculture — a committee designed to facilitate cross border trade flows and cooperation. In preparation for this meeting, USW sent a letter to the USDA highlighting the need for Canada to correct its discriminatory treatment of foreign grain. Both countries have a strong commitment to cross-border collaboration and open trade, but Canada’s protectionist measures go against these principles and deny U.S. wheat farmers access to a market that is right next door.

While Canada is one of the United States’ largest trading partners, USW continues to have concerns about the closed nature of its bulk grain handling system, which will not allow U.S. wheat to receive an official grade commensurate with its quality. Though Canada privatized the Canadian Wheat Board in 2012, it has not completely liberalized its wheat industry. Instead of letting U.S. wheat into its bulk grain handling system, Canada downgrades all foreign wheat to the lowest grade, feed wheat. U.S. wheat is of comparable quality to Canadian wheat, so this downgrading of all foreign wheat is a blatantly protectionist action. It denies U.S. farmers access to the market across the border, access that Canadian farmers have if they choose to bring their wheat to U.S. elevators during harvest. This lack of access means that when there is a price premium at Canadian elevators near the border, as we saw in the late summer and fall of 2015, U.S. farmers cannot take advantage of those higher prices.

USW hopes that Canada’s new government will commit to reform its Grains Act and allow foreign grain to receive the same treatment as domestic. The United States repealed Country of Origin Labeling (COOL) for meat in December 2015 as Canada requested, but Canada’s discriminatory wheat treatment does much of the same thing as COOL. Now that the United States has domestically addressed its treatment of Canadian livestock, it seems only fair that Canada fix its treatment of U.S. wheat. This will ensure a healthy continuation of the long-term partnership between the two countries. Governments should never be responsible for segregation that market forces could manage more efficiently. USW is happy to see our Canadian industry counterparts calling for reform alongside us, and we look forward to Canada continuing to break down barriers to the free trade of wheat.

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By Ben Conner, USW Deputy Director of Policy

A professor once told me this about achieving goals: “If you don’t write it down, it will never happen.” On behalf of the farmers we represent, USW takes a similar approach to our policy priorities: we write them down for the board to review every year. That happened again last week at the USW Board of Directors meeting in Washington, DC.

USW divides policy goals into three general categories: the World Trade Organization (WTO), free trade agreements (FTAs) and U.S. government policies. USW priorities in all three categories reflect our mission, which is ultimately to enhance the profitability of U.S. wheat producers and their customers.

The WTO category includes both trade enforcement and negotiations. A major policy priority is to ensure that wheat-producing countries follow WTO rules. Right now, a number of major developing countries are blatantly ignoring those rules, costing U.S. farmers in the form of lower exports and prices, and hurting their overseas customers in the form of more expensive domestic supplies. Studies conducted for USW estimated U.S. wheat farmers are losing more than $1 billion in revenue from domestic support policies in just four countries: China, Turkey, Brazil and India. Some of those countries have blatantly ignored WTO import rules in order to protect domestic wheat sectors. That is unacceptable and underscores the need to enforce past trade commitments. Similarly, our board supports negotiations through the WTO that create a more level playing field, but opposes rules that weaken current disciplines in the WTO Agreement on Agriculture or in continued negotiations under the failed Doha framework.

Free Trade Agreements are another priority. If the WTO negotiations remain at an impasse, aggressive market access gains will only come through bilateral regional sectoral trade agreements. The Trans-Pacific Partnership (TPP) is now signed and, hopefully, will soon be ratified by legislatures including the U.S. Congress. Beyond that, the wheat industry is hoping for rapid TPP expansion to other countries in the Asia-Pacific region as well as to new FTA opportunities.

Finally, U.S. government policies also affect U.S. wheat export potential. One of our priorities is on-going funding for the beneficial federal market promotion programs that — along with investment from state wheat commissions — help organizations like USW provide valuable services and information to customers around the world. USW also supports an end to the U.S. embargo of Cuba.

Now that we have written our 2016 Policy Priorities, it is time to make it happen. We are passionate about the profitability of farmers and their overseas customers, so we will be working hard to remove the policy obstacles in the way.