TPP 11 Puts U.S. Wheat Exports to Japan at Risk
ARLINGTON, Virginia — U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) have expressed concern that the recent announcement that the eleven remaining TPP members have concluded talks on a revised deal without us is a looming disaster for U.S. wheat farm families and related industries. It puts U.S. wheat exports at serious risk in Japan, which has been our largest, most consistent importer for decades.
President Trump recently suggested that we could reconsider the decision not to join TPP if a better deal is possible. The President is a tough negotiator and clearly wants a good deal for the United States. It would be a better deal for wheat farmers now if the Administration would apply its strength to open the door all the way to negotiating a better TPP deal or bilateral solutions to protect the crucial Japanese market and help open other wheat markets like Vietnam.
TPP 11 calls for gradually discounting effective tariffs that Japanese flour millers pay for imported Australian and Canadian milling wheat over 9 years from about $150 to about $85 per metric ton (MT). Imported U.S. wheat effective tariffs would remain at about $150 per MT.
Sources within the Japanese milling industry estimate this $65 per metric ton disadvantage would eventually force them to find alternatives to U.S. wheat and cut average total imports of Western White, dark northern spring (DNS) and hard red winter (HRW) wheat from about 3.1 million metric tons (MMT) per year to as little as 1.35 MMT per year. U.S. wheat farmers and the U.S. grain trade will essentially be writing a $500 million check every year to Australian and Canadian farmers, even at today’s relatively low wheat prices, if nothing changes before the effective tariff schedule is fully implemented.
The agreement that the eleven remaining TPP members announced was designed to provide an opening for the United States to re-engage in the agreement, so we do not have to sit on the sidelines.
American agriculture now counts on the Administration’s strong negotiating skills; and American wheat farmers, facing a calamity they would be hard pressed to overcome, now depend on it.
The TPP 11 countries include Canada and Australia, which are major competitors to the United States in the Japanese wheat market. Other TPP countries with rapidly growing demand for imported wheat include Mexico, Vietnam, Malaysia, Chile and Peru. Singapore, Brunei and New Zealand round out the remaining TPP partner countries
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About U.S. Wheat Associates
USW’s mission is to “develop, maintain, and expand international markets to enhance wheat’s profitability for U.S. producers and its value for their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 17 state wheat commissions and cost-share funding provided by USDA’s Foreign Agricultural Service. For more information, visit our website at www.uswheat.org.
About the National Association of Wheat Growers
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 levels. From their offices in the Wheat Growers Building on Capitol Hill, NAWG’s staff members are in constant contact with state association representatives, NAWG grower leaders, Members of Congress, Congressional staff members, Administration officials and the public.
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