U.S. Sens. Jerry Moran (R-KS) and Pat Roberts (R-KS) this week urged that a solution be found to end an ongoing trade dispute with Brazil that is negatively impacting U.S. wheat farmers.
Specifically, Sens. Roberts and Moran say that American agricultural producers exporting wheat to the South American country have been paying exorbitantly high taxes since Brazil agreed to establish a 750,000 metric ton (MT) duty-free tariff-rate quota (TRQ) for wheat under the Uruguay Round Agreements Act of 1994.
“Brazil has failed to live up to its commitment to the detriment of U.S. farmers,” the senators wrote in a Feb. 27 letter sent to U.S. Trade Representative (USTR) Robert Lighthizer. “Rather than open the TRQ, Brazil continues to apply a 10 percent tariff on U.S. wheat, with the option of increasing the rate to as high as the 55 percent World Trade Organization (WTO) bound rate.”
The lawmakers noted that their home state of Kansas, the nation’s largest wheat-producing state, has been hard hit by the tariffs, which could continue to rise.
“As Kansas farmers continue to face low prices and declining revenues, it is critical that Congress and the Administration work to grow export markets for U.S. agricultural commodities,” according to their letter. “By challenging Brazil’s failure to implement the wheat TRQ – including launching a trade enforcement action at the WTO if necessary – you have the opportunity to increase U.S. wheat exports to the country.”
The Brazil tariff, which the lawmakers said doesn’t apply to nations within the South American Mercosur trade bloc, puts U.S. wheat exports at a competitive disadvantage.
The senators wrote that now is the time to resolve this longstanding trade issue because the new Brazilian President Jair Bolsonaro “has indicated a desire to have a closer working relationship with the United States.”
And doing so “would be a demonstrable action to strengthen the economic ties between our countries,” wrote Sens. Moran and Roberts.
The members concluded that it’s critical for the United States “to continue to hold foreign countries to trade obligations.”
“For too long, Brazil has avoided its commitment to establish a TRQ for wheat,” they wrote. “We look forward to working with you to make certain U.S. wheat farmers have access to the Brazilian market.”