On average, the U.S. exports about half of its annual wheat crop, leading the world in wheat exports. Free and open trade is a priority for wheat growers and for NAWG.
Trade Policy for Wheat Growers
NAWG and U.S. Wheat Associates, the industry’s overseas market development organization, work together to fashion trade policy priorities for the industry.
Most of this work is done through a joint policy committee, which includes representatives from both organizations and makes recommendations to both boards for approval.
On a day-to-day basis, NAWG takes the lead on legislative lobbying activities while U.S. Wheat primarily interfaces with administrative agencies.
NAWG and U.S. Wheat Associates, which represents the industry in trade negotiations, support a comprehensive Trans-Pacific Partnership (TPP) agreement that provides improved market access and includes ambitious language on modern trade issues.
The organizations also support Japan, the Philippines and Indonesia joining the TPP framework. The wheat industry – and ag exports generally – stand to see significant benefits from the talks if those three countries join. For instance, Japan is routinely one of the largest buyers of U.S. wheat, purchasing up to 10 percent of U.S. wheat exports worth an estimated $700 million.
More about the TPP negotiations from the Office of the U.S. Trade Representative is here.
More about trade agreements from USW is here.
The U.S. wheat industry strongly supports full funding of $200 million per year for the Market Access Program (MAP) and of $34.5 million per year for the Foreign Market Development (FMD) program. These programs share the costs of overseas market development efforts undertaken by U.S. non-profit agricultural trade organizations, including U.S. Wheat Associates.
There is strong evidence that these programs are excellent investments for the U.S. taxpayer and grower, with recent studies showing that producer dollars, combined with MAP and FMD, return $115 to the economy for every $1 spent and the total economic gain to the U.S. economy from increased market development activity was $1.1 billion per year from 2002-2009. For more information, see a cost-benefit analysis of MAP and FMD by Global Insight here or a one-page summary here.
Much more about the importance of MAP and FMD is in this briefing paper.
The U.S. wheat industry strongly supported approval of free trade agreements with Colombia, Panama and South Korea. The agreements were stalled for up to five years until they were approved by Congress and signed by President Barack Obama in October 2011.
The extensive delay in Congressional consideration of the agreements hurt wheat exports significantly, especially to Colombia. As recently as 2007/2008, 70 percent of Colombia’s total annual wheat imports came from U.S. farmers. Since that time, U.S. sales have fallen to a low of 46 percent of total imports, in large part because of trade preferences other countries including Argentina and Canada have established.
It is estimated that the Cuban embargo costs the U.S. wheat industry upwards of $40 million in lost sales each year. The wheat industry strongly supports policy changes through regulations or legislation that would allow producers to tap into this market and help feed the Cuban people.
For more on NAWG’s policy in reference to Cuba, please see this briefing paper or this testimony to the House Agriculture Committee. For more on the economic effects of Cuba trade restrictions from the International Trade Commission, please see this presentation. An economic analysis of Cuba legislation from Texas A&M is accessible here.
The Doha Development Round of World Trade Organization negotiations began in 2001 with the intention of lowering trade barriers and spurring development in the less-industrialized world. Since then, these discussions have frequently stalled, and official negotiations have been on hold since the summer of 2008. Nevertheless, the U.S. wheat industry is hopeful for a successful and balanced conclusion to the Doha Round.