Cotton Case Agreement Ends Threat of Retaliation on U.S. Wheat Exports

October 2, 2014 Bookmark and Share

Following is a joint statement from U.S. Wheat Associates and the National Association of Wheat Growers.

The announcement this week that Brazil and the United States have negotiated a settlement in a long-running trade dispute will help U.S. wheat growers remain competitive in one of the world’s largest wheat importing nations.

In 2005, and again in 2008, Brazil won a case against U.S. cotton support programs and export credit guarantees in the World Trade Organization (WTO), giving it the right to impose retaliatory measures on U.S. products. Brazil’s government published a long list of U.S. goods, including U.S. wheat, against which it might retaliate. After many years of negotiation, the agreement ends the threat of retaliatory tariffs to U.S. wheat exports to Brazil.

“Brazil has been a major U.S. wheat importer since 2013,” said Shannon Schlecht, vice president of policy with U.S. Wheat Associates (USW). “U.S. wheat growers support the settlement because it protects our competitive position in Brazil, preserves the GSM-102 Export Credit Guarantee Program and provides certainty for trade with Brazil.”

In the final settlement, Brazil also agreed not to launch future disputes over U.S. farm programs for the life of current U.S. farm legislation. In return, the United States will make a reparation payment to Brazil’s Cotton Institute and place new disciplines on the GSM-102 program.

USW and the National Association of Wheat Growers (NAWG) believe the GSM-102 program remains a vital option to our customers. The agreement means that this important program will continue operating, though with its features substantially modified.

“NAWG applauds the administration’s efforts to settle this ongoing dispute, which will allow U.S. wheat growers to continue their strong trading partnership with Brazil. In addition, NAWG is pleased that negotiators found a path forward with Brazil that decouples trade opportunities for both countries from policy disagreements,” said Paul Penner, president of NAWG and farmer from Hillsboro, Kan.

“We value the WTO as an organization and support fair trade policies and adherence to WTO disciplines,” Schlecht said. “U.S. negotiators deserve credit for forging a workable agreement for U.S. agriculture that lays a smooth path for more productive relationships with our trading partners in Brazil.”

For more information about the settlement, visit the USTR website.