Brazil has agreed to lift its ban on U.S. pork and make good on a 24-year-old promise to set up an annual 750,000-metric-ton tariff rate quota to allow in U.S. wheat, the two countries announced Tuesday after their presidents held a joint press conference at the White House.
Brazil originally agreed to set up the wheat TRQ that was expected to benefit mainly the U.S. and Canada in 1995, back when Brazil joined the MERCOSUR trade bloc that includes Argentina, Paraguay and Uruguay. The 10 percent tariff was lifted for those neighboring South American countries, but Brazil never followed through with the TRQ designated for all non-MERCOSUR countries, despite demands from Brazil’s own millers who wanted to make sure they always had plenty of access to wheat supplies.
Brazil produces 5-6 million tons of wheat per year, but the country consumes about 10 million tons, according to the U.S. Wheat Associates. On infrequent occasions, Brazil will temporarily drop its tariff on U.S. wheat only when imports are desperately needed.
The announcement today was for “American wheat,” but an administration official confirmed for Agri-Pulse that the TRQ will be for all “for non-Mercosur origin wheat.”
That being said, when Brazil sporadically lifted its tariff in the past on non-MERCOSUR countries, U.S. wheat ended up supplying more than 80 percent of the imports Brazil allowed in, according to a spokesman for the U.S. Wheat Associates.
“This is a big win for U.S. wheat farmers, the Trump Administration, and members of Congress who have pushed for action on this issue,” said Ben Scholz, president of the National Association of Wheat Growers. “I’m glad to see Brazil fulfill its commitment and look forward to a stronger trading relationship between us.”
The U.S. has also been insistent for years that Brazil stop protecting its domestic producers from competition by refusing to accept USDA’s assurances that it is safe. The National Pork Producers Council has previously accused Brazil of having “unscientific mitigation requirements and other sanitary issues not based on science.”
In return for Brazil opening the wheat TRQ and the country’s pledge to approve U.S. pork, the Trump administration is promising USDA’s Food Safety and Inspection Service will accelerate its process of making sure Brazilian beef is safe for U.S. consumers.
“In order to allow for the resumption of Brazil’s beef exports, the United States agreed to expeditiously schedule a technical visit by (FSIS) to audit Brazil’s raw beef inspection system, as soon as it is satisfied with Brazil’s food safety documentation,” the two countries said in the joint statement.
Brazil has been responding to concerns brought up in the most recent audit by FSIS, which shut down Brazil’s beef exports in June 2017. U.S. inspectors at ports found “repeated import violations such as abscesses, ingesta and unidentified foreign material (in) raw intact beef product” from eight Brazilian packing houses.
“One of the big elements of the relationship is trade,” President Donald Trump said Tuesday in a joint press conference with Brazilian President Jair Bolsonaro. “Brazil makes great product and we make great product and our trade has never been as good as it should be in the past. In some cases it should be far, far more. Our trade with Brazil will go up substantially in both directions.”
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