Brazil is implementing an annual duty-free tariff rate quota (TRQ) of 750,000 metric tons (MT) of wheat imports.
“At a time of low prices and trade uncertainty, this is welcome news to U.S. wheat growers, especially in Kansas, the largest wheat producing state,” said Sen. Pat Roberts, R-Kan., chairman of the Senate Committee on Agriculture, Nutrition, and Forestry.
Brazil first agreed to this TRQ for wheat some 24 years ago when it joined the World Trade Organization. The Brazilian government is now moving forward with developing a final process and date for implementing the TRQ for hard red winter wheat and soft red winter wheat.
Brazil’s implementation of this TRQ fulfills a commitment made to President Trump by President Bolsonaro in March and reflects a desire to deepen trade and economic ties between both countries.
“Brazil is a quality-focused wheat market and its flour millers recognize that U.S. wheat can help them better meet their customers’ needs,” said U.S. Wheat Associates President Vince Peterson. “Opening the TRQ will give those millers more consistent access to our wheat classes while still having the option to source from other countries. That is how the market should work and we welcome this opportunity.”
“This solution to a long-standing problem is a result of the administration’s advocacy for American farmers and will allow our wheat exporters to compete on a level playing field,” said U.S. Trade Representative Robert Lighthizer. “We look forward to increased exports of American wheat to Brazil.”
"We are excited about the additional export opportunity U.S. wheat farmers will have with the opening of this TRQ," said Agriculture Secretary Sonny Perdue. "Exports are critical to the success of our farmers and the United States looks forward to once again having stable access to this important wheat market.”
Brazil is the fourth largest wheat importer in the world, but Argentina and other countries in the South American trade bloc, Mercosur, have had a competitive advantage with mostly unlimited duty-free access to the Brazilian market. Wheat imports from countries outside the Mercosur agreement are subject to a 10% tariff.
However, Brazil opened provisional TRQs in 2008, 2013 and 2014 because its Mercosur partners had wheat supply challenges, and U.S. wheat made up more than 80% of imports.