U.S. Wheat Trade Policyby U.S. Wheat Associates
Annual Report 2001, September 17, 2001
Export Market Development Must Have Adequate Federal Funding
The wheat industry supports, and needs, aggressive funding for the Foreign Market Development (FMD) program and the Market Access Program (MAP). The largest source of funding, and the most important single tool, for U.S. Wheat Associates activities is FMD, which provides around $6 million to USW for office space, overseas salaries and activity budgets for 15 offices servicing over 100 countries. In recent years, in spite of rising costs, total funding for FMD has remained static at about $32.5 million. This program, which is so vital to many cooperator groups, should be increased to no less than $43.25 million. The second most important federal program providing funds to USW is the Market Access Program, which has been an invaluable tool for building markets. MAP funds, though accounting for less than 10% of the USW budget, are essential as we develop consumer promotion and educational programs. Funding for MAP has been reduced over recent years despite increased promotion activity by our competitors. The wheat industry has urged Congress to increase the budget for MAP to no less than $200 million. Further, any EEP funds that are unused should be redirected to market development.
Emerging Markets Need More Flexibility in U.S. Credit Programs
Commercial export credit guarantee programs administered by the USDA facilitate trade with countries that do not have access to adequate commercial credit. Our competitors complain about these credit programs, call them unfair trade subsidies and demand that the programs be scaled back. Not surprisingly, they are wrong. The U.S. should do more -- not less -- to provide credit to the markets that most need it, while meeting its obligations under global trade rules. Rather than scaling back the credit programs, we need to put more flexibility into them.
State Wheat Export Desks Must be Stripped of Monopoly Powers
One of the most important issues for the wheat industry in the World Trade Organization negotiations is bringing the Australian Wheat Board and the Canadian Wheat Board into free and open competitive environment, i.e., abolishing anachronistic monopoly control. Together, these two boards account for a third of the market share in world wheat trade, so when their tactics cause distortions, a huge part of the market is skewed. The U.S. needs to go to the WTO negotiating round fully committed to demanding that the wheat boards be stripped of their monopoly powers and be made transparent.
U.S. Wheat Associates strongly supports the action of the North Dakota Wheat Commission which filed a Section 301 petition with the Office of the U.S. Trade representative seeking an investigation into, and action against, the government of Canada and the Canadian Wheat Board. The state commission charged the CWB with unreasonable and unjustifiable discriminatory pricing activities in both the U.S. domestic market and in third country export markets.
USW has also raised concerns about potential U.S. - Australia talks aimed at initiating a free trade deal. Simply put, if Australia wants 'free trade' with the U.S., then they must open themselves to fair competition with the U.S., USW president Alan Tracy told the Australian trade minister in April 2001.
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