The United States and Brazil have agreed to steps aimed at lowering barriers to agricultural trade, focusing on wheat, pork and beef, the presidents of the two nations said in a joint statement.
Brazil will allow the United States to export 750,000 tons of American wheat with no tariffs, while the two countries agreed to “science-based conditions” to allow the United States to export pork to Brazil, U.S. President Donald Trump and Brazilian President Jair Bolsonaro said. The United States also agreed to send inspectors to Brazil for a “technical visit” to audit Brazil’s beef inspection system so that Brazilian beef exports to the United States could resume, the two leaders said.
The U.S. wheat industry is celebrating the new export opportunities. At present, wheat faces a 10% duty in Brazil unless it was grown in the fellow Mercosur countries of Argentina, Paraguay, or Uruguay. Brazil agreed in 1995 to create a tariff-rate quota but offered it rarely. “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,” Ben Scholz, president of the National Association of Wheat Growers, said in a statement. At current prices on the futures markets, 750,000 tonnes of wheat are worth $125 million. The USDA says Brazil imports more than 7 million tonnes of wheat a year. The U.S. is forecast to export 27 million tonnes of wheat during the current trade year. The U.S. has a huge wheat stockpile, forecast to equal a six-month supply when the 2019 crop is ready for harvest. Exports are an important outlet, accounting for half of annual consumption.