Wheat trade

Wheat farmers are hoping for trade deals with Canada and Mexico to be quickly ratified to facilitate an agreement with Japan.

SPOKANE — U.S. and Washington wheat industry representatives hope trade deals with Japan, Mexico and Canada can be worked out before they get caught up in politics between President Donald Trump and Democrats.

Ben Conner, vice president of policy for U.S. Wheat Associates, provided an update by conference call to the Washington Grain Commission board during their meeting March 7 in Spokane. U.S. Wheat is the overseas marketing arm for the industry.

Conner told the commission board that the U.S. trade deal with Canada and Mexico is still pending.

For Pacific Northwest wheat farmers, the deal would ease the way for a deal with Japan, Conner said.

U.S. farmers face a serious challenge by not being members of the Trans-Pacific Partnership agreement with 11 other countries, including key customers Japan and Vietnam and competing wheat-producing countries Canada and Australia.

Trump withdrew from TPP in 2017.

"In about three weeks, Canada and Australia are going to be at about a $20 per ton discount to U.S. wheat in the Japanese market," Conner said. 

U.S. Wheat expects Japanese buyers to begin shifting away from U.S. wheat to those competing countries over the next several years, Conner said.

The Trump administration is negotiating a bilateral agreement with Japan. Conner said the Japanese government will be hesitant to negotiate if they're not confident the Trump administration can get an agreement through Congress.

"To get the agreement done with Japan, we really need to get USMCA  through Congress as quickly as possible," Conner said. "Every year, we're losing more and more and these trade negotiations don't happen quickly."

Mexico is often the largest market for U.S. wheat, Conner said. Getting a new deal in place should provide stability and ease uncertainty, he said. The deal would also provide some benefits for farmers near the Canadian border.

The industry has emphasized the importance of a trade deal with Japan to the administration, U.S. Trade Representative and legislators, Conner said.

If the U.S. and Japan begin work on a bilateral agreement now, Conner hopes it can get done before entering the 2020 election season.

Trump is likely to tout such an agreement, especially given his reputation as a dealmaker, but Democrats may see political incentive to deny him the victory, Conner said.

Field Reporter, Spokane

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