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US farm exports at center stage as Trump prepares to meet Brazilian president


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US farm exports at center stage as Trump prepares to meet Brazilian president

The U.S. and Brazil expect to issue a joint statement on agriculture March 19 following a meeting between the presidents of both countries amid "great progress" in trade talks, according to a Trump administration official, at a time when U.S. lawmakers say farmers are being stifled by a lack of access to the Brazilian market.

A senior administration official told reporters March 18 that there have been "extensive discussions" between the two countries on agricultural issues, though the official declined to specify in which areas. A joint statement will be released between the two leaders March 19, the official added, which will show the "deliverables."

"I don't want to get ahead of the president and won't reveal those," the official said. "But there has been great progress."

Brazilian President Jair Bolsonaro is scheduled to meet with President Donald Trump at the White House on March 19 and then hold a news conference.

Top Brazilian Cabinet members, as well as Bolsonaro, attended a U.S. Chamber of Commerce and Brazil-U.S. Business Council event in Washington, D.C., on March 18. Tereza Cristina, Brazil's minister of agriculture, livestock and supply, told attendees that a bilateral trade agreement would be an ideal outcome for the two countries, which represent more than $100 billion in annual trade, but noted that those talks would come later.

"I think yes, we have to work towards that goal," Cristina said.

"At the second phase, I think that's possible," Cristina added. "But at the first phase, we need to listen more: What does Brazil want from the U.S.? What does the U.S. want from Brazil?" she said. "But yes, bilateral agreements are the way to go."

The meeting comes at a pressing time for U.S. wheat exporters. According to Panjiva, a division of S&P Global Inc., U.S. wheat exports fell by 11.2% on an annual basis in 2018, to $5.44 billion, due primarily to Chinese retaliatory tariffs, which led to a 70% drop in wheat exports to the Asian nation.

American wheat exports to Brazil were just $63.5 million in 2018, according to Panjiva data, after having been as high as $1.23 billion five years earlier.

On top of the lagging exports to Brazil and China, U.S. wheat exports to Mexico also fell by 22.2% in 2018, according to Panjiva.

U.S. wheat accounted for just 3.4% of total Brazilian imports of the crop last year, compared with 20.1% in 2015, Panjiva data shows. That void has largely been filled by shipments of the crop from Argentina, which now account for 92.4% of total Brazilian wheat imports.

The Bolsonaro visit comes less than a week after nearly a dozen U.S. lawmakers pressed the administration to convince Brazil to drop what it called a "longstanding trade barrier" for American wheat exports to the South American nation.

In a March 14 letter to Trump, a group of 11 Republican senators from agricultural states urged Trump to hold Brazil accountable for tariff-free wheat access to the world's eighth-largest economy.

They cited the 750,000-metric-ton duty-free tariff rate quota for wheat that Brazil agreed to more than 20 years ago, though they said Brazil has failed to live up to that commitment and instead continues to apply a 10% tariff on wheat from countries outside South America, including the U.S.

"As a result of the tariff, U.S. wheat faces a competitive disadvantage when exporting to Brazil, especially compared to Argentina," the senators wrote.

The Republicans also said the tariff rate quota if enforced would result in $75 million to $120 million in additional annual U.S. wheat sales to Brazil.