WASHINGTON (DTN)--U.S. Wheat Associates, the checkoff-funded, market development arm of the U.S. Wheat industry, said Feb. 9 it would oppose the free trade agreement with Australia because the agreement does not require any changes in AWB Ltd., the Australian Wheat monopoly.
"We are very disappointed that the US-Australia FTA did not address the inequities inherent in the AWB monopoly," U.S. Wheat Associates Chairman Alan Lee, a North Dakota farmer, said in a news release. "Negotiators made the same mistake when the U.S. signed the original free trade agreement with Canada, and American Wheat producers are still subject to the unfair trading practices of the monopoly up north."
The agreement includes a USTR fact sheet that said Australia committed itself to "working with the U.S. in the ongoing [World Trade Organization] negotiations on agriculture to develop export competition disciplines that eliminate restrictions on the right of entities to export." Lee said that provision appears to reverse Australia's opposition to the reform of state trading entities in the WTO, but he added, "If our issue was shunted aside for the bigger picture in this FTA, what does that realistically mean for the WTO, where even bigger issues are on the table?"
The North Dakota Wheat Commission was the first Wheat group to react to the agreement, which lifted U.S. tariffs on Australian Wheat and cereals and did not require any changes in AWB Ltd.
North Dakota Wheat Commission executive director Neal Fisher said, "This is a missed opportunity to correct one of the major wrongs in the world Wheat market."
U.S. trade negotiators, he said, "left a similar loophole open in the 1989 U.S.-Canada Free Trade Agreement. The North Dakota Wheat Commission has been fighting to close it ever since. "Our government should have required that Canada eliminate state trading enterprises like the Canadian Wheat Board. The CWB should have to bid for farmers' Wheat in competition with other companies and it should have to compete for the right to sell that Wheat on the world market."
Fisher noted that, while the CWB still has its monopoly over procurement and sales, the North Dakota Wheat Commission was successful in 2003 in getting a 14 percent duty applied to any imports of hard red spring Wheat from Canada.
Fisher also noted that the USTR fact sheet said that Australia committed itself to working with the U.S. in the WTO negotiations.
"Why wait for the WTO when we have an opportunity to require that Australia eliminate its Wheat export monopoly now?" Fisher asked.