Originally published in the U.S. Wheat Associates Wheat Letter, Sept. 13, 2012 edition.
Here in the United States, work continues to promote trade and food security, even though Washington has been relatively quiet with Congress out of town for the past month and with much attention paid to the U.S. presidential campaigns.
Last week, leaders gathered in Vladivostok, Russia, for the Asia Pacific Economic Cooperation (APEC) summit. One major focus was free trade and food security. The leaders reiterated that free trade is vital to food security and continued their commitment to sustainable development. Members also agreed to lower tariffs on “green” goods such as wind turbines. APEC’s members represent more than 50 percent of world gross domestic product and 40 percent of world trade as well as a growing regional market for wheat.
USW agrees with APEC that trade restrictions work against countries trying to achieve food security and was pleased to hear that the Russian government plans to keep the door to its wheat open for exports, at least at this time. Unfortunately, French President François Hollande has launched a global campaign to win support for creating strategic stockpiles of agricultural commodities as “protection against [market] volatility.”
“A government-owned stockpile would increase market instability – just what a food insecure country doesn’t need – by adding yet another exogenous variable to grain prices,” said USW President Alan Tracy. “It makes far more sense to let the market send the right signals to all players than to have the price moving over speculation about what stockpile management decisions governments may or may not take.”
While gathered in Vladivostok for the APEC meeting, Trans-Pacific Partnership (TPP) trade ministers released a statement hailing progress on the agreement and called for negotiators to finish their work as quickly as possible. To that end, TPP negotiators are currently meeting in Leesburg, VA, for the 14th round of negotiations. Negotiations were originally expected to be completed before 2013 but they will continue on numerous outstanding issues and the pending addition of Canada and Mexico to the talks. U.S. wheat producers strongly support this regional agreement as a catalyst for lowering barriers to trade for U.S. wheat and boosting economic growth in the region.