Turkey should not retain GSP Preferences without fixes on flour subsidies
September 26, 2018
ARLINGTON, Va. – An on-going series of policies that disrupts global wheat demand for U.S. wheat and does not comply with World Trade Organization rules should disqualify Turkey for eligibility under the Generalized System of Preferences program. U.S. Wheat Associates testified to that effect at a hearing Sept. 26, 2018, held by the Office of the U.S. Trade Representative.
The GSP program provides preferential access to the U.S. market for developing countries that meet program standards. In 2017, Turkey exported $1.7 billion in goods to the United States under GSP, making it one of the program's largest beneficiaries. However, the law authorizing GSP requires beneficiary countries to refrain from engaging in unreasonable export practices. U.S. Wheat Associates believes that Turkey's inward processing system for wheat and flour functions as an unreasonable export practice.
"Farmers have been complaining about Turkish flour for the better part of a decade due to the displacement of U.S. wheat in critical markets," said USW Vice President of Policy Ben Conner, who represented USW at the hearing. "The fundamental problems are Turkey's excessive domestic support and high tariffs combined with an inward processing regime that does not meet World Trade Organization standards."
Turkey is the world's largest flour exporter and in 2017 was the ninth largest exporter of wheat and wheat equivalents. Turkish flour not only displaces U.S. wheat in overseas markets but also harms U.S. wheat customers in local flour milling industries. One of USW's top policy priorities is to see Turkey bring its wheat policy regime in line with its WTO commitments.
To read the full USW submission to USTR, go to https://www.uswheat.org/wp-content/uploads/2018/09/P-U.S.-Wheat-Associates-Submission-on-Turkey-GSP-Eligibility-Review.pdf.