President Donald Trump remains resolute that China commit to specific promises on amounts of U.S. ag commodities that it would buy as part of a trade pact, Ag Secretary Sonny Perdue said Wednesday.
“I think he wants commitments,” Perdue said about Trump. “I think the expectation, from an ag purchases perspective, in his mind is pretty firm.”
So far China continues to balk at the commitments.
Trump announced in October that he expected China to commit to buying as much as $50 billion in U.S. ag commodities per year — roughly double what China would previously buy in a strong year — but Chinese negotiators are still refusing to put that in writing.
The U.S. negotiations on agricultural trade with China are running on two separate tracks, Perdue said. On the one hand, the U.S. is pushing for China to tear down its tariff and non-tariff barriers to U.S. meat, grains, oilseeds and produce. On the other track, the U.S. continues to demand that China make specific promises on the amount of U.S. agricultural commodities it will buy.
Removing the trade barriers just aren’t enough, Perdue explained, because of China’s ability and willingness to manipulate what importers — often state-controlled companies — buy.
“We’re willing to compete on a fair basis any day of the week, but when you’re a sovereign government determining what importers are going to buy, that changes everything,” Perdue said about China. “It gives us less confidence … We love the numbers being discussed, but knowing that you’ve got a sovereign power willing to control those people who are actually going to buy — will those numbers be attained or not? That’s really problematic.”
While the Chinese still have not made concrete commitments on purchases, substantial progress has been made on getting the country to agree to remove non-tariff barriers, a U.S. government official with knowledge of the trade talks tells Agri-Pulse.
U.S. negotiators have made substantial strides in convincing their Chinese counterparts to make concessions, such as reforming the country’s opaque and extremely slow biotechnology approval system and removing its ban on beef from cattle treated with hormones, the U.S. official said.
That that’s not enough, the source stressed, because of concerns China might come up with new barriers or excuses as to why it cannot buy U.S. ag commodities, the source said. And that’s why specific, enforceable commitments on purchases are needed.
But there are fresh signs of optimism that the partial, "Phase One," pact with China could become a reality soon. Perdue said he remains optimistic that the planned next round of U.S. and Chinese tariffs for Dec. 15 won’t happen.
Senate Finance Committee Chairman Chuck Grassley added to that optimism Wednesday, saying on Fox Business, “We could be possibly close to an agreement with China.”
If China opened up beef on a scale that other major importers have, U.S. exporters could ship as much as about $2 billion worth of the meat there in 2020, according to an estimate provided to Agri-Pulse by the U.S. Meat Export Federation.
“China has a lot of potential … for U.S. beef, but unless we address those significant barriers, it’s just not going to be as lucrative of an opportunity as we would hope,” Kent Bacus, director of international trade and market access for the National Cattlemen’s Beef Association, said in a recent interview.
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