WASHINGTON, March 29, 2017 - Chinese President Xi Jinping’s upcoming visit to the U.S. has buoyed hope among the American ag sector that the Trump administration can improve trade relations between the two countries.
China is the largest market for U.S. soybeans, sorghum and other commodities, but the nation also remains a source of frustration for U.S. farmers and ag exporters.
The country could be a huge source of new revenue for U.S. cattle ranchers and beef exporters as well as rice farmers, but China hasn’t followed through on promises to the previous administration.
The secretive country isn’t big on explanations, but groups like the National Cattlemen’s Beef Association (NCBA) and USA Rice Federation are hoping Trump can get some answers when he sits down with Xi. The two leaders are expected to meet at Trump’s Mar-a-Lago resort in Florida April 6 and 7.The secretive country isn’t big on explanations, but groups like the National Cattlemen’s Beef Association (NCBA) and USA Rice Federation are hoping Trump can get some answers when he sits down with Xi. The two leaders are expected to meet at Trump’s Mar-a-Lago
Perhaps one of the biggest mysteries is why China’s market is still closed to U.S. rice. After years of negotiations, the U.S. and China agreed on protocols for trade about a year and a half ago. Officials from both governments initialed the deal, but at the last minute, China said additional signatures were needed. The deal was never finalized.
Meanwhile, U.S. rice farmers remain locked out as China continues to import millions of tons of the grain from other nations.
“At least nine other countries have access to the Chinese market and they come from areas that have much less control over the phytosanitary conditions of their crops than the U.S. does,” said Jim Guinn, a specialist in Asia trade for USA Rice Federation. “It makes no sense that we don’t have access to China’s market, and it’s unclear why the Chinese have been so intransigent in granting access to U.S. rice.”
Guinn said farmers aren’t optimistic about a possible breakthrough.
“We’ve been dealing with this issue with the Chinese for more than 10 years and have yet to reach a resolution,” he said.
Whatever the reason behind China’s obstinacy, Guinn agreed that the odds for any agricultural gains from trade will improve if the Senate confirms the nominations of Sonny Perdue as Agriculture Secretary and Robert Lighthizer as U.S. Trade Representative. Both have had generally noncontroversial confirmation hearings, but Lighthizer’s confirmation is on hold as Democrats continue to stress he will need a waiver to serve because he previously represented foreign governments while in the private sector. The Senate Agriculture Committee is scheduled to vote on Perdue today, clearing the way for a full Senate vote.
Another ag industry representative who believes Perdue and Lighthizer could help with China is Kent Bacus, NCBA’s director of international trade.
Bacus said the group is hopeful the confirmation votes are held before Xi arrives, but even if they aren’t, the Trump administration needs to pick up where the Obama administration left off, pushing for China to lift its ban on U.S. beef.
China was one of many countries that banned U.S. beef in December 2003 after the first case of bovine spongiform encephalopathy (BSE) was discovered here. While other countries dropped their bans, China continues to block U.S. beef.
Chinese Premier Li Keqiang announced last September that China would lift the ban, but – similar to the case with rice – the country has yet to follow through with its promise.
In preparation for Trump’s upcoming meeting with Xi, NCBA, the U.S. Meat Export Federation (USMEF) and the North American Meat Institute (NAMI) sent a letter to the White House this week.
China imports about $2.6 billion worth of beef, they said, and access to that market would help the entire U.S. sector, from ranchers to processors.
“We need your leadership to resolve this unfair trade practice as soon as possible,” the groups wrote in the letter to Trump. “Our industry associations represent the entire beef value chain, from ranchers to feedlot operators to meat packers and export trading companies. We believe that access to the large and growing Chinese beef market is essential to the future health of the U.S. beef industry. We understand that you have many important issues to discuss with President Xi, but we strongly encourage you to take this important opportunity to convey the urgent need for China to reopen its market to U.S. beef.”
Meanwhile, China’s beef imports continue to grow, and beef exporters in countries including Australia, Uruguay, New Zealand, Brazil, Argentina and Canada continue to benefit.
Bacus said he recognizes that it’s not an easy task that NCBA is asking of the Trump administration, but he’s hoping the White House will have better luck in making progress than the industry.
“It’s been tough for us to get answers from the Chinese on what they need from us,” Bacus said. “There’s a lot of frustration.”
One thing that China has been clear on is that the country wants to be able to export chicken to the U.S. China has never officially demanded that the U.S. lift its ban on Chinese chicken before China allows in U.S. beef, but U.S. government and industry officials have said for years that they believe this to be true.