If Trade Rules for US Beef Are Relaxed in US-China Phase One Deal- Erin Borror Sees Mind-Boggling Trade Ahead
Oklahoma Farm Report†
07 Jan 2020
The US and China are a week away from the scheduled signing of the phase one trade deal announced by President Trump back in October of 2019.
According to President Trump, it's going to be huge for U.S. agriculture- perhaps forty billion dollars in sales annually. Erin Borror, Economist for the U.S. Meat Export Federation, says we're still waiting for details about exactly how the phytosanitary standards currently in place for U.S. beef into China may or may not change, "China is the big one that's still out there that we're anxiously awaiting those details. So hopefully, as President Trump tweeted the signing on the 15th, we'll see, but yes, we are on the edge of our chairs. As Ambassador Lighthizer has said, The other barriers, besides just tariffs, are supposedly addressed in this agreement. And there is yes, a long list of those barriers, facing our U.S. Beef. I would note that China imposes these barriers on all of its suppliers and our production system we're not really set up to produce versus South America where they don't use growth hormones anyway. They have traceability requirements because of FMD." Borror adds that while China has traceability requirements and more with most of their suppliers- the question is will some of the rules put in place when the President announced the Chinese market was back open to US Beef in 2018- will those rules be relaxed? Borror adds "So, if we get big changes in the market access conditions, SPS, or sanitary-phyto requirements, then, yes, it could be mind-boggling."
"The Chinese market has been on fire again this year, and imports are massive. They're the biggest importer in the world by far, and those numbers, $7.3, billion worth of beef imported January through November. We will have bought in the U.S. somewhere over $5 billion worth of beef coming into this country, and we used to be the biggest importer in the world. So itís been quite a shift into China. The U.S currently accounts for less than 1% of China's imports.
"So itís only upward potential for us, but again we're waiting for those details and including on what the retaliatory tariff situation will look like because that's also not really been forthcoming. Currently, the U.S. Beef pays 47% tariff into China. Australia is 5%, I think, through their free trade agreement. And so our base competitor pays, basically nothing compared to what already very high priced U.S. beef because of the production requirements pays into China."
The USMEF team has been hard at work at building relationships with China, and Borror said...
more, including audio [6:25 min.]†