U.S. ag negotiator convinced China on board

The official who negotiated the Phase 1 trade deal calls Chinese compliance with the agreement’s targets a ‘no-brainer


By Sean Pratt, The Western Producer (Canada)

October 8, 2020


There is still plenty of skepticism about China meeting its Phase 1 commitments in 2020, but not for the man who negotiated the trade deal.


The pact calls for an increase in China’s annual agricultural imports to US$40 billion in 2020 and 2021, up from the previous high of $24 billion in 2017.


That 2020 target is going to be a “no-brainer,” according to Gregg Doud, chief agricultural negotiator for the U.S. Trade Representative.


Exports of a variety of U.S. agricultural goods to China have been picking up in recent weeks and months and that has ignited commodity markets.


Many analysts remain unconvinced that China will fully live up to its commitments. Even U.S. Agriculture Secretary Sonny Perdue said on Oct. 2 that he’s not sure they will make it.


But during a recent Ag Outlook Forum hosted by the Agribusiness Council of Kansas City and Agri-Pulse, Doud said a lot can happen in the last few months of the year.


He noted that China bought $12 billion of U.S. soybeans in 2017 and $10 billion of that business occurred in the last quarter of the year.


He also mentioned that too many analysts are solely focused on soybean trade and are forgetting the structural changes that have occurred to facilitate trade in commodities like meat and dairy.


Doud said China agreed to make 57 structural changes in the Phase 1 agreement.


“I’m here to report to you today 50 of those are done,” he said.


“This was a massive undertaking on the part of the Chinese government and the part of our government.”


Prior to the agreement there were 1,500 agricultural facilities eligible to export products to China. Today there are over 4,000 and that is why trade is starting to flow.


Rich Nelson, chief strategist with Allendale Inc., thinks there is a 50 percent chance China completely fulfills its Phase 1 commitments for 2020. That is up from his 30 percent estimate in early-August...


... Doud said U.S. negotiators are still in weekly and sometimes daily contact with their Chinese counterparts. There is a new spirit of co-operation between the two countries...


... The U.S. Animal and Plant Health Inspection Service volunteered to conduct videotaped audits on behalf of China.


“Lo and behold it worked. China looked at the video and said, ‘you’re open,’ ” said Doud...