US president Donald Trump and Chinese vice premier Liu He have signed a preliminary trade agreement that will see more American farm products and machinery sold to Chinese customers. The NPPC is happy to see this progress being made.
According to the agreement, China shall ensure additional purchases of US agriculture products by US$ 32 billion over 2 years, including US$ 12.5 billion above the corresponding 2017 baseline of US$ 24 billion in 2020 and US$ 19.5 billion above the baseline in 2021.
The trade deal looks like a first move in a difficult chess game between China and the US. Illustration: Dreamstime
Applause for the deal from NPPC
US National Pork Producers Council (NPPC) president David Herring and board member Craig Andersen were in attendance at the signing ceremony. The NPPC applauds the deal.
He said, “China is the world’s biggest producer and consumer of pork. However, the country’s hog supply has been ravaged by African Swine Fever – a disease affecting only pigs with no human health or food safety risks – resulting in a tremendous shortage of pork and mounting food price inflation. The US is typically the largest pork exporting nation in the world and generally the lowest-cost producer in the world. We are ideally positioned to address this unprecedented sales opportunity for pork in China.
“While China’s phase one commitments are welcomed, US pork exports continue to be suppressed because of the country’s 60% punitive tariffs. In order to fully capture the benefits of this deal, we need China to eliminate all tariffs on US pork for at least 5 years.”
He continued to say: “If the US continues to face 60% punitive tariffs (and a cumulative tariff of 68%), while our competitor nations are assessed an 8% tariff, US pork sales will be suppressed as China imports more pork from other nations.”
Still import duties on US pork
According to news agency Reuters, American pork still faces total import duties of 72% after including the 12% ‘most-favoured nation’ tariff. The news agency continues to write that these duties were not changed in the January 15 deal, but China is expected to boost US meat imports.
Total import tariffs on US frozen pork went down to 68% from January 1, after a cut in tariff rates on frozen pork shipments from all countries. This did not apply to carcasses, chilled pork and offal.
US pork exports to China and Hong Kong were up 49% year-on-year in value at $ 1.18 billion from January to November 2019.
Streamlined processes for feed manufacturers
Also in terms of animal feed, things are going to change. US manufacturers have had difficulty registering new feed products and facilities with Chinese authorities. In addition, exporters of DDGS face burdensome product licensing procedures resulting in export delays. The phase one agreement addresses these issues and provides US companies streamlined access to the Chinese market, according to the US trade representative.
“The Phase One economic and trade agreement signed on 15 January 2020 will provide US manufacturers of feed additives, premixes, compound feed, and distillers’ dried grains with solubles (DDGS) streamlined processes for registration and licensing to facilitate US exports to China,” according to the US Trade Representative, adding that the agreement will also result in new import protocols for US barley, alfalfa hay pellets and cubes, almond meal pellets and cubes, and timothy hay, allowing imports of such products into China.