If Trade Rules for US Beef Are Relaxed in US-China Phase One Deal- Erin Borror Sees Mind-Boggling Trade AheadTue, 07 Jan 2020 07:37:38 CST
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 it's been quite a shift into China. The U.S currently accounts for less than 1% of China's imports.
"So it's 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 they are starting to see some interest in adding U.S. beef to their mix, "Yes, our China team, we kind of had to do some pep rallies over the past year, year and a half, because it was a bit depressing. Not only facing the retaliatory tariffs but just the massive uncertainty. Not knowing what tomorrow might hold, these duty rates for beef have been relatively constant, so we went about 25% retaliation in the summer of 2018, and then that just increased by another 10% this past September. So they didn't end up varying that much, but still, you had the uncertainty of not knowing whether the tariff may increase or go away tomorrow, so that's not healthy when you're buying very expensive product."
Click on the LISTEN BAR below to hear the complete interview with Erin Borror as she talks With Ron Hays.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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