WASHINGTON — Editor’s note: The below statements were released after representatives from the United States and China signed the Phase One trade agreement.
U.S. Secretary Perdue issued the following statement after President Donald J. Trump signed the historic Phase One Trade Agreement between the United States and China:
“This agreement is proof President Trump’s negotiating strategy is working. While it took China a long time to realize President Trump was serious, this China Phase I Deal is a huge success for the entire economy. This agreement finally levels the playing field for U.S. agriculture and will be a bonanza for America’s farmers, ranchers, and producers,” said Secretary Perdue. “China has not played by the rules for too long, and I thank President Trump for standing up to their unfair trading practices and for putting America first. We look forward to exporting to Chinese customers hungry for American products.”
The United States and China have reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years. Importantly, the agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement. The United States has agreed to modify its Section 301 tariff actions in a significant way.
Information on specific chapters of the Phase One agreement is provided below:
Agriculture: The Agriculture Chapter addresses structural barriers to trade and will support a dramatic expansion of U.S. food, agriculture and seafood product exports, increasing American farm and fishery income, generating more rural economic activity, and promoting job growth. A multitude of non-tariff barriers to U.S. agriculture and seafood products are addressed, including for meat, poultry, seafood, rice, dairy, infant formula, horticultural products, animal feed and feed additives, pet food, and products of agriculture biotechnology.
Intellectual Property: The Intellectual Property (IP) chapter addresses numerous longstanding concerns in the areas of trade secrets, pharmaceutical-related intellectual property, geographical indications, trademarks, and enforcement against pirated and counterfeit goods.
Technology Transfer: The Technology Transfer chapter sets out binding and enforceable obligations to address several of the unfair technology transfer practices of China that were identified in USTR’s Section 301 investigation. For the first time in any trade agreement, China has agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government. China also commits to provide transparency, fairness, and due process in administrative proceedings and to have technology transfer and licensing take place on market terms. Separately, China further commits to refrain from directing or supporting outbound investments aimed at acquiring foreign technology pursuant to industrial plans that create distortion.
Financial Services: The Financial Services chapter addresses a number of longstanding trade and investment barriers to U.S. providers of a wide range of financial services, including banking, insurance, securities, and credit rating services, among others. These barriers include foreign equity limitations and discriminatory regulatory requirements. Removal of these barriers should allow U.S. financial service providers to compete on a more level playing field and expand their services export offerings in the Chinese market.
Currency: The chapter on Macroeconomic Policies and Exchange Rate Matters includes policy and transparency commitments related to currency issues. The chapter addresses unfair currency practices by requiring high-standard commitments to refrain from competitive devaluations and targeting of exchange rates, while promoting transparency and providing mechanisms for accountability and enforcement. This approach will help reinforce macroeconomic and exchange rate stability and help ensure that China cannot use currency practices to unfairly compete against U.S. exporters.
Expanding Trade: The Expanding Trade chapter includes commitments from China to import various U.S. goods and services over the next two years in a total amount that exceeds China’s annual level of imports for those goods and services in 2017 by no less than $200 billion. China’s commitments cover a variety of U.S. manufactured goods, food, agricultural and seafood products, energy products, and services. China’s increased imports of U.S. goods and services are expected to continue on this same trajectory for several years after 2021 and should contribute significantly to the rebalancing of the U.S.-China trade relationship.
Dispute Resolution: The Dispute Resolution chapter sets forth an arrangement to ensure the effective implementation of the agreement and to allow the parties to resolve disputes in a fair and expeditious manner. This arrangement creates regular bilateral consultations at both the principal level and the working level. It also establishes strong procedures for addressing disputes related to the agreement and allows each party to take proportionate responsive actions that it deems appropriate.
Farmers Welcome Opportunities from China Agreement
The United States and China today signed a “Phase 1” trade agreement that both countries say will lead to increased purchases of U.S. agricultural products by China. The following statement may be attributed to American Farm Bureau Federation President Zippy Duvall:
“Today’s signing is an important step in giving America’s farmers and ranchers the ability to get back to business in the global market.
“China was once the largest market for U.S. agricultural products but has dropped to fifth largest since retaliatory tariffs were introduced. This agreement will help turn around two years of declining agricultural exports. The potential of tens of billions more in exports is welcome news for farmers who are eager to compete on a more level playing field.
“This is a great way to start the new year, but there is more work to do. We encourage the Senate to pass the U.S.-Mexico-Canada Agreement to increase export opportunities with our North American neighbors. We also look forward to additional trade agreements with countries that are locking-in deals with our competitors. This must be a focus in 2020.”
- The agreement takes effect in 30 days.
- Over the next two years, China could potentially purchase up to $50 billion worth of agricultural products annually, according to U.S. officials.
- As a result of the agreement the U.S. did not impose threatened tariffs on $160 billion of Chinese imports in 2019.
First Phase of U.S.-China Trade Deal Finalized
National Farmers Union Cautiously Optimistic Agreement Will Stabilize Agricultural Export Markets
In an effort to ease tensions between their two countries, President Donald Trump and Chinese Vice Premier Liu He today signed the first phase of a trade agreement. At the time of the signing, the deal’s text had not yet been published. However, according to the White House, China has agreed to “structural reforms” on trading, currency, and intellectual property rules and practices. The country will also reportedly increase its purchases of American goods and services by at least $200 billion over the next two years, which includes $40-50 billion worth of agricultural products. Though China has confirmed that it will increase its agricultural purchases, it has not publicly committed to a specific dollar amount, nor has it indicated which products it plans to buy.
The progress comes as a relief to National Farmers Union (NFU), which has consistently expressed concern about the consequences of President Trump’s antagonistic trade policy for American farmers and ranchers. But because the terms of the deal are still largely unclear, the organization continues to be apprehensive about its implications for agriculture and China’s trade practices.
In a statement, NFU President Roger Johnson conveyed cautious optimism about the first phase of the agreement and pushed for stronger and more enforceable provisions in the second phase:
“After so many months of uncertainty and escalating tensions, it is a good sign that our two countries appear to have found common ground. We are hopeful that this deal will meaningfully address China’s problematic trade practices and intellectual property theft as well as finally establish some stability for American farmers’ export markets.
“But given the numerous deals that have been reached and then breached in the past two years, we are also skeptical. And without more concrete details, we are deeply concerned that all of this pain may not have been worth it. Not only has this trade war cost farmers billions of dollars worth of sales to China, but it has also bruised our reputation, making other trading partners reluctant to work with us. To justify these lasting damages, this deal must deliver more than vague, unenforceable, short-term commitments – we need real and lasting behavioral change from China, and we need reliable and robust agricultural export markets. That is the standard the Trump administration should be aiming for as it negotiates the next phase of this agreement.”
Statement on Phase One U.S.-China Deal Signing
Today, Farmers for Free Trade spokesperson and 4th-Generation Montana wheat farmer, Michelle Erickson-Jones released the following statement after the Phase One U.S-China deal was signed.
“While Phase One makes incremental progress, it remains to be seen whether it will deliver any meaningful relief for farmers like me. This deal does not end retaliatory tariffs on American farm exports, makes American farmers increasingly reliant on Chinese state-controlled purchases and doesn’t address the big structural changes the trade war was predicated on achieving. The promises of lofty purchases are encouraging but farmers like me will believe it when we see it.
“In the months ahead, we will be closely scrutinizing the purchase promises in this agreement. We will see whether Phase One takes steps to dig out from the hole the trade war created or whether like previous ag purchase promises it is all talk. In the meantime, the Administration should waste no time in returning to the negotiating table and reaching an agreement that ends the trade war for good.”
NCGA at White House for U.S.-China Phase One Signing
National Corn Growers Association President Kevin Ross today attended a White House ceremony, commemorating the signing of the phase one deal between the United States and China. Ross made the following statement.
“Signing the phase one agreement with China is a step in the right direction to resolving the trade dispute with China and restoring the trading relationship between our two countries. China holds tremendous opportunity for American corn, ethanol and DDGs and NCGA looks forward to learning further details of what phase one will mean for these products. As more specifics become available, we will closely monitor implementation to ensure that the commitments are upheld and that U.S. corn farmers resume trading with Chinese customers. NCGA urges the Administration to quickly commence phase two negotiations and work to resolve retaliatory tariffs.”
Soy Growers Appreciate Tangible Progress with China,
Have Renewed Hope for Tariff Resolution
The soybean industry applauds the Administration for making considerable strides with China in its Phase 1 deal and is hopeful the agreement will lead to additional measures that restore open trade between the two countries, including a negotiated solution in the next phase that removes tariffs on American soybeans shipped to China.
“We have long supported changes to how China conducts business with the world, in agriculture and other industries. Today’s signing addresses many of those concerns and is a positive for the U.S., including reduction of non-tariff barriers to trade that are important to soybean growers and other agriculture groups.” said Bill Gordon, soy farmer from Worthington, Minn., and ASA president.
Changes outlined in the Phase 1 deal are encouraging: Increased agriculture purchases; a more predictable, efficient, science- and risk-based regulatory process for evaluation and authorization of agricultural biotechnology products; improvements to sanitary and phytosanitary measures; and intellectual property protection for agriculture, among others. The American Soybean Association (ASA) has actively advocated for many of the improvements itemized in White House summary documents of the deal.
“We are very pleased to see true progress on the regulatory process for ag biotech products, sanitary and phytosanitary measures, and other big points of concern. And, importantly, this milestone moment in the negotiation process bodes well for de-escalation of the tension between our two countries and making further progress,” Gordon commented, “Yet, as an industry, we have a lingering unease regarding the tariff on U.S. beans, which was not addressed in this deal. China needs to take action, and, as a goodwill gesture, offer to remove its retaliatory tax on our soybeans.”
According to documents released by the White House outlining details of the deal, China’s imports of U.S. agricultural products, “such as soybeans, cotton, grains, meats, ethanol, seafood, and the full range of other agricultural products,” will total at least $80 billion over the next two years.
Joint Statement – Phase One Trade Deal Should Restore China’s Demand for U.S. Wheat
The National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) are very encouraged by the signing of a Phase One trade agreement with China. Chinese imports of U.S. soft white (SW), hard red spring (HRS) and hard red winter (HRW) wheat classes were trending up before abruptly ending when China implemented retaliatory tariffs on U.S. wheat and other agricultural commodities in March 2018.
“Even though China has huge domestic wheat stocks, they were buying more U.S. wheat because they needed it to meet growing demand for higher quality wheat foods,” said Vince Peterson, President of U.S. Wheat Associates (USW), the organization funded by farmers and the U.S. government to promote wheat exports. “The losses we demonstrated soon after China stopped importing U.S. wheat have only grown since then, so we hope the agreement signed today signals a potential turn-around.”
Adding to the optimism is China’s separate agreement to work toward filling its 9.6 million metric ton (MMT) reduced tariff rate quota (TRQ) for wheat imports. If the changes are in fact implemented, and Chinese millers can respond to market signals, most of the TRQ should be used. For U.S. wheat farmers, the Phase One deal and TRQ compliance would create a very welcome opportunity for Chinese miller customers to once again apply the technical expertise and assistance USW provides to use wheat with specialized end-use applications that distinguishes U.S. wheat from domestic Chinese supplies.
“Wheat farmers have experienced the harm of unfair trading practices at the hands of China for far too long, as reinforced by the recent WTO wins. This step forward in negotiations between the U.S and China is a tremendous way to begin the new year,” stated NAWG CEO Chandler Goule. “As part of its Winter Conference this week, NAWG and its states will hold several meetings on The Hill where it will be stressed to Members and staff the need to continue expanding our international markets, including to swiftly move forward with Phase One of U.S.-China trade deal.”
Re-opening China would be a huge lift for wheat farmers who are still producing a quality product in spite of the income challenges they have faced for several years. USW and NAWG want to thank the negotiators in the Office of the U.S. Trade Representative for their dedicated effort to create this opportunity and we look forward to learning more details about the agreement.
“Our organization and the farmers we represent agree with the Trump Administration that China has not been transparent about its protectionist policies,” Peterson said. “Now it remains to be seen if China will comply fully with its WTO commitments and this new agreement so that trade between our two countries can flourish.”
USW and NAWG are especially pleased that the agreement contains structural changes to how U.S. exporters access the Chinese market. U.S. negotiators should be commended for seeing the opportunity to build on our wins at the WTO against China’s TRQ administration and agricultural subsidy policies by including provisions on administration and transparency of policies.
The additional commitments included in the agreement contain important transparency measures, such as reporting on TRQ awards and operation of subsidy programs in addition to reaffirming commitments on eligibility for access to TRQ.
U.S. Grains Council Statement On Signing Of U.S.-China Phase One Agreement
A statement from U.S. Grains Council Chairman Darren Armstrong, a farmer from North Carolina, following the signing of U.S.-China Phase One agreement today at the White House:
“The U.S. Grains Council is pleased to see the signing today of a Phase One deal with China, which should reduce continued market uncertainty and incentivize China to purchase significant amounts of the full range of U.S. agricultural products, including grains, distiller’s dried grains with solubles (DDGS) and ethanol, to total at least $80 billion over the next two years.
“The structural reforms, particularly those affecting feed grains, agricultural biotechnology, and sanitary and phytosanitary measures – once fully committed and implemented – will hopefully offer lasting impacts beyond short-term commitments to make accelerated, market-driven purchases. The agreement, as we understand it, will offer opportunities for U.S. farmers to once again become competitive in China and serve our customers by addressing retaliatory tariffs and long-standing, non-tariff barriers to trade.
“Our organization and our members believe in the long-term value of international trade, and we have spent more than 35 years working with partners in China to develop its feed and livestock industry. Our sector is committed to remaining a reliable supplier of grain products and ethanol for customers in the feed, food and energy industries in China as our countries’ relationships evolve.”
Animal Food Industry Applauds Phase One Trade Agreement with China
The American Feed Industry Association (AFIA) commends and congratulates the administration on the signing of a historic phase one trade agreement with China. The U.S. animal food manufacturing industry faces a number of challenges in this market, including those which have restricted any new U.S. feed additive and premix products to be exported to China since 2011 and those which restrict U.S. feed products with ruminant-origin ingredients and a number of poultry-derived ingredients. This agreement directly addresses these constraints by streamlining and facilitating a facility registration process for feed additives, premixes and compound feed, as well as lifting the poultry and ruminant ban for animal food products. AFIA looks forward to working with industry and the appropriate U.S. government agencies to facilitate implementation.
AFIA’s president and CEO Constance Cullman stated the following:
“Addressing the non-tariff barriers that challenge our industry in the Chinese market has been a top priority for AFIA for nearly a decade. I am very excited about what this agreement means for the U.S. animal food industry and reopening the Chinese market for our products. I’m grateful for the hard work and enduring efforts of our trade negotiators on our behalf and the administration as a whole for defending the enhancement of productive trading relationships and supporting U.S. businesses and exports.”
AFIA’s Chairman Tim Belstra stated the following:
“Representing AFIA and its members today at this historic signing was a stark reminder of the importance of trade and opening markets for our industry. I am elated by what this agreement represents for our industry and the many exports it will facilitate as a result. This is indeed a landmark opportunity not only for the U.S. animal food industry, but also for the livestock and poultry industries in China to further expand their feed ingredient inputs and technology.”
For more articles concerning trade issues, click here.