China and US reach agreement on beef, poultry, natural gas

Andrew Cummings
May 14, 2017

"After being locked out of the world's largest market for 13 years, we strongly welcome the announcement that an agreement has been made to restore USA beef exports to China".

In a statement sent to our sister station KTTC, the Executive Director of the Minnesota State Cattlemen's Association says the group has been looking forward to this moment for years.

"Restoring U.S. beef exports to China opens the door to sell high quality, safe and delicious Kansas beef to almost 1.4 billion new customers in China", Brownback said. "As long as they can comply with the normal rules, they will get access".

Commerce Secretary Wilbur Ross hailed the agreement, coming on the heels of President Donald Trump's April meeting with President Xi Jinping, as "a herculean accomplishment".

Spurred by beef's rising popularity, particularly in urban areas, China's 1.37 billion residents are projected to eat roughly 17.6 billion pounds (8 billion kilograms) of the meat this year, according to the U.S. Department of Agriculture's Foreign Agricultural Service.

China will open its market to U.S. credit rating agencies and credit card companies as well as resume imports of U.S. beef, part of a package hailed by the Trump administration as the first step in redefining the trade relationship between the world's two largest economies. How can Commerce Secretary Wilbur Ross say 'we do not intend to endanger anybody's health or safety in the U.S.' when he is allowing potentially unsafe chicken into the country? However, Chinese chicken could raise USA food-safety concerns. Its import market is now dominated by Brazil, Uruguay, Australia and other nations with meat that's generally cheaper than North American beef, according to the Foreign Agricultural Service.

Eliminating trade imbalances was one of Trump's premier promises on the 2016 campaign trail.

But while the agreement touches on numerous trade barriers American companies have long complained about, it remains to be seen how far China will go to allow more American exports.

For U.S. beef producers, July 16 may replace July 4 as the day to shoot off fireworks.

An agreement is now in place to import beef from Minnesota and beyond.

China imports about $2.5 billion in beef from other countries.

In return, the US and China are to resolve outstanding issues for the import of China-origin cooked poultry to the soon as possible after reaching consensus.

"These are modest moves which by themselves will not have much effect on the USA economy", said David Dollar, a senior fellow at the Brookings Institution and former Treasury Department official.

Elements of the agreement had been promised or agreed upon during the Obama presidency.

The total amount of U.S. LNG that has so far been shipped to China is just over 0.6 million tonnes, or 1.4 billion cubic meters. At the moment, the two countries are trying to work on the details of the agreement, including labeling of products.

Ross, a billionaire who made his fortune investing in distressed assets, said the dialogue with China is an ongoing process, and these developments should help reduce the US trade deficit with China.

Asked the same question in Beijing, Mr Zhu said: "Our economic teams from both sides have a clear understanding that economic issues can not be politicised".

"So this is clearly a concession on China's part", he said, adding: "It's still too early to tell how Sino-US relations will pan out".

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