Ag: Stick With China Deal

Agribusinesses, Groups Ask President Trump to Keep Pressing China to Meet Commitments

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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The Chinese flag waves on a cargo container ship at the Long Beach Port in California. Agricultural groups on Tuesday wrote President Donald Trump a letter asking him to maintain the phase-one trade deal with China and ensure China meets its obligations to buy more agricultural products from the U.S. (DTN file photo by Chris Clayton)

OMAHA (DTN) -- Agricultural groups on Tuesday wrote President Donald Trump calling on him to stick with the phase-one trade deal with China and encouraging the president to keep pressing China to meet its commitments under the deal.

More than 190 agribusinesses and agricultural groups on Tuesday joined together to write the president to continue implementing the phase-one trade deal with China. The letter lays out what agricultural businesses and trade lobbies see as the long-term importance of China to selling U.S. agricultural products abroad. The letter states U.S. agriculture must have access to the world's second-largest economy and growing middle class.

"With China's domestic production constraints and increased demand from its consumers for high-quality and safe food and agricultural products, the resulting import demand continues to offer significant opportunities for U.S. agricultural exporters," the letter stated.

The letter from the agricultural trade associations encouraged the president to stick by the phase-one trade deal as Trump in recent weeks has become lukewarm to the trade agreement signed in January. Two weeks ago, the president also announced more punitive measures against the Chinese government and businesses. Administration officials such as trade adviser Peter Navarro also continue to criticize China for the coronavirus and its impact on the U.S. economy.

In their letter, the agricultural groups heap praise on President Trump for "vigorously advocating on behalf of U.S. farmers, ranchers, food-industry workers, and the entire U.S. food and agriculture manufacturing and marketing sector." The farm groups stated the phase-one trade agreement "represents historic outcomes that address many of the technical barriers that impede American agriculture's fullest suite of opportunities in China -- and commits China to significant purchases of American agricultural products."

Some commodities have seen exports to China grow even during the pandemic. The U.S. Meat Export Federation last week reported April pork sales to China and Hong Kong hit a record at 116,928 metric tons, triple the volume from a year ago, and reaching $268.5 million in sales for April. For the first quarter of the year, pork sales were $993 million to China. Beef sales to China remain small in comparison, but beef shipments also were up the first quarter of the year, reaching 3,179 metric tons, valued $25.4 million, up 41% in value from last year.

Still, China right now has not kept pace with the commitment to buy $36.6 billion in agricultural products for 2020. According to USDA data, the U.S. exported $4.65 billion in agricultural products from January to April, up roughly $344 million from a year ago, but nowhere close to keeping pace with the commitments in the phase-one deal. A "general concern over the data that shows China is behind in its commitments," was the main driver behind the letter to the president, according to Sarah Little, a spokeswoman for the North American Meat Institute.

China's soybean purchases are up from a year ago, but not close to matching sales before the trade war hit. Soybean exports and outstanding sales to China right now are reported at 15.28 million metric tons (mmt), (561.5 million bushels) compared to 13.63 mmt (501 mb) a year ago. Over the past three weeks, Chinese buyers have bought 27 mb of soybeans.

The letter comes as U.S. Trade Representative Robert Lighthizer is set to testify Wednesday before both the Senate Finance Committee and the House Ways and Means Committee in hearings on the president's trade agenda.

A full copy of the letter can be viewed at: https://www.meatinstitute.org/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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Chris Clayton