Ag Policy Blog

Republicans Extoll China Agreement While Democrats Are Cautious

Jerry Hagstrom
By  Jerry Hagstrom , DTN Political Correspondent
Republicans praised President Donald Trump for Wednesday's signing of a trade deal with China that could boost agricultural exports to the country. Democrats highlighted some of the economic harm that has come from Trump's trade disputes. (DTN file image)

After Wednesday's signing of the China trade agreement, House Agriculture Committee ranking member Michael Conaway, R-Texas, said few people in three years ago believed President Donald Trump could successfully renegotiate NAFTA or get a trade deal with China.

"Even fewer believed that any changes made would eliminate the unfair trading practices of our trading partners in North America or the predatory trading practices of China that have long injured the United States," Conaway said. “Those critics have no ground to stand on today. The president has negotiated the United States-Mexico-Canada Agreement to preserve and expand access for America’s farmers and ranchers to vital Canadian and Mexican markets, and has now signed phase one of a U.S.-China agreement that begins a longer process of finally holding China accountable to its trade commitments and to principles of truly free and fair trade.”

Under the trade deal, agricultural exports to China are expected to reach at least $40 billion over each of the next two years. That compares to 2017 numbers, when exports to China reached $23.8 billion, making it the largest U.S. export market. Soybean exports that year accounted for roughly $14 billion of that total.

House Agriculture Committee Chairman Collin Peterson, D-Minn., he was cautiously optimistic about the deal.

“My district produces everything from dairy, meat and poultry, to feed and pet food, to alfalfa and ethanol," Peterson said. "This agreement appears to include positive structural changes and commitments that could increase access to the Chinese market for those and other products produced in districts across the country."

Peterson said he appreciates the negotiators and staff at USTR and USDA who have worked to get a deal to this point. "The question now is whether China will play by the rules it has agreed to here. I’m also concerned that, long-term, certain crops may not regain the foothold they lost in the trade war. If those purchases don’t materialize, I worry what effects that will have on the markets for crops like soybeans and sorghum.”

House Agriculture Livestock and Foreign Agriculture Subcommittee Chairman Jim Costa, D-Calif., said the American people so far "have picked up the tab for the president’s trade war, which has strained hard-working American families and farmers." Costa said he was happy there was some progress but he will closely monitor the agreement and its impacts. "It’s not immediately clear that these new purchases will make up for what we’ve lost along the way. The key is getting the Chinese to stick to their commitments and prove that they will honor international agreements with western democracies that live by rules-based economies.”

Agriculture Secretary Sonny Perdue said the agreement “is a bonanza for American agriculture. 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 one 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. 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.”

Former Vice President Joe Biden, who is running for the Democratic nomination for president, took a sharp jab at the trade pact, saying “China is the big winner of Trump’s ‘phase one’ trade deal with Beijing. True to form, Trump is getting precious little in return for the significant pain and uncertainty he has imposed on our economy, farmers, and workers. The deal won’t actually resolve the real issues at the heart of the dispute, including industrial subsidies, support for state-owned enterprises, cybertheft, and other predatory practices in trade and technology.

Biden said the initial reports show China's commitments on forced technology transfer, currency manipulation, and intellectual property protection, "are almost all vague, weak, or covered by previous announcements and existing agreements. It’s no wonder Trump doesn’t want the American people to see the text of the deal until after it’s signed.

“The most notable result is likely to be increased access to China’s financial markets — something Beijing wants to do anyway. This achieves nothing for the U.S. middle class, but it’s great for Donald Trump’s Wall Street friends.

Senate Agriculture Committee Chairman Pat Roberts, R-Kan., who was at the White House, said, “It’s a good day for American businesses, especially farmers and ranchers. This agreement is a big step toward a stronger, more reliable trading relationship between the U.S. and China. I’m glad to see this administration holding China accountable. And, I look forward to seeing this framework established and launching the next phase of this important agreement.”

House Ways and Means Committee ranking member Kevin Brady, R-Texas, said, “This is a historic day for American workers and businesses. President Trump, Trade Ambassador Lighthizer, and Secretary Mnuchin are achieving what no White House has before them: a strong, real and enforceable commitment from China to end unfair trade practices and level the playing field for American workers, manufacturers, farmers, and businesses.

“This agreement includes many of America’s top priorities: protecting America’s intellectual property, ending China’s practice of forcing U.S. companies to transfer technology simply to do business in their country, and tearing down structural barriers that are preventing American farmers and businesses from competing fairly in China,” Brady said. “It also tackles currency manipulation, opens the financial services markets, and dramatically expands American agriculture sales to China.”

House Ways and Means Committee Chairman Richard Neal, D-Mass., said, “For two years, I have encouraged the administration to aim high in negotiations with China, urging them not to give in to the temptation to settle for superficial wins. I have reinforced the importance of holding for China to commit to structural changes that will make a real difference to American workers and companies seeking to compete and trade with those in China. Despite today’s elaborate ceremony, the jury is still out on how ‘historic’ this deal is. In calling it a ‘phase one’ deal, the administration admits that there are other important commitments they have not yet been able to secure, especially disciplines on China’s use of unfair subsidies.”

Senate Agriculture Appropriations Subcommittee Chairman John Hoeven, R-N.D., said, “This agreement is very important for our farmers and ranchers, as China has agreed to purchase $40 billion-$50 billion in agriculture products as well as reduce barriers. Under the agreement, China committed to increase purchases of U.S. agriculture goods to $40 billion-50 billion in 2020 and 2021, including crops like soybeans and wheat, but also beef, pork and dairy. The agriculture purchases are part of an overall commitment by China to increase purchases of all U.S. goods over a 2017 baseline by $200 billion over the next two years.”

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, who attended the ceremony, said, “President Trump and Ambassador Lighthizer should be commended for this significant progress toward a full and enforceable deal with China. Farmers have borne the brunt of retaliation throughout this trade war. At the White House today, I was thinking of my neighbors in Iowa and all the other farmers across the country who have stood strong throughout this process. I hope this proves to be a turning point in our economic relationship with China, but I’ve seen enough history to be clear-eyed. Not only must China follow through with its commitments in this phase one deal, but also work toward a comprehensive agreement that ends forced technology transfers, intellectual property theft and unfair restrictions on U.S. goods, including agriculture. Only then will we know if China can be a reliable economic partner in the 21st century.”

Senate Finance Committee ranking member Ron Wyden, D-Ore., said, “Addressing China’s lengthy track record of predatory commercial practices — including intellectual property theft, forced technology transfer and economic espionage — is critical for American workers. The stakes could not be higher for the future of the U.S. economy. While I want this deal to resolve our fundamental concerns with China, I fear that its limited scope, the lack of transparency in its development and the weak enforcement mechanism mean it will amount to little more than words on paper.”

DTN Ag Policy Editor Chris Clayton contributed to this report.

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow him on Twitter @hagstromreport

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