Washington Insider -- Thursday

US-China Ties Tanking

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Farm Bureau Expresses Concern About Halt In Processing H-2A Visas In Mexico

A recent decision by the U.S. State Department to stop processing many H-2A visa applications in Mexico as U.S. embassies and consulates are being temporarily closed will make it much harder for American farmers to keep the country supplied with food if they do not have enough labor, according the American Farm Bureau Federation (AFBF) President Zippy Duvall.

“American farmers will not have access to the skilled immigrant labor needed at this critical time of planting season and harvesting our spring crops,” Duvall said. “We are urging the administration to find a safe and practical way to admit farm laborers as emergency workers for visas, while still protecting the public health. Failing to do so will impact our ability to provide a healthy, affordable food supply.”

The group is also monitoring the situation relative to U.S. food supplies, trying to ensure “U.S. agriculture and others in the food supply chain are able to continue feeding America, just like we do 365 days a year.” Even as some shortages are appearing in grocery stores, Duvall said the group wants to assure consumers “farmers and ranchers nationwide are continuing to produce the food we all rely on.”

Administration Notifies Congress of Intent to Trade Negotiations With Kenya

The Trump administration Tuesday provided formal notification to Congress that it would start trade talks with Kenya in 90 days. “Under President [Donald] Trump’s leadership, we look forward to negotiating and concluding a comprehensive, high-standard agreement with Kenya that can serve as a model for additional trade agreements across Africa,” U.S. Trade Representative Robert Lighthizer said in a statement.

He said the administration will work with Congress on negotiating principles for the deal.

USTR said it would publish the negotiating objectives for the talks at least 30 days before they begin.

Washington Insider: US-China Ties Tanking

Bloomberg is reporting this week what it calls an additional threat amid what “could’ve been a moment for the U.S. and China to tackle a shared challenge.” Instead, the trend is accelerating a long-anticipated separation, the report says.

China struck the latest blow this week with the “unprecedented” expulsion of more than a dozen American journalists covering Beijing for the New York Times, the Wall Street Journal and the Washington Post. The provocation comes as part of a tit-for-tat exchange in which the governments of both President Trump and China’s Xi Jinping seek to deflect blame for how they’ve handled the outbreak.

In Beijing, as in Washington, the virus crisis has boosted hardliners over those who favor preserving relations with a key trading partner and military rival. One Chinese official said this difficult period that could last a long time and could become “a new Cold War.”

Before moving to oust the American correspondents, a Chinese foreign ministry spokesman repeated a conspiracy theory that U.S. Army athletes introduced the disease and is blaming China for the outbreak ravaging the world economy. President Trump has characterized it repeatedly as a “Chinese virus” as he looks to rally his base against a foreign adversary ahead of the fall elections.

While it’s unclear how far leaders will allow the dispute to escalate, demands for “reciprocity” on visas extend far beyond media access. At the height of trade tensions last year, Chinese students and visiting academics found their ability to work and study in the U.S. under threat.

Chinese Foreign Ministry spokesman Geng Shuang said Wednesday that the country would be “compelled to take further countermeasures” if the U.S. continued down the “wrong path.”

The feud is escalating just as the international community looks for leadership to contain a virus that has infected almost 200,000 people and may have already pushed the globe into recession. In the absence of a clear strategy, nations are going it alone and potentially undercutting each other’s efforts in the process.

“The government of Xi Jinping has crossed a Rubicon that puts the U.S. and China on opposite banks in an increasingly antagonistic and irreconcilable state of play,” said Orville Schell, director of the Asia Society’s Center on U.S.-China Relations and a former dean of the Berkley Graduate School of Journalism. “This kind of self-destructive retaliatory action makes it increasingly unlikely the two nations will soon find ways to work together on other critical issues of common interest like the present pandemic, much less future trade and climate change.”

As first, it looked like Trump and Xi might be able to build on good will from the “phase one” trade deal signed in January to work together against the outbreak, with the U.S. president praising his counterpart’s hard-line approach. But the two quickly began bickering over whether Xi’s government was being transparent enough and the U.S. resumed efforts to curb activities by China’s state media outlets in the U.S.

In the meantime, China used the opportunity to weaken one of the few sources of critical coverage in its highly censored media landscape: foreign correspondents. Last month, it expelled three Wall Street Journal reporters. The administration hit back by ousting about 40% of staff at four Chinese media outlets.

The disputes have reaffirmed concerns that the trade pact was merely a pause in hostilities rather than the foundation for a truce. The outbreak has bolstered nationalistic arguments on both sides of the Pacific for a more confrontational approach.

President Trump and other U.S. officials upped the ante by adopting “Chinese virus,” which health experts warn risks stigmatizing an entire ethnic group.

“China is only taking countermeasures,” said He Weiwen, a former official at the Chinese consulate in San Francisco. “Since the Covid-19 outbreak in China in January, Washington has been very unfriendly, even hostile to China. The journalists’ expulsion was only one of the latest moves, which of course deteriorated the trade environment.”

Still, China’s mass expulsion of American journalists will have far-reaching consequences for the world’s ability to understand what’s going on there. While the newspapers will retain non-American staff and U.S.-based news wires remain, some of the reporters ousted produced groundbreaking stories about China’s mass detention of ethnic Uighur minority and other sensitive topics.

The country’s leadership also receives daily summaries of international news outlets, including the New York Times, the Washington Post and the Wall Street Journal, according to two Chinese officials familiar with the arrangements.

Richard McGregor, a former Financial Times bureau chief in Beijing who’s now a senior fellow at the Lowy Institute, said China’s leaders “must feel bulletproof” as their own outbreak appears to subside and the U.S. struggles with surging coronavirus cases.

“China is now doing things that the hardliners have always wanted to do, but would either have been restrained by other parts of the system or wouldn’t have felt strong enough to get away with,” he said. “It is a moment to move on all fronts and we see them doing that.”

So, we will see. Both sides seem to be pushing hardening positions just now based on beliefs in their potential political benefits. This appears to be a fight U.S. producers should watch closely as it has the potential to rebuild trade tensions that seemed to be declining, Washington Insider believes.

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