China Ready for US Beef?

Report: China Agrees to Open Market to US Beef After Presidential Talks

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A report from the Financial Times over the weekend stated China agreed to open up its markets to U.S. beef as a concession to President Donald Trump who wants to see the U.S. trade deficit with China decline. (DTN file photo)

WASHINGTON (DTN) -- White House officials came out of a weekend meeting in Florida without offering any specific details on trade negotiations with China, but the Financial Times reported that China would offer better access to U.S. beef products, a long, lingering issue with the beef industry.

The Financial Times quoted officials who said China is willing to end the ban on U.S. beef that goes back to the finding of bovine spongiform encephalopathy in the U.S. in 2003.

China said last September that it would lift the ban on U.S. beef, but the country had yet to take any steps to follow up on that agreement. Chinese officials said on Sept. 22 they would open the market to U.S. beef after completing an extensive review of the U.S. supply chain, but the market has yet to open.

China was not a major buyer of U.S. beef before 2003, buying roughly $10 million a year, but the country was only buying roughly $15 million in beef overall. The country's middle and upper classes have expanded greatly over that time, and China is now a top market for U.S. ag products overall.

The Financial Times reported China also would offer better market access for U.S. foreign investment in financial sectors. Foreign investment is a complicated issue in China, and the Obama administration spent several years working on a bilateral investment treaty between the two countries. The Financial Times indicated China would be willing to complete that treaty.

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Reopening markets to U.S. beef and closing the deal on bilateral investment were pitched as ways to help ease tensions over the $347 billion trade deficit the U.S. now carries with China. The Trump administration has already opened up trade studies and other efforts to highlight why the U.S. carries large trade deficits with several countries. More than 40% of the country's overall trade deficit is because of China.

Despite the reporting in the Financial Times, U.S. officials did not highlight the issue with U.S. beef or offer any specific Chinese concessions in a briefing held by Secretary of State Rex Tillerson late Friday. Tillerson did say agriculture was one of the topics on the table when President Donald Trump met with Chinese President Xi Jinping.

"President Trump noted the challenges caused by Chinese government intervention in its economy and raised serious concerns about the impact of China's industrial, agricultural, technology, and cyber policies on U.S. jobs and exports," Tillerson said. "The president underscored the need for China to take concrete steps to level the playing field for American workers, stressing repeatedly the need for reciprocal market access."

A spokeswoman from the National Cattlemen's Beef Association said the group had not heard any specific agreement reached between the two countries over beef. Nonetheless, Craig Uden, president of NCBA, had a statement noting that reopening the China market is a top priority for the group and cattlemen. Uden pointed out China said last September that it would lift the ban on U.S. beef but had not followed up on that agreement.

"We are excited to see media reports that the restoration of U.S. beef access to China is an action item from the summit, but we know that China has been tough on U.S. beef for many years and that will be difficult to change overnight," Uden said. "The U.S. beef industry embraces science in our production methods and our safety standards, which drives us toward making some of the safest and most appetizing beef in the world. We strongly support President Trump's efforts to remove non-science-based restrictions on U.S. beef, and we look forward to working with him to get American-produced beef back in front of China's nearly 1.4 billion consumers."

Bill Bullard, CEO of the Ranchers-Cattlemen's Action Legal Fund, said R-CALF welcomes the news that China would take steps to open its markets, but R-CALF also wants the incoming secretary of Agriculture to ensure that there would not be any changes in policy regarding foot-and-mouth disease that would risk exposing the U.S. cattle herd. China has significant problems with the disease, Bullard noted. Bullard also wants to make sure beef exported to China is actually sourced from U.S. cattle producers and not product imported to the U.S. by meatpackers, then shipped overseas.

"We further call on the administration to close the loophole that allows multinational meatpackers to circumvent the U.S. live cattle supply chain by sourcing live cattle from Canada and Mexico and exporting the resulting beef as if it was a product of the United States," Bullard said. "If the rule of origin that allows this deception is not changed, then multination meatpackers can capture the benefits of any new market without sharing those benefits with U.S. cattle producers. This is because the faulty rule of origin allows meatpackers to bypass the U.S. live cattle supply chain."

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

Follow him on Twitter @ChrisClaytonDTN

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Chris Clayton