USA – The United States and Republic of China have reached a consensus on the first phase of the trade agreement in a deal that is expected to significantly benefit the American Agricultural sector.
The first phase of the trade deal was signed by US President, Donald Trump and Liu He, Vice Premier of the Republic of China on Wednesday, marking positive progress between the world’s leading economies towards restoring positive and mutually beneficial trade relationships.
China has pledged to purchase US$200 billion more of US goods and services, including agricultural, energy and manufacturing goods.
As part of the multi-billion dollar agreement, China will in the next two years purchase between US$40 billion and US$50 billion worth of U.S. agricultural goods each year.
The agriculture section of the trade agreement addresses structural barriers to trade and will expand the market for food and agricultural products as well as promote the growth of trade in sector between the two countries.
The deal covers food, feed, dairy and infant formula, poultry, beef, pork, cereals and cereal products, seafood products and agricultural biotechnology.
“This agreement tears down major market barriers for U.S. food and agricultural exports. China will now welcome American beef and pork, poultry, seafood, rice, dairy, infant formula, animal feed, biotechnology and much, much more,” President Trump said.
Vice Premier He added: “This is a mutually beneficial and win-win agreement that will bring about stable economic growth, promote world peace and prosperity and is in the interest of the producers, consumers and investors in both countries.”
The countries also intend to continue implementing and improving the China-United States Scientific Cooperation and Exchange Program to promote further exchanges on agriculture-related issues between US and Chinese scientific and technical experts.
China and the US announced that they also intend to increase cooperation in international organizations, such as the WTO, Asia-Pacific Economic Cooperation, the United Nations Food and Agriculture Organization(FAO) and the Codex Alimentarius Commission(Codex).
Commenting on the deal, Michael Dykes, D.V.M., President & CEO of the International Dairy Foods Association (IDFA) said; “The dairy industry welcomes news of this deal and looks forward to beginning negotiations on phase two that must remove all existing tariffs and non-tariff barriers and create a level playing field for U.S. dairy products.
“IDFA is hopeful that this deal—alongside the recently implemented phase one Japan deal as well as the U.S.-Mexico-Canada agreement—signals the United States has embraced a market- and rules-based system of international trade that is essential for the future of the U.S. dairy industry.
“U.S. dairy relies on trade agreements to open new markets and increase exports, thereby supporting American jobs and wages.
In a statement from U.S. Grains Council following the signing of the agreement, Chairman Darren Armstrong said:
“The U.S. Grains Council is pleased to see the signing of a Phase One deal with China, which should reduce continued market uncertainty and incentivize China to purchase significant amounts of the full range of U.S. agricultural products, including grains, distiller’s dried grains with solubles (DDGS) and ethanol, to total at least US$80 billion over the next two years.
“The structural reforms, particularly those affecting feed grains, agricultural biotechnology, and sanitary and phytosanitary measures – once fully committed and implemented – will hopefully offer lasting impacts beyond short-term commitments to make accelerated, market-driven purchases.
“The agreement, as we understand it, will offer opportunities for U.S. farmers to once again become competitive in China and serve our customers by addressing retaliatory tariffs and long-standing, non-tariff barriers to trade.
The agreement will take effect by around mid-February while further trade agreement(s) are expected to come along in the future.