What’s next in the US-China trade deal?

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Posted by Jennifer Whitlock

Field editor

After an eight-month review, US Trade Representative (USTR) Katherine Tai has started talks with China on the bilateral trade agreement between the two nations.

Virtual meetings between Tai and China’s Vice Prime Minister Liu He began in early October after she gave a speech detailing US concerns and expectations about the deal.

Speaking to the Center for Strategic and International Studies (CSIS), Tai said that the interaction and relationship between the world’s two largest economies affects not just the US and China, but billions of people in other nations.

“I have said this before and will continue to say it: The trade and economic relationship between the US and China is profound. This bilateral relationship is complex and competitive, ”she said. “For too long, China’s failure to adhere to global trade standards has undermined the prosperity of Americans and others around the world. It is becoming increasingly clear that China’s plans do not include meaningful reforms to address concerns shared by the US and many other countries. “

The US agricultural sector was mentioned again and again. Tai said China’s agricultural purchases are an area where the US has made progress under the phase one trade deal and that US agricultural exports have been stabilized by the temporary deal.

However, she noted that China’s introduction of regulations restricting or threatening market access for American farmers and ranchers has left US agriculture in an unequal field.

“Although we’ve seen more exports to China in recent years, market share is shrinking and agriculture remains an unpredictable sector for US farmers and ranchers who have come to rely heavily on this market,” she said.

As the first phase trade deal expires on December 31st, US agricultural organizations are closely monitoring the USTR’s movements on the issue.

In late August, Zippy Duvall, president of the American Farm Bureau Federation (AFBF), sent Tai and US Secretary of Agriculture Tom Vilsack a letter asking administrators to consider the impact of trade operations on US farmers and ranchers.

“Farm Bureau urges you to resolve trade problems with China within the boundaries of the US-China Phase 1 Agreement and to work on expanding purchase commitments,” Duvall wrote.

Last year, China committed to buying $ 34 billion worth of U.S. goods and services, but the total was closer to $ 27.2 billion. Despite lagging behind on production and energy purchase commitments, China has come much closer to reaching agreements on agricultural purchases. From January to August 2021, the US exported nearly $ 18 billion in agricultural products, according to an analysis by AFBF economist Veronica Neigh.

“We believe the cumulative exports to China at this point in time must be around $ 20 billion from January to August,” Neigh said during an AFBF Newsline Podcast episode in late September. “That means they are only 12% below what they need to be to hit the 2021 total.”

China’s state news agency Xinhau reported after the first conversation that Liu called on the US to abolish tariffs and sanctions and clarified China’s position on its “economic development model and industrial policy”.

Xinhua did not mention any specific trade issues or any single industrial sector in the statement.

After the first meeting, USTR also published a brief statement in which it said that the two sides would consult on “certain open questions”.


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