Field Notes from Koch Agronomic Services

Agriculture Celebrates China Phase One Signing

Cindy Zimmerman

Agricultural organizations are very positive overall about the signing of the historic Phase One Trade Agreement with China Wednesday, an agreement which calls for China to purchase between $40 and $50 billion in American agricultural goods each year for two years.

“Together we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers, and families,” said President Donald Trump as he prepared to sign the agreement with Chinese Vice Premier Liu He. “The 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.”

Listen to soundbites from President Trump and Vice President Pence related to agriculture:
China trade agreement signing soundbites

Agriculture Secretary Sonny Perdue attended the signing ceremony. “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.”

USDA released an eight-page summary of the agreement on agriculture.

USDA Secretary Perdue statement on China signing

Agricultural organizations mostly praised the agreement and many had representatives in attendance at the signing.

Agricultural Retailers Association (ARA) President and CEO Daren Coppock – “This agreement will boost U.S. goods and services exports to China by a reported $200 billion over the next two years. The changes made to China’s trade policies surrounding agriculture, intellectual property, and dispute resolutions, among other aspects, will be a huge boost to the American trade economy.”

American Farm Bureau Federation President Zippy Duvall, who will be greeting President Trump at their annual meeting for the third time later this week, says this is a great way to start the new year. “China was once the largest market for U.S. agricultural products but has dropped to fifth largest since retaliatory tariffs were introduced. This agreement will help turn around two years of declining agricultural exports.”

American Seed Trade Association (ASTA) First Vice Chair John Latham of Latham Hi-Tech Seeds represented the U.S. seed industry at the signing ceremony. “The deal is an important step in increasing U.S. ag exports and providing needed reforms to the Chinese biotech approval process, which is critical to bringing new seed varieties to market for U.S. farmers. Additionally, ASTA supports the deal’s focus on ensuring America’s seed companies have IP protection in the Chinese marketplace.”

ASTA is hopeful that discussions will continue in the near future toward a phase 2 deal to end tariffs on seed imports from China. The current 25% tariff on American seed that is multiplied in China and returned to the U.S. for seed companies to sell to America’s farmers is having a severe impact on the seed industry. ASTA and its member companies look forward to continuing to work with the Administration as it moves forward in these discussions.

National Cattlemen’s Beef Association President Jennifer Houston – “The Phase-One Agreement with China will be a game changer for the U.S. beef industry.”

National Pork Producers Council (NPPC) President David Herring – “While China’s phase one commitments are welcomed, U.S. pork exports continue to be suppressed because of the country’s 60 percent punitive tariffs. In order to fully capture the benefits of this deal, we need China to eliminate all tariffs on U.S. pork for at least five years.”

American Soybean Association president Bill Gordon – “We are very pleased to see true progress on the regulatory process for ag biotech products, sanitary and phytosanitary measures, and other big points of concern. Yet, as an industry, we have a lingering unease regarding the tariff on U.S. beans, which was not addressed in this deal. China needs to take action, and, as a goodwill gesture, offer to remove its retaliatory tax on our soybeans.”

National Corn Growers Association President Kevin Ross – “China holds tremendous opportunity for American corn, ethanol and DDGs and NCGA looks forward to learning further details of what phase one will mean for these products. As more specifics become available, we will closely monitor implementation to ensure that the commitments are upheld and that U.S. corn farmers resume trading with Chinese customers. NCGA urges the Administration to quickly commence phase two negotiations and work to resolve retaliatory tariffs.”

Renewable Fuels Association President and CEO Geoff Cooper – “We are very optimistic about the potential of this agreement for American agriculture and the renewable fuels industry—with the inclusion of ethanol and key co-products like distillers grains—and are looking forward to more specific details on the agreement. America’s ethanol producers have experienced significant economic losses due to punitive Chinese tariffs on our products, and we are eager to return to a more open trading relationship with China.”

American Coalition for Ethanol (ACE) CEO Brian Jennings – “Phase one represents a positive step in the right direction, especially once we have evidence that China has made actual purchases of U.S. ethanol and distillers grains, but given ongoing export and domestic market constraints, there is much more work to do.”.

National Cotton Council Chairman Mike Tate – “While we welcome Phase I and are hopeful about the potential for future increased sales to China, U.S. cotton producers continue to face a challenging economic climate. As such, we encourage President Trump and USDA to follow through with the third tranche of MFP payments as quickly as possible.”

AFBF, Ag Groups, ARA, Audio, Corn, Ethanol, Exports, Livestock, Trade