China Must Meet Phase One Obligations, Ag Groups Urge President

In Xi’s words and actions, China thinks it can win and believes history is on its side. “China wants to replace us as the No. 1 power in the world,” says Mark Stys, a geoeconomics analyst and president of WS Wealth Management. ( Photo Illustration: Lindsey Benne )

The U.S. net farm cash income in 2020 is projected to decline 9% or $11 billion from the prior year. In inflation adjusted dollars, U.S. net farm cash income is down nearly 30% from the recent high in 2012, said the North American Meat Institute (Meat Institute).

On Tuesday, nearly 200 groups representing all parts of the food value chain and rural economies sent a letter to President Trump asking for continued implementation of the U.S.-China Phase One Trade Agreement.

China’s market is significant for U.S. food and agricultural exports, particularly U.S. meat and poultry products, which now enjoy expanded market access under the agreement, the Meat Institute said in a release. 

In the letter, the organizations emphasize the agreement’s benefits for the U.S. rural economy and underscore its importance to the overall growth and vitality of the U.S. agriculture sector.    

Although the current pace of U.S. agricultural exports to China is below the pace needed to meet the Phase One goals, the letter said American farmers, ranchers, and rural communities remain optimistic that the purchases under this agreement will accelerate and be fulfilled by China and that as a result, the American agriculture sector will enjoy important market opportunities. 

“We recognize that the U.S.-China bilateral relationship is complex and multifaceted, and that there are many factors to consider as the United States crafts its foreign policy towards China,” the letter said. “We appreciate your initiative to complete and preserve this historic trade agreement with China in the face of uncertainty in maintaining international trade flows as a result of the devastating impact of the COVID-19 virus on the world’s economies.”

Unprecedented export opportunities in China await America’s farmers, ranchers, food industry workers, food processors, manufacturers and exporters, the letter said. For example, U.S. agricultural exports to China in 2019 surpassed $13.8 billion, supporting more than 2.3 million jobs in the U.S. agricultural sector. China was the No. 3 market for U.S. agricultural commodities in 2019, behind only Canada and Mexico, and has emerged as the world’s second largest economy with a rapidly growing middle class that will continue to increase its levels of disposable income and desire for improved diets, the letter said. 

“Today, the world grain and oilseed market is experiencing the greatest oversupply of production since the 1980s, and the United States is facing increasing competition from foreign sources. The U.S.-China Phase One Trade Agreement will act as foundation for prosperity of the U.S. agriculture sector,” the letter said. “At this especially challenging time, rural America needs one of its greatest potential export markets for food and agricultural products.”

Read the full letter here

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