WASHINGTON – Since the announcement of US-China Phase One Economic and Trade Agreement in late 2019, the global economy has been rocked by the coronavirus (COVID-19) pandemic, which magnifies the importance of trade officials continuing to move forward with its implementation. This was the overarching theme of a June 16 letter sent to President Donald Trump by a coalition of organizations representing a wide spectrum of US-based agribusinesses.
The letter quantifies the value of the past and current exports of agricultural products to China and the reliance of the US economy on the trade agreement in the future. One of the many organizations signing the letter, the North American Meat Institute encouraged President Trump to move forward with the agreement “due to the significance of China’s market for US food and agricultural exports, particularly US meat and poultry products, which now enjoy expanded market access under the agreement.”
The joint letter expressed appreciation for the president’s support of the US food and agriculture industries and stated that the first phase of the agreement represents historic commitments from China to purchase agricultural products from US producers. It also pointed out that the Phase One goals are challenging and have not yet been achieved.
“While the current pace of US agricultural exports to China is below the pace needed to meet the Phase One goals, 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,” the letter stated.
It went on to say that realizing the full potential of the agreement is critical to ensuring the growth of the US agricultural sectors.
“This is especially important considering that US net farm cash income in 2020 is projected to decline 9% or $11 billion from the prior year. In inflation adjusted dollars, US net farm cash income is down nearly 30 percent from the recent high in 2012,” the letter said.
With the US food and agricultural industry supporting more than 22 million jobs and representing about 20% of the US economy, the coalition expressed a collective recognition that the trade agreement is just one complicated part of developing a foreign policy with China that both sides view as being beneficial, especially during the pandemic.
“We recognize that the US-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. 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,” the letter said
It concluded: “We reiterate our great appreciation for you and your Administration’s efforts to carry out the Phase One Trade Agreement with China to advance America’s agricultural economic interests by opening new export opportunities and by tackling non-tariff concerns our industries have identified. The Phase One Trade Agreement with China is vital to economic stability and growth for America’s farmers, food manufacturers, food industry workers, agribusinesses – as well as the full spectrum of other non-agricultural sectors of the US economy whose jobs and economic well-being are dependent upon agriculture.”