China-US farm trade tension seen to intensify

 

 

Farm exports from China are set to become a greater source of trade tension as the country boosts its production and become a bigger player in world markets for labour-intensive crops.

 

Importers worldwide have already launched more than 30 farm trade cases against China in recent years. Poultry and pork are also sources of tension between China and the US.

 

Colin Carter, an agriculture economist of University of California-Davis, said there could be more trade disputes, as problems with food safety issues have diminished Chinese food exports in recent years.

 

However, he projected that China will get through the food quality issue, when trade barriers begin to disintegrate and disputes will show up as anti-dumping cases.

 

US companies and unions have filed dozens of domestic trade complaints against Chinese imports as exports of manufactured products surged at a time of rising US jobless numbers. China reacted with trade cases of its own, including new antidumping duties on US chicken exports, which US poultry exporters said would price them out of their No.2 market worth US$620 million for the first 11 months of 2009.

 

The political and trade strains between the two nations are unlikely to spill over into soy trade, Carter said.

 

Soy is the top US export to China, where the USDA forecast will become the top overall foreign market for US farm goods in a few years.

 

China depends on soy imports for vegetable oil and the high-protein meal used to feed its massive and expanding livestock sector.

 

If China had to produce its own soy, it would need 30% more farmland, Carter said.

 

China has more than twice the number of poultry as the US, and more than four times as many hogs, USDA economist Fred Gale said. He noted that farmland is in short supply in China, which holds 9% of global agricultural land but 22% of world population.