March 25, 2020

US and China make agriculture provisions inroads as part of their Phase 1 trade deal

The US Department of Agriculture (USDA) and US Trade Representative (USTR) listed measures taken to boost China's purchases of US agricultural products and China's tariff exemptions for those US agricultural products, reported Reuters.

As part of the US-China Phase 1 trade deal, China agreed to double its purchases of US agricultural products and drop trade barriers that limited access to said US agricultural products.

If the US reports an avian influenza case, China has pledged only to suspend poultry imports for states that report a positive case. Previously, China will suspend nationwide US imports if any US state reported a positive avian influenza case.

China had lifted a ban on US poultry and eggs in November last year, which was imposed in January 2015 because of an avian influenza outbreak in the US. This affected a market worth US$500 million in 2013.

In addition, China had increased its US agricultural product purchases, with it's biggest purchase of US corn since 2013 and its first imports of hard red winter wheat since 2017.

However, US soybean exports to China has remained below pre-trade war numbers. USDA data showed as of mid-March 2020, China has purchased 12.1 million tonnes of soybean, far lower than the 35 million tonnes in the same period in 2017.

-      Reuters