April 21, 2011

 

US halts talk with China on beef trade

 

 

Talks on US beef exports to China's market have halted and may intensify later this year, possibly so that US can tend to the US-Korea free trade agreement (FTA) first.

 

China requests the US to meet 22 conditions before they would accept US beef exports of cattle under 30 months of age. While the US will not agree to all 22 conditions, it may eventually have to agree on a smaller list of conditions.

 

However, doing so could upset South Korea and open the US up to the criticism that it has given China a "better deal". While South Korea accepts beef from US cattle under 30 months of age, its agreement did not state the same conditions, which US is now negotiating with China.

 

As the Korea FTA is a top White House priority, the US may therefore postpone talks with China until after the Korea FTA passes in both countries, in order to ensure that any compromises that could emerge in the talks with China do not endanger prospects for swift passage of the Korea FTA, industry sources said.

 

The White House is pushing for passage of the Korea FTA by this summer. After that, the Korean National Assembly is expected to also pass the trade deal.

 

South Korea has agreed to completely open up its beef market to US beef exports. However, US exports are restricted to beef from cattle under 30 months of age under an industry-to-industry deal that is sanctioned by both governments.

 

China requests that exported cattle must have a complete record that ensures traces back to the cattle's birthplace, in order to prevent any diseases, and if disease does occur, it can be traced back to the areas the cattle originated.

 

Currently, US does not export beef to China. Several years ago, China opened its market to accept boneless beef from cattle under 30 months of age, but US exporters did not send any beef there because they did not reach an agreement on a trade protocol.

 

Sens. Michael Crapo (R-ID) said that China is "potentially a US$200 million market for US beef," and that a high-level negotiating team spent more than 10 days in China in January trying to reopen the market.

 

United States Trade Representative (USTR) Ron Kirk said that the January meetings "were important in establishing clarity on conditions needed by both countries for trade to resume, after a stall in negotiations dating back to 2007."

 

Sens. Michael Crapo (R-ID) and Pat Roberts (R-KS) both pressed USTR on beef market access talks with Japan, which also appear to have quieted down after a flurry of activity last fall. Industry sources said this was likely attributable in part to the earthquake and nuclear crisis in Japan, which has taken priority over all other issues. Kirk said, "the USTR and USDA will continue to engage with Japan's Government on this important issue at multiple levels and at every opportunity."