October 24, 2011


US, China discuss beef, agriculture issues



In order to compel China to loosen its restrictions on US beef imports and have a discussion on other agriculture issues, the officials from the office of US Trade Representative (USTR) and USDA went to Beijing last week ahead of a meeting held next month.


In an October 14 announcement, USTR said the trip would consist of meetings with Chinese officials regarding beef market access, although a USTR spokeswoman later confirmed that the officials are discussing a wide range of agricultural matters with the Chinese government.


The meetings in China this week appear intended to honour the commitment made by Deputy USTR Demetrios Marantis on July 7 that the administration would hold beef market access talks with China and Japan within 120 days. To fulfil that promise, these talks must occur before early November.


Two beef industry sources noted that the talks this week appear to have the broader scope of preparing for the JCCT, which is scheduled to take place in November in China. One industry source said he expected the beef market access talks to be a "huge part" of the discussions this week, while another said it was less clear how much time would be devoted to this issue.


One industry source said the US and China had made progress early this year in narrowing the list of 22 Chinese conditions that must be met before it will open its market to US beef exports, but that these efforts were put on hold as the Obama administration focused on securing congressional approval for the three free trade agreements with South Korea, Colombia and Panama.


This source added that a new mandatory traceability system USDA proposed in August will likely improve the US negotiating position with China, even though it does not fully meet China's demand that the US put in place a system that allows cattle to be traced back to the farm where they were born.


Under USDA's proposed system, which Agriculture Secretary Tom Vilsack has said will help boost the competitiveness of US meat exports, it would be possible to trace cattle and other livestock back to their state of origin in order to identify the source of disease outbreaks.


Islam Siddiqui, USTR's chief agricultural negotiator, is leading the delegation to Beijing along with Michael Scuse, who is acting under secretary for farm and foreign agricultural services at USDA, a USTR spokeswoman said. The officials will travel only to China during the October 17-22 trip, according to the spokeswoman.


While in China, Siddqui and Scuse are meeting officials from China's Ministry of Agriculture and the General Administration of Quality Supervision, Inspection and Quarantine, a USDA spokeswoman said.


Last month, Siddiqui told Senate Finance Committee Chairman Max Baucus (D-MT) that USTR was setting up "high-level engagements" this fall with China and Japan in an effort to expand market access for beef and beef products in those markets. The US team is not going to Japan as part of this trip, according to the USTR spokeswoman.


Prior to USTR's announcement, Rep. Kevin Brady (R-TX), who chairs the House Ways and Means trade subcommittee, said he had "no reason to believe" that USTR was not making these talks a priority.


"In our discussions with USTR, they have been very aggressive and helpful to us in pushing for all cuts, all ages in China and Japan, in fact, any country that tries to walk back from that standard," Brady said.


However, Brady acknowledged that it will not be easy to convince China and Japan to fully open their markets to US beef imports. "I do not know what the outcome is going to be. Those are not easy markets necessarily to open, but they are major ones," he said.


He signalled that getting Japan to further open its market to US beef may be a longer-term proposition, and suggested that it could be addressed in the context of Japan ultimately joining the Trans-Pacific Partnership (TPP) agreement, a move which observers say is unlikely to take place in the near term.


"I do think, in the longer term, as Japan takes a look at the Trans-Pacific Partnership, weighs its value for participation, makes agriculture reforms within the country, it might provide an opportunity for more beef market access in Japan," Brady said.


Japan currently accepts US beef from cattle under 20 months of age, while China stopped accepting all cuts of US beef after a case of mad cow disease was reported in Washington State in 2003.

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