U.S.-China Phase One Agreement moves forward
March 30, 2020
USDA and USTR announce continued progress in implementation of U.S.-China agreement
The U.S. Department of Agriculture (USDA) and the Office of the U.S. Trade Representative (USTR) Tuesday announced continued progress in the implementation of the agriculture-related provisions of the U.S.-China Phase One Economic and Trade Agreement. The Agreement entered into force on February 14, 2020, and the recent actions described below build upon the actions announced by USDA and USTR on February 25 and March 10.
Among the recent actions:
Both countries signed a regionalization agreement that, in the event of a detection of highly pathogenic avian influenza or virulent Newcastle disease in a particular region of the United States, will allow U.S. poultry exports from unaffected regions of the country to continue (APHIS Regionalization Protocol Announcement). This action will help protect the increased access American farmers have gained in China’s poultry market. U.S. poultry exports have the potential to exceed $1 billion per year.
China notified the United States of proposed maximum residue levels for three hormones commonly used in U.S. beef production. This recognition by China of safe and science-based U.S. production methods particularly benefits trade with China in beef, a fast-growing market that imported $8.4 billion worth of beef products in 2019.
U.S. beef producers, for the first time since 2003, will have access for nearly all beef products into China. U.S. pork producers will also be able to significantly expand the types of pork products shipped to China. As per the Agreement, China expanded its internal list of U.S. beef and pork products eligible to enter its ports, including processed meat products (Updated Beef and Pork Product Lists). On the beef and beef products list, China removed all references to age restrictions, in line with its February 24 announcement that conditionally lifted restrictions on beef and beef products from cattle aged 30 months and older (Lifting Restriction on U.S. Beef 30 Months and Over Announcement). USDA estimates that American cattlemen could export up to $1 billion per year under this improved trading environment. China also published an updated list of 938 U.S. beef and pork establishments eligible to export to China. The USDA Food Safety and Inspection Service export library has been updated to reflect these changes. China has agreed to import all beef, pork, and poultry products except for those included in Annex 1 (Beef, Pork, and Poultry Products Considered Not Eligible for Import into China) of Chapter 3 of the U.S.-China Phase One Economic and Trade Agreement. U.S. ranchers and farmers can expect to increase their market share in China as a result of these actions.
China updated its list of U.S. facilities eligible to export distillers dried grains with solubles (DDGS) (Updated DDGS Facility List). In 2015, U.S. producers exported $1.6 billion worth of DDGS to China. This action, if coupled with the removal of other trade barriers, will allow U.S. exporters to recapture this market.
The U.S. Food and Drug Administration published a notice to facilitate the registration of animal feed manufacturing facilities for export to China (FDA Notice to Animal Food Exporters). In addition, in response to delays caused by the COVID-19 outbreak, China announced a streamlined process for registering new U.S. feed products for export (Updated Registration Process Announcement).
In addition, China’s tariff exclusion process is in effect, and many importers report that they are receiving tariff relief for purchases of U.S. food and agricultural products. USDA continues to publish guidance for U.S. exporters seeking to participate in this process (USDA Global Agricultural Information Network).
“These steps show that China is moving in the right direction to implement the Phase One agreement,” Secretary Perdue said. “We will continue to work with China to ensure full implementation of its commitments and look forward to seeing further improvement and progress as we continue our ongoing bilateral discussions.”
“We are working with China on a daily basis as we implement the Phase One trade agreement,” Ambassador Lighthizer said. “We recognize China’s efforts to keep the commitments in the agreement and look forward to continuing our work together on trade matters.”