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TRADE DEVELOPMENTS WITH THE U.S. AND CHINA

on April 29 | in Ag News | by | with No Comments

From Canadian Cattlemen’s Association “Action News”

In April, China announced a $50 billion list of U.S. goods for possible tariff hikes, including beef, corn and wheat, in an escalating dispute with Washington. China’s move was in response to actions by the U.S. Trump Administration, which proposed a list of roughly 1,300 Chinese goods ranging from agricultural equipment to raw metals, to be levied with a 25 per cent duty. China had earlier imposed duties on $3 billion of U.S. pork, apples, and other goods in response to higher American import duties on steel and aluminum.

If China proceeds with tariffs on U.S. pork, soybeans and beef as proposed, the Canadian market will likely see large volumes of displaced U.S. pork and soybeans and lesser amounts of beef. This is expected to negatively affect both U.S. and Canadian prices of all these products.

Even more worrisome is the suggestion in the U.S., that the U.S. government should compensate U.S. producers for negative impacts of the tariff war. It is unknown what form such compensation could take, but CCA intends to express the view that it should not be production and trade distorting.

CCA’s John Masswohl attended a hearing of the U.S. Senate Trade Sub-Committee at which Senator Pat Roberts, a Kansas Republican, emphasized that farmers don’t want compensatory subsidies, they want market access. Roberts suggested the U.S. should get back into the Trans-Pacific Partnership (TPP), known today as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Senator Ben Sasse of Nebraska expressed the same view in a press release.

Canadian chilled beef recently received approval to ship directly to China on a pilot basis, and the CCA will be pursuing the premium market with our high-quality beef. This access follows CCA’s participation in Agriculture and Agri-Food Minister Lawrence MacAulay’s mission to China in November, and again in December on Prime Minister Justin Trudeau’s trip to Beijing. Follow-up will include working to earn the confidence of the Chinese market and officials to turn this into permanent access and seek approval of additional facilities. Other priorities include obtaining access for offals and negotiate a free trade agreement to eliminate the current 12 per cent duty on Canadian beef.

Also, in the U.S., the renegotiation of the North American Free Trade Agreement (NAFTA) reached a new intensity in April as it seems further “rounds” are giving way to continue high-level discussions. As the pace picked up, CCA heard rumblings of pro-Country of Origin Labeling (COOL) groups in the U.S. seeking to re-insert that issue into the negotiations. CCA and its U.S. and Mexican counterparts are united in opposing re-introduction of COOL and have written jointly to the leadership of our respective nations on that point and to express our desire for a successful agreement.

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