It might have been entitled “Walking a fine line,” or “How to negotiate new tariff rate quota agreements with a country that can cause a 3-cent-per-pound swing in New York cotton futures when one of its textile mill executives sneezes.”
“It” was a meeting of the U.S.-China Joint Commission on Commerce and Trade in Washington last week. The three-day conference appeared to be an attempt to address criticism of China’s widening trade advantage with the United States, which hit a record $124 billion last year.
Officially, USDA announced that Agriculture Secretary Ann Veneman and Li Changjiang, China’s minister for the General Administration of Quality Supervision, Inspection and Quarantine, had agreed on a “consultative mechanism” on food safety, animal and plant health issues.
But Veneman and Ambassador Robert Zoellick were more expansive during a press briefing that occurred one day into the meeting.
While much of agricultural portion of the talks dealt with the resumption of U.S. beef and poultry exports to China, Veneman said they also included biotechnology and tariff rate quota issues.
At the briefing’s start, Veneman and Zoellick noted that, since it joined the World Trade Organization in December 2001, China has become a major market for U.S. agricultural exports, especially for soybeans, cotton, hides and skins, and now wheat.
Last year, China bought 36 percent of U.S. soybean exports and 23 percent of U.S. cotton shipments. More recently, China has committed to purchase 3 million metric tons of wheat with a value of almost $500 million over the next two years. The latter compares to $17 million in 2001.
The secretary noted that, partly as a result of the establishment of a U.S.-China biotechnology working group in 2002, China has approved an additional four biotech corn varieties and seven biotech canola varieties and could add two more corn varieties to that list in May.
She said the Chinese delegation also agreed that the government would provide the names of companies that have been recipients of tariff rate quotas for imports of raw cotton holder companies, a vexing issue for the U.S. cotton industry.
To emphasize that it has been working closely with the cotton industry and other groups, Veneman recognized John Gordley from the American Soybean Association, Allen Terhaar from the National Cotton Council and Alan Tracy from U.S. Wheat Associates during the briefing.
Cotton Council leaders, in particular, have had to walk a very fine line, pushing the Chinese to live up to their agreement to buy more foreign cotton while trying to push back the flow of Chinese textile imports into the United States. Cotton producers know first-hand the impact Chinese mills executives can have on U.S. cotton prices when they get annoyed.
The meeting, which also produced a pledge of a crackdown on the counterfeiting of U.S. products by Chinese manufacturers, obviously was encouraging. But, as cotton and soybean farmers have learned, a lot more talk may be required before China lives up to all of its trading promises.