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U.S. and China committed to Phase One trade agreement

Getty Images/iStockphoto Illustration of two ships, one with the China flag and one with the U.S. flag loaded with freight containers
Legislative Watch: Phase One trade commitment; exports estimated at $135B; Food Box gets boost; convention forgoes platform.

U.S. and Chinese trade officials reaffirmed their commitment to the Phase One trade deal during a scheduled call this week. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin participated in the call with China's Vice Premier Liu He to discuss implementation of the U.S.-China Phase One Economic and Trade Agreement.

They discussed implementation of the agreement; steps China has taken to effectuate structural changes; intellectual property rights; removal of barriers to American companies in areas of agriculture and financial services; and China's purchases of U.S. products.

Following the call, the USTR issued a statement saying, "Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement."

China has recently increased its purchases of corn and soybeans but is still behind meeting this year's commitment under the agreement.

The Phase One agreement calls for discussions on implementation of the agreement every six months between USTR and designated vice premier of China.

FY '20 agricultural exports estimated at $135 billion
USDA's latest "Outlook for U.S. Agricultural Trade" estimates fiscal year 2020 agricultural exports at $135.0 billion, down $1.5 billion from May's projection. This reduction is due to expected lower horticultural, beef, veal and soybean exports.

Imports are forecast at $131.7 billion, up $1.5 billion from the previous report due to increases in horticultural products and beef and veal imports. FY '20 agricultural exports will be the lowest since 2016.

Fiscal year 2021 agricultural exports are forecast at $140.5 billion or an increase of $5.5 billion over FY '20. The main reason for the increase is expected higher soybean and corn exports. Soybean exports are expected to reach $20.4 billion, up $4.2 billion from FY '20, due to strong demand from China and reduced competition from Brazil. Corn exports are projected at $9 billion, an increase of $700 million over FY '20. Agricultural exports to China are projected at $18.5 billion, $4.5 billion higher than FY '20.

Fiscal year 2021 livestock, poultry and dairy exports are forecast at $32.3 billion on growth in beef, poultry products and dairy, up $500 million from FY '20. USDA projects beef exports will increase by $200 million. Pork exports are forecast unchanged at $7.0 billion on stable volumes and lower unit values.

The report says, "Exports to China are expected to slow owing to ongoing hog herd rebuilding, while demand from other key markets may be constrained by weak economic growth."

Agricultural imports for FY '21 are projected to reach $135.0 billion due to increases in horticultural products and grain and feed imports.

Additional $1 billion for Food Box Program
The administration announced an additional $1 billion for the Farmers to Families Food Box Program for a total of $4 billion.

At an event this week in North Carolina to celebrate the program, President Trump says, "When the China virus struck our nation, many farmers had no place to send their crops or livestock. At the same time, families across the country were in need of groceries. They wanted to eat well. … That's why we launched the Farmers to Families Food Box program. Through this program, the USDA is purchasing food from farmers, then local distributors pack and deliver the boxes. And families in need get it, and they get to eat very well."

USDA's Agricultural Marketing Service works with national, regional and local distributors to purchase fresh produce, dairy and meat products from producers and distributes the products to those in need.

According to USDA, the Farmers to Families Food Box program has distributed over 75 million boxes to those in need.

Republican Convention forgoes platform
The Republican National Committee decided to forgo adopting a platform at this year's convention and instead adopted a resolution that it "will continue to enthusiastically support the President's America-first agenda."

In an effort to shore-up Trump's support with rural voters, the convention featured various speakers from agricultural states including a Wisconsin dairy farmer, Maine lobsterman, Iowa Gov. Kim Reynolds, South Dakota Gov. Kristi Noem, and Sen. Joni Ernst (R-IA).

Source: P. Scott Shearer, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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