USDA and USTR continue progress in US-China trade agreement

The US Department of Agriculture (USDA) and the Office of the US Trade Representative (USTR) have announced continued progress in the implementation of the agriculture-related provisions of the US-China Phase One Economic and Trade Agreement.

The Agreement entered into force on 14 February 2020, and the recent actions described below build upon the actions announced by USDA and USTR on 25 February and 10 March.

Among the recent actions:

• Both countries signed a regionalisation 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, they will allow US poultry exports from unaffected regions of the country to continue (APHIS Regionalization Protocol Announcement). This action aimed to help protect the increased access American farmers have gained in China’s poultry market. US poultry exports have the potential to exceed $1 billion per year
• China notified the US of proposed maximum residue levels for three hormones commonly used in US beef production. This recognition by China of safe and science-based US production methods particularly benefits trade with China in beef, a fast-growing market that imported $8.4 billion worth of beef products in 2019
• US beef producers, for the first time since 2003, will have access for nearly all beef products into China. US 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 US beef and pork products eligible to enter its ports, including processed meat products (Updated Beef and Pork Product Lists). 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 US 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 US-China Phase One Economic and Trade Agreement. US ranchers and farmers can expect to increase their market share in China as a result of these actions
• China updated its list of US facilities eligible to export distillers dried grains with solubles (DDGS) (Updated DDGS Facility List). In 2015, US producers exported $1.6 billion worth of DDGS to China. This action, if coupled with the removal of other trade barriers, aims to allow US exporters to recapture this market
• The US Food and Drug Administration (FDA) 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 US feed products for export (Updated Registration Process Announcement).

China’s tariff exclusion process is in effect, and many importers have reported that they are receiving tariff relief for purchases of US food and agricultural products.

“These steps show that China is moving in the right direction to implement the Phase One agreement,” USDA Secretary, Sonny 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.”