Long wait is finally over
Producing a trade relationship between the United States and China that is fair to both countries and puts an end to Chinese practices that have harmed the American economy has been a major goal of President Donald Trump. During the last two years, the ongoing negotiations regarding an improved trade pact created major difficulties for farmers in Iowa and across the nation’s heartland. In response to tariffs put in place by the U.S. to put pressure on China, that country’s government imposed a variety of retaliatory measures targeting American farmers. A once promising agricultural export situation for Iowa was in jeopardy. The sales to China of corn, soybeans, beef and pork slowed and their long-term prospects were in doubt.
The long wait for progress on achieving a deal is over. Wednesday, the president signed phase one of an immensely important trade agreement between our nation and China. It addresses a wide range of issues relating to agricultural trade, protection of intellectual property, technology transfers, financial services, currency matters and expanded U.S. exports. Importantly, it contains key provisions that should help make it an enforceable arrangement.
Iowa Gov. Kim Reynolds and U.S. senators Charles Grassley and Joni Ernst, who have been in constant communication with the president concerning the importance of completing this new trade agreement, were present at the White House for the historic signing of this initial part of what is expected to be a two-part arrangement. Their presence underlined just how crucial the measure is for the Hawkeye State.
“As Iowa’s fourth largest trading partner, China is a critically important market for Iowans, and this phase one deal which is especially promising for our ag and manufacturing sectors will help provide certainty for folks back home,” Ernst said in a statement released simultaneously with the signing ceremony.
Mike Naig, who heads the Iowa Department of Agriculture and Land Stewardship, underlined the significance of this agreement for Iowa by releasing data on the magnitude of our state’s agricultural sales to China. They were already huge before the slowdown that took place during the negotiations. Now they have the possibility of growing enormously. Here are some of the numbers from 2017 and 2018 (based on WISERTrade data):
– Iowa exports to China in 2018 amounted $415 million of soybeans, $40 million of animal feed, $480,000 of beef, $30 million of pork and $10 million of corn.
– Iowa exports to China in 2017 totaled $1.6 billion of soybeans, $50 million of animal feed, $322,000 of beef, $42 million of pork and $27 million of corn.
China has committed in the phase one arrangement to buy at least $32 billion in U.S. agricultural goods in 2020 and 2021. Naig speculated that those sales might reach $40 billion. A significant portion of those exports will come from Iowa.
Farm?News welcomes this trade deal. A carefully crafted commercial relationship between China and the United States can be a win for both nations. This new China pact, the congressional approval of the U.S.-Mexico-Canada agreement and a recent trade arrangement with Japan combine to make the years just ahead look immensely promising for agriculture. That’s wonderful news for Iowans. The hard work that made these trade arrangements possible deserves applause and appreciation.
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