The Trump administration announced Thursday that China will allow imports of U.S. beef under certain conditions by no later than July 16, 2017. The announcement was part of the Initial Results of the 100-Day Action Plan of the U.S. – China Comprehensive Economic Dialogue released by the White House (read the full joint release here). This 10-point plan also includes an agreement for the U.S. to accept cooked poultry from China along with Initial Actions for financial services, investment, and energy.
The language specific to beef is the first point on the fact sheet attached to the release and states “Following one more round of technical consultations between the United States and China, China is to allow imports of U.S. beef on conditions consistent with international food safety and animal health standards and consistent with the 1999 Agricultural Cooperation Agreement, beginning as soon as possible but no later than July 16, 2017.”
The announcement is certainly good news for the U.S. cattle industry. National Cattlemen’s Beef Association President Craig Uden is being quoted by many outlets as saying “It’s impossible to overstate how beneficial this will be for America’s cattle producers,” Some estimates suggest China to be a potential $2.6 billion market for U.S. beef. However, it will remain difficult to estimate the impact until the trade specifications are known.
While a trade date has been set, it is still unclear what beef products will be allowed. The 1999 Agricultural Cooperation Agreement that is mentioned in the fact sheet casts a broad net by stating that “China will accept meat from all USDA Food Safety Inspection Service (FSIS) approved plants” (read the full 1999 agreement here). The requirement that beef will have to be USDA inspected is not a surprise. It is also very unlikely to be the only trade condition. This document does not mention factors such as traceability or beta agonist use that have been expected by many to be part of negotiations. It is also not obvious what the “international food safety and animal health standards” are and what impact they will have on trade.
In summary, we have a date! A date that has been 14 years in the making. This is a critical step to getting U.S. beef into China. The technical consultations will still be the driving factor in determining the specifications of beef China will accept (discussed further here). The trade specifications will determine the type of impact we can expect exports to China to have on demand for U.S. beef in the short term.