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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Signing For Phase-One Trade Agreement With China On Track

01/14/2020

Invitations have been extended to more than 200 attendees to witness the signing of the Phase-one trade Agreement between the U.S. and China on January 15th. The ceremony will take place in the White House with Vice-premier Liu He representing his Nation.

 

The outstanding question is the content of the agreement since there have been conflicting reports from the White House and failure to corroborate claims by Beijing. Secretary of the Treasury, Steven Mnuchin stated in a TV interview on Sunday January 12th that the English translation and the Mandarin text correspond, although details have yet to be released.

 

Beijing has not confirmed commitments to purchase specific quantities of products and is noted in a separate item posted in this edition of CHICK-NEWS, that officials in China at ministerial level have not confirmed either the scope or magnitude of intended purchases.  This reality is reflected in CME prices for soybeans that would be expected to soar with the imminent prospects of a resumption of large quantities of exports. On January 14th soybeans were up 3.6 cents per bushel at 14H00 EST and the March quotation was down 2.2 cents reflecting normal fluctuation. Prior to the 2018 trade dispute with China, approximately 25 percent of U.S. soybean production was destined for China and in 2017 exports amounted to 1,176 million bushels. In 2018 the U.S. supplied 300 million bushels of soybeans to China.

Mnuchin emphasized that the agreement calls for China to import $200 billion in additional U.S. products over a 2-year period and specifically agricultural commodities valued between $40 and $50 billon.  Although some threatened tariffs will be cancelled, the U.S. will leave in place duties on $370 billion in annual Chinese imports.

 

Complete bilateral removal of tariffs will be the subject of Phase-2 negotiations due to commence shortly after the signing ceremony.  President Trump has indicated however that finalization of a       Phase-2 agreement may only occur after the November 2020 election.

 


 
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