Officials say China will buy $40B-$50B in ag products, but questions remain
Trade Representative Robert Lighthizer said Sunday that China has committed to buy $40 billion to $50 billion in U.S. agricultural products in each of the next two years, but questions remain about what that commitment really means. The size of the purchases has analysts asking whether U.S. farmers and agribusiness could provide the products. In addition, it’s unusual for any country or company to commit to make purchases on any basis but competitive sales prices.
Lightizer told CBS News that the Chinese had agreed to spend a minimum of $200 billion in “manufacturing, agriculture, services, energy and the like. There’ll be a total for each one of those. … And in terms of the agriculture numbers, what we have are specific breakdowns by products, and we have a commitment for $40 to $50 billion dollars in sales. You could think of it as $80 to $100 billion dollars in new sales for agriculture over the course of the next two years. Just massive numbers.”
During a Friday White House telephone briefing for reporters, a senior administration official said “given the baseline number that we’ve looked at in 2017, those are going to be significant increases there.”
The official added, “They are commitments that – that China has made over the next two years with the objective being that that will continue, you know, beyond the next two years as well, and at a similar trajectory. And then these commitments will be enforceable under the enforcement mechanism, which is applicable to – to all the chapters of the agreement.”
The official also maintained that U.S. agriculture will be able to deliver on the commitments. “There was certainly an evaluation of what our farmers and growers and ranchers could do, in the way of exports,” the official said. “And, you know, we of course worked closely with USDA and others on those issues in doing the analysis, and with our stakeholders. And we are very comfortable that our farmers, ranchers, and growers can meet those numbers.”
Asked about structural change for agriculture, the official said, “The agriculture chapter has very strong commitments in those areas in addressing, really, a multitude of non-tariff barriers to U.S. agriculture and seafood exports, including for products like meat, poultry, seafood, rice, dairy, infant formula, horticulture products, animal feed, feed additives, pet food. And it also addresses the really critically important issue of ag biotech as well. And we – we’re, you know, we think that those are important commitments there as well as in the areas of domestic support and (tariff rate quotas) as well.”