Hogs, Wheat Push for China Deal
April 12, 2000
U.S. hog producers will earn $5 more per head and wheat farmers will reap "tremendous trade benefits" if permanent normal trade relations with China are granted by Congress. Hog exports would not affect U.S. consumer prices, says Iowa State University economist Dermott Hayes, because the Chinese prefer different cuts.
"One of the striking things about Chinese consumption habits is that the parts of the animal least favored by U.S. consumers are those which are most in demand by Chinese consumers," says Hayes. "This is why most of the pork and beef imports smuggled into China today are feet, stomachs, kidneys, hearts, tongues, ears and lungs."
Hayes’ work, says National Pork Producers Council President Craig Jarolimek, demonstrates that vast opportunities are waiting for U.S. pork producers in China.
The National Association of Wheat Growers says with China in the World Trade Organization, the same trade rules would apply to China as to the 135 other member countries and give other members a multilateral dispute mechanism to address trade concerns. Other benefits are:
–The tariff rate quota for wheat would increase to 7.3 million metric tons when China accedes to the WTO and increase to 9.3 million tons by 2004;
–The tariff under the quota for wheat will remain at 1%, lower than most Asian countries. Agricultural tariffs would decline on average to 17.5% by 2004 from a current average near 30% with some tariffs greater than 65%;
–The elimination of export subsidies;
–That state owned and state invested enterprises would have to act on a commercial basis; the Chinese government would not interfere with commercial decisions outside the terms of WTO agreements;
–That the long-standing restrictions on imports of U.S. wheat from areas where TCK;, a wheat fungus, is known to occur, would be lifted; U.S. wheat exporters easily could meet the allowance of 30,000 TCK spores per 50-gram sample;
–And that the United States is not required to change any market access commitments to achieve the benefits, just approve permanent normal trade relations for China.