September 20, 2000

The Senate approved an amendment-free bill granting permanent normal trade relations for China. The 83-15 vote virtually guarantees U.S. support for China's bid to enter the World Trade Organization and China's loosening up its trade barriers to U.S. agricultural products.

Had the Senate amended the bill, as had been feared for weeks, it would have had to go back to the House where a far more contentious atmosphere awaited it. The House could have rejected the amended version, unlike a controversial earlier vote to approve it, and that would have spelled the demise of the entire PNTR effort.

Members of the Agriculture Coalition for U.S.-- China Trade, representing more than 80 agriculture groups dedicated to promoting open trade with China, said the vote "is the equivalent of a life-restoring cloudburst after months of drought. Passage of PNTR ensures that American producers will have the opportunity to compete for business on a level playing field once China joins the WTO.

Without congressional approval, China still could have joined the WTO, but the United States would not have had the trading leverage it could have with PNTR, leaving producers in other countries, notably Japan, France and Canada, with the advantage of lowered tariffs and other substantial market opportunities denied Americans.

"U.S. producers are increasingly dependent on foreign customers for their economic future. China, home to one out of every five people in the world, is the most significant new market for American farmers in a generation," the coalition said.

The organizations also gave U.S. Trade Representative Charlene Barshefsky and her team of negotiators "tremendous credit for negotiating an extraordinary market access agreement."

National Pork Producers Council (NPPC) President Craig Jarolimek said PNTR for China is "the key to potentially the most significant new market for U.S. pork producers in many years." The Senate vote opened the door to a huge potential new market."

Agribusiness economist Dr. Dermott Hayes of Iowa State University has predicted demand for pork by 1.2 billion Chinese consumers easily could increase the value of hogs by $5 per head when the agreement is fully implemented. Hayes added that because Chinese consumers prefer different cuts of meat, particularly pork variety meats such as stomachs, kidneys, hearts, and intestines, increased pork exports to China would not raise domestic prices for the American consumer.

"We are excited," said National Cattlemen's Beef Association President George Hall, a cattle producer from Mustang, OK. "PNTR for China means a lot of things to a lot of people. For cattle producers, it's an opportunity to take advantage of a trade agreement reached between the United States and China nearly a year ago."

Under this agreement, China agreed to recognize USDA food inspection standards as equal to its own. Some beef has already been sold through these channels, but amounts were limited until PNTR passed. Most notable, the trade agreement granted many market-opening concessions to U.S. agriculture. For beef producers, China has agreed to lower the tariffs on most U.S. beef products from 45% to 12% over a five-year period. Also critical is the three-year phase in allowing U.S. processors to sell directly to wholesalers and retailers in China.

"We understand that PNTR isn't a panacea," Hall said. "We also understand that its promises won't occur overnight. We do know, however, that trade has become increasingly important to our industry. Access to the world's most populated market is win-win for U.S. cattle producers."