US-China ag trade growth hemmed by barriers: report

The removal of trade and “behind-the-border” barriers could boost bilateral agricultural trade between the US and China to nearly $100 billion before 2025, according to a new report from the US Chamber of Commerce.

Two-way trade in agriculture between China and the US was $35.6 billion last year and is already expected to rise to $71.2 billion by 2025, according to the report’s baseline scenario.

But the removal of barriers across agricultural and forest products, fish and wildlife and farm machinery could tack on an additional $28.1 billion, resulting in a $99.3 billion total.

“For the United States, this means sustaining the openness of our market and addressing regulatory concerns, while ensuring product safety for imports,” wrote US Chamber of Commerce executive vice president Myron Brilliant.

“For China, this includes simplifying and speeding up biotechnology approval processes, giving equitable treatment to animal vaccine imports and eliminating subsidies to locally-produced agricultural products, equipment and machinery.”

Trade barriers discussed in the report, which coincides with this week’s US-China Joint Commission on Commerce and Trade (JCCT) summit, include anti-dumping measures as well as tariff-rate quotas maintained by the US on beef, cotton, dairy products and sugar, while China enforces similar measures on corn, wheat, rice, cotton, sugar and other products. The US Chamber of Commerce calls for the reduction or the elimination of these measures.

“Such measures are used to protect vulnerable domestic industries and/or to facilitate domestic markets development. But at the same time, they create barriers for foreign exports to enter the market and compete with domestic products,” the authors wrote.

The report also says that non-tariff – or “behind-the-border” – barriers are even more harmful to the growth of agricultural trade, including product quality and safety regulations, as well as administrative barriers such as a lack of mutual recognition of each country’s organic certification.

It calls for steps to enhance the transparency, predictability and equity of China’s food safety regulation to reinforce consumer confidence about the government’s role on food security and ease trade flows.

Addressing biotechnology and resultant crops, the report states that China’s regulatory approval process for the sub-sector is “asynchronous, slow and unpredictable”. It calls on the Chinese government to streamline an approval process that currently takes between four and seven years and educate its public about biotechnology and associated safety concerns.

In a letter to President Obama last week, a group of 37 Senators complained that some American biotechnology products have been awaiting Chinese regulatory approval for as long as five years and called for the approvals to be prioritised in this week’s JCCT discussions.