NEW YORK CITY, NY - There’s been a lot of industry speculation and concern about whether China will be able to meet its obligations under the Phase One trade deal it signed this year with the United States.
Jennifer Hillman is a Senior Fellow for Trade and International Political Economy with the Council on Foreign Relations, and says there has been some progress with the Phase One trade deal, at least on the regulatory side.
“I would say progress has already been made, even notwithstanding the pandemic. We’ve seen a number of dairy companies be certified to sell product to China: we’ve seen restrictions on beef and poultry exports be loosened: we’ve seen China remove all its tariffs on poultry. On the regulatory side of things, the structural side of things, again, I think we’ve seen some good progress.”
Hillman says the agreement requires China to buy $12.5 billion more in agricultural goods this year than it did in 2017, and an additional $19.5 billion over 2017 levels in 2021.
“China is far behind. Through the end of March, Chinese imports were $5.1 billion, compared to a target range for the period of about $9.1 billion, so only about 37 percent of the target that we would have expected for the first quarter of this year. Because China’s commitments are only done on an annual basis, there is no requirement that China ship a certain amount during a certain month or a certain quarter, so there’s no specific requirements until the very end of the year of this agreement, which would be February 14 of 2021.”
Hillman thinks it is “possible, but not likely” that China could catch up on its purchases either this fall or winter.