USDA Expects China to Begin Fulfilling Ag Purchase Commitments This Summer, Secretary Says
The U.S. Department of Agriculture expects China to begin fulfilling portions of its agricultural purchase commitments by the end of this summer, Secretary Sonny Perdue said during a March 4 House hearing. Although the coronavirus outbreak has delayed the purchase commitments under the phase one trade deal (see 2001150073) and thrown global agricultural trade into uncertainty, Perdue said the USDA has received “signals” that China intends to fully comply with the purchase agreements (see 2002250055). “We believe that China is a shrewd customer. They’re going to buy where the best deal is,” Perdue told the House Agriculture Committee. “We think they’ll come into this market in late spring and summer and fulfill the commitments.”
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Perdue said USDA officials have been in contact with Chinese officials on the commitments and plan to monitor China’s compliance. And although Perdue said the U.S. has a “unilateral ability” to enforce the deal, he suspects China will follow through on the purchases. “We see a sincerity in them living up to the agreement and those hard line numbers that [U.S. Trade Representative Robert] Lighthizer negotiated,” Perdue said. “We see a commitment to doing that.” Perdue said the administration is currently operating in a “trusting but verifying environment.”
If China does not fulfill its purchase commitments and if U.S. exporters continue to struggle for market access in other countries, Perdue said, the administration will provide another aid package for farmers and producers. In January, Perdue said he expected the phase one deal to end the recent string of aid packages (see 2001210031), but President Donald Trump said in February that another package may be available. “If the trade does not materialize as we anticipate it will, he's willing to support another one,” Perdue said. “But I'm telling farmers not to anticipate one, don’t expect one.”
Perdue said he is “optimistic” about the future of agriculture trade, pointing to the recent deal with Japan (see 1912040008) and the U.S.-Mexico-Canada Agreement (see 2002190028). “I think the new trade deals … and the new consumer demand in the United States and abroad are a signal that bright days are ahead,” he said. Perdue added that USDA still does not know how the coronavirus response will affect the deals (see 2002120043). “None of us obviously know what the impact will be with the coronavirus, and that’s yet to be determined,” he said, adding that the administration was “disappointed” trade did not pick up after the signing of the phase one deal. “We don't yet know what the effect of the coronavirus will be on China, or really the global economically,” Perdue said. “But we've got signals that they want to fulfill that commitment.”
Perdue said he expects the administration to sign a phase two trade deal with Japan but declined to provide a time frame for negotiations. He also said he expects USMCA to be implemented smoothly, saying he was reassured after a recent conversation with Canadian Minister of Agriculture Marie-Claude Bibeau. “She expects that to be concluded very quickly with no changes,” Perdue said. “We’re anxious to get all of that moving.”