US Beef Exports to China Less Than Promising
United States beef is now eligible to enter the Chinese market under trade agreements reached by the leaders of the two countries and by the Chinese Certification and Accreditation Administration and the US Food and Drug Administration. The agreements made possible the lifting of a 13-year ban on US beef to China.
Theoretically, that could help the the US goods trade deficit with China, which rose 8.9 percent year-on-year in May to reach $31.6 billion, and 14.4 percent over April. This, according to a report released by the US-China Economic and Security Review Commission, is the highest bilateral goods trade deficit since October 2016. The commission is a US government agency that reports on the national security implications of the bilateral trade and economic relationship between the US and China.
But there are a few strings attached to allowing US beef in China. China, the world’s second-largest importer of beef, will now permit imports of US beef for livestock under 30 months that can be traceable to a US birth farm or first place of residence or port of entry. The problem is that only 15 percent of US producers participate in the voluntary beef traceability system, which, the report concludes, “limits gains for US exporters hoping to reach the Chinese market.”
The same agreements between the two regulatory agencies allows US dairy and infant formula certified by the US Department of Agriculture to be exported to China and set of framework for expanding Chinese poultry access to the US. Since 2013, the USDA’s Food Safety and Inspection Service (FSIS) has permitted Chinese processing of chicken raised and slaughtered in either Canada or the US to be exported to the US. In March 2016, the FSIS determined China’s poultry slaughter inspection system to be equivalent to that of the US.
That set the stage for FSIS, June 16, 2017, to propose a regulatory amendment adding China to the list of countries eligible to export poultry products from birds slaughtered in China. The amendment will be open for public comment until August 15, after which the FSIS will make a final determination.
Overall, US exports to China increased 19.7 percent year-on-year in May to reach $10.2 billion. Cars and pharmaceuticals largely contributed to this increase. US imports from China rose 11.4 percent year-on-year in May to $41.8 billion due to imports of computers and accessories. Year-to-date, the US deficit reached $138 billion, an increase of 5.2 percent over the same period last year.