Lighthizer to AgriTalk: Reports China Put Pause on State Purchases of U.S. Farm Products 'Fake News'

Posted on 06/24/2020 11:32 AM

Lighthizer to hold telephone session with counterpart in 'a few weeks'



The following are highlights of AgriTalk’s Chip Flory interview this morning with U.S. Trade Representative Bob Lighthizer:



Lighthizer's message from Trump to farmers and ranchers:


     Lighthizer: “I'm excited to be talking to farmers and I told [President Donald Trump] I was going to be on [AgriTalk]. I talked to him yesterday and he said, 'Make sure that all your listeners know that we are working hard for them every day.'”


On Peter Navarro's comments earlier this week that he walked back...


     Lighthizer: “First of all, I think Peter was misunderstood.” He said the U.S./China trade deal is “the biggest trade deal that anybody's ever done. It’s really not answering the question, but it was just a complete misunderstanding. This is a huge deal; it's really, really good for farmers. I should just take a step back and say that the farmers and ranchers have a really good team here with USDA Secretary Sonny Perdue. He's just terrific and together we've already negotiated 47% of America's trade volume and made it better between Canada, Mexico, Japan, China and even [South] Korea. We are working full time on this and we expect this deal will really continue to contribute to major sales.”


     Regarding Navarro, Lighthizer said he was talking to President Trump when he sent out his tweet clarifying that the Phase 1 agreement with China is “fully intact.”


Can you imagine a successful trade environment for the U.S. if China's not a trading partner... can the U.S. decouple from China in this?


     Lighthizer: “I don't want to speculate on that... There are a lot of challenges in our relationship with China. One thing's for sure: they are an agricultural market. We have through this agreement for the first time ever opened up massive amounts of soybeans again. Go right down the line… dairy, etc. We have approved [many] facilities to ship with the Chinese.”


With the dependency of China on the U.S., does it make those negotiations more difficult at times because ultimately both sides know that there's going to be trade on some level between the two countries?


     Lighthizer: “Well, it's a tricky relationship and, again, it's very complicated. It's got a lot of sides to it that are really important to the future of America, in my view, and I think the President's view that this is one of the most important things he's doing in office and he wants to get that relationship right.”


     “In many ways it's a bipolar world. So, the President's focused on it but a huge part of it is the fact that they've got 1.3 billion people and they import about $140 billion worth of agricultural products every year. I mean that's about as much as we export as you know to the whole world, so that's how big this is... it's a lot of purchase requirements. But a lot of the rest of [the Phase 1 accord] is these so-called structural changes... getting rid of SPS (Sanitary and Phytosanitary) and other impediments to U.S. agricultural sales and we have gotten rid of them. We have 57 commitments and they've already followed through on 50 of them, so it's a massive change. It's really, really going to have a positive effect on farmers and ranchers in this country and we're excited about it. But the relationship is going to be complicated. It's going to continue to grow and every farmer in America cares about the overall relationship as much as they do the ag relationship, so we have to get the balance right and we have to make sure that the country is safe and prosperous and that our farmers are selling lots of products.”


Some news services previously reported China state groups were told to pause imports of U.S. products. Did that actually happen?


     Lighthizer: “No, that was one of these fake news that I saw that created a big uproar. I mean within 24 hours they'd made a huge purchase of soybeans, so there was never, never a word of that. I went to the very high levels that I deal with because I was worried that there was some truth to that, but I was assured there was absolutely no truth to it.”


What is the timeline for China's purchase commitments?


     Lighthizer “We finished the agreement on the 15th of January; we got a 30-day entry into force. The question is, do you go back in the first-year commitments on a calendar year? The answer is they are on a calendar year and that puts an awful lot of pressure on the Chinese, particularly on the purchasing side, to get that done in what is a relatively brief period of time. So that was a specific point of negotiation. I think it's really important the president (Trump) thought it was really important for our farmers and ranchers that we get all that in during the calendar year, so we expect them to do that. Now keep in mind, you know this market about ten times better than I do, but a lot of this is soybeans. And that's something we're just starting to get big right now. So, by nature, it's a little bit backloaded just because of the seasons and the markets. But we expect them to do it all during the course of this calendar year.”


Are Phase 2 negotiations off the table at this time?


     Lighthizer: “I wouldn't say that. We've always taken the position that how Phase 2 goes depends really on how Phase 1 goes. We have communications. These are specific things [in Phase 1] you've got to get through, such as beef. All these various products there are actual regulations. We were doing the same thing in financial services; we're doing it in intellectual property. So, there's a lot of work being done right now. And a lot of that kind of work was slowed up somewhat by this horrible virus. So, we're working hard on Phase 1; we'll get to Phase 2 at the appropriate time.”


Is there a meeting with your Chinese counterpart on the schedule?


     Lighthizer: “This is how it works: There's daily communication. There are monthly meetings at the director level and quarterly meetings at the level of my deputy. And then I have a meeting a couple of times a year; it will be a phone call meeting and it will be coming up here in the next few weeks. But that's not the only communication we have. This is really a big deal and really a complicated agreement. I see these people who have never read the deal saying, 'Oh it's just about selling soybeans.' This is a very long agreement with a lot of detail. If you look at the pages [in the agreement], half the pages deal with agriculture, not purchases but getting ready... you're clearing up all these impediments and SPS issues and all that.”



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