For the first time in its history, China has agreed to accept the import of rice from the United States; an event that analysts say indicates the two most powerful countries in the world appear to be working on negotiating a better relationship for future trade talks.
These much-anticipated trade talks are an effort by the countries to resolve the ongoing decades-long trade disputes between themselves and are scheduled to start this month, with a March 1 date set by the Trump administration as the deadline. After this deadline expires, there will be tariff hikes from 10 percent to 25 percent on $200 billion worth of Chinese goods. China has set their deadline to reinstate tariffs as March 31, giving the U.S. a few more weeks to negotiate.
After years of failed negotiations on the matter, China’s commerce ministry promised future trade negotiations instead of the typical tense meetings and back-and-forth tariffs threats they are known for. The U.S. and China’s peace gesture comes just in time for the broader trade talks they have planned. In fact, the custom’s authority in Beijing’s website indicates that President Trump and President Xi Jinping have already agreed to higher tariffs on hundreds of billions of dollars of trade.
China began its entry into the agricultural market when it joined the World Trade Organization in 2001. Before the recent new trade negotiations with the U.S. China imported rice from other Asian countries, but banned imports from the U.S. In an announcement showing progress in these decades-long trade agreements, as of December 27, 2018, China is currently accepting imports of the following rice from the U.S.: brown, polished rice, and crushed. These imports are regulated by both countries, requiring that they pass the inspection standards set by China and the United States Department of Agriculture.
The amount of rice China intends to import was not made clear, however, rice currently accounts for only a small portion of agricultural exports in the U.S. Main exports include grain, soybeans, meat, and tree nuts. In fact, in December, the USDA forecast the U.S. rice production to be around 6.93 million tons, with Chinese rice imports estimated at 5 million tons.
“I wouldn’t be surprised to see importers trying to move rice into China from California, but I don’t know if it will be in breathtaking quantities right away,” said Stuart Hoetger, an analyst and physical rice trader from California.
“The permission for U.S. rice suggests an improving U.S. and China relationship,” said Cherry Zhang, agriculture analyst consultant with JCI. She also indicated that she expected many of the imports to be ordered from state-owned companies.
Meanwhile, officials in political groups in Beijing indicate that the price the U.S. charges for rice is not competitive when compared with imports from South Asia, and that any action to formally allow the import of rice from the U.S. should be interpreted as a “goodwill gesture.”
~ Conservative Zone