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Phase One With China is ‘Pretty Much All For the Farmers,’ Says Trump
With China confirming that it will sign a Phase One trade agreement next week, President Trump said on Thursday that the pact, with provisions for China to buy up to $50 billion a year in farm exports, “is pretty much all for the farmers.” Meanwhile, the outlook darkened for a twin Trump trade victory — final congressional approval of the new NAFTA — next week.
“Phase One is a phenomenal deal. It could be up to $50 billion in farm product,” said the president at the White House. “That’s numerous times more than they were buying in the past.” Before the trade war, China was the largest customer for U.S. ag exports, with purchases averaging $21 billion a year. The USDA has forecast sales of $11 billion to China this year.
Negotiations for a Phase Two agreement will start right away, said Trump, adding, “I might want to wait to finish it until after the [November] election because by doing that, I think we can make a little bit better deal – maybe a lot better.”
Details of the Phase One package have not been announced. U.S. trade representative Robert Lighthizer has said that increased farm exports would be a major element of the target of $200 billion a year in manufacturing, agriculture, services, and energy sales to China. “We have a commitment of $40 to $50 billion in sales for agriculture along with removal of agricultural trade barriers,” he said during a TV interview after the agreement was announced a month ago.
“Phase One is … a big percentage of the deal. Some would say half,” said Trump when asked about his plans for the next stage of negotiations. “It’s pretty much all for the farmers, also bankers. We also have regulations for a lot of things that people are going to be surprised to see.” The White House said the package includes structural reforms that will affect such issues as intellectual property, technology transfers, financial services, and currency.
China confirmed for the first time that a ceremony to sign the agreement will be held on Wednesday, said Al Jazeera. Vice Premier Liu He, the lead trade negotiator for China, will head the Chinese delegation.
Prospects for a double victory on trade for Trump next week — signing of the Phase One deal with China and final congressional approval of the United States-Mexico-Canada Agreement — waned because half a dozen Senate committees must still review the USMCA before a vote can be called.
“I would guess that with one committee finishing on [next] Thursday, it would not be possible to finish it next week,” said Senate Finance Chairman Charles Grassley. The Finance Committee cleared the USMCA on a bipartisan 25-3 vote on Tuesday.
“Uncertainty remains over how, when, and if China will meet its $40 billion to $50 billion purchase commitment,” said John Newton, chief economist at the American Farm Bureau Federation. Financial support from the administration, through its stopgap Market Facilitation Program (MFP), was an important bolster for farm income, he said. The White House has yet to release the final tranche, $3.6 billion, of aid for 2019 crops and livestock.
“Trade rather than aid remains the goal, but until then, the final round of MFP payments would address some farmers’ and ranchers’ financial uncertainty and would provide some assurance to many farmers and their lenders in advance of spring planting,” wrote Newton in a blog.
For a C-SPAN video of President Trump’s remarks about China and other topics, click here.