Weekly USMEF Audio Report: Phase One Trade Agreement Provisions Implemented, Expanding Access for U.S. Beef in China
DENVER, CO – March 22, 2020 – On Friday, March 20, the USDA Food Safety and Inspection Service (FSIS) updated its Export Library for China to reflect expanded access for U.S. beef and pork. These changes were among the provisions negotiated in the U.S.-China “Phase One” trade agreement.
Access for U.S. beef has expanded significantly, explains Joel Haggard, U.S. Meat Export Federation (USMEF) senior vice president for the Asia Pacific. Many more U.S. facilities are now eligible to export beef to China, and exports are no longer limited to beef from cattle less than 30 months of age. China is also adopting international standards for growth hormones commonly used in beef production, rather than enforcing a zero tolerance policy. Haggard notes that in a another positive development, China is allowing importers to apply for relief from retaliatory duties on U.S. beef. When successful, this process can lower the effective tariff rate on U.S. beef entering China from 42% to the most-favored-nation (MFN) rate of 12%.
U.S. pork will also benefit from market access gains negotiated in the Phase One agreement. Under the changes posted on Friday by USDA, more facilities are eligible to export pork and pork products to China, and the FSIS Export Library now clarifies that this includes processed pork products and pork trimmings. Importers may also apply for tariff relief on U.S. pork entering China. When successful, this process can lower the effective tariff rate on U.S. pork muscle cuts from 63% to 33% and on pork offals from 67% to 37%.
(NOTE: U.S. beef entering China is subject only to retaliatory duties imposed in response to U.S. Section 301 tariffs, which is why China’s tariff exclusion process may lower the effective rate to the 12% MFN rate. U.S. pork is subject to retaliatory duties imposed in response to both Section 301 and Section 232 tariffs. So when an importer’s application for Section 301 relief is successful, the effective rate for pork muscle cuts drops to 33% (8% MFN rate + 25% Section 232 duty) and for pork offals the rate drops to 37% (12% MFN rate + 25% Section 232 duty.)
The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry. It is funded by USDA; the beef, pork, lamb, corn and soybean checkoff programs, as well as its members representing nine industry sectors: beef/veal producing & feeding, pork producing & feeding, lamb producing & feeding, packing & processing, purveying & trading, oilseeds producing, feedgrains producing, farm organizations and supply & service organizations.
Submitted to the BARN by:
Vice President, Communications
U.S. Meat Export Federation