By Codi Vallery-Mills

After weeks of speculating on what would take place at last week’s G20 Summit in Buenos Aires, Argentina where 20 of the world’s leading countries convened, it is being seen by the White House and others in the beef industry as a successful meeting in terms of re-establishing trade relations.

The U.S.-Mexico-Canada Agreement (USMCA) was signed and the White House announced that the U.S. and China will enter negotiations on several key trade issues, including agricultural trade. This was the first face-to-face meeting President Trump and Chinese president Xi have had since the two sides began trade disputes and implemented trade tariffs earlier this year.

President Trump said of the meeting that it was “amazing and productive, with unlimited possibilities for both the United States and China. It is my great honor to be working with President Xi.”

Of the news, U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom said, “USMEF supports the Trump administration’s efforts to finalize the USMCA and to continue seeking resolution of the metal tariffs dispute with Mexico and Canada, which resulted in retaliatory duties on U.S. pork and beef. U.S. meat exports have also become entangled in trade disputes with China, so it is encouraging to see the U.S. and China return to the negotiating table. Global demand for U.S. red meat is very strong, but exports cannot reach their full potential until the retaliatory duties imposed by Mexico, China and Canada are removed.”

With China, President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10 percent rate, and not raise it to 25 percent as threatened earlier. China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between the two countries. China has agreed to start purchasing agricultural product from U.S farmers immediately, according to the White House.

President Trump and President Xi have also agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25%.

On Monday the stock markets responded positively to the 90-day pause in tariffs that China and the U.S. agreed to with the Dow pushing upward to rise nearly 442 points. 

Finer Details 

of the USMCA

Turning to trade negotiations closer to home, the new USMCA deal, which effectively replaces the North American Free Trade Agreement, is entering its final authorization stages. Under the agreement U.S. will see:

• billions of dollars in additional vehicle and auto parts production in the United States. Requirements that 75 percent of auto content to be produced in North America.

• Mexico agreed to historic labor reforms to provide for genuine collective bargaining. The agreement prohibits the importation of goods produced by forced labor.

• Canada will end its “Class 6” and “Class 7” programs that allow low-priced dairy products to undersell American dairy producers.

• Canada will increase market access for United States dairy products, eggs, and poultry.

• USMCA includes robust copyright protection, 10 years of data protection for biologic drugs, and new protections against the theft of trade secrets.