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Issue 29 |
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Prairie Grains is the official publication of the Minnesota Association of Wheat Growers, North Dakota Grain Growers Association, South Dakota Wheat, Inc. and the Minnesota Barley Growers Assocation. |
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Wheat World China PNTR essential to keep pace with export competition "PNTR is simply saying that we are going to continue normal trading relations with China. It needs to be explained that we are not treating China in a special way,"
the Texas lawmaker said, in a meeting with leaders of U.S. Wheat Associates during the wheat export group's recent spring board meeting in Washington, D.C. "It is also about deciding whether we want a new and more
open world economy, and this can only be accomplished if we bring in China, which has one quarter of the world's population living within it's boundaries, or if we want to go back to the old world of closed markets and
closed societies," he said. China is the fourth largest market in the world for U.S. ag products today, and is by far the world's largest wheat consumer in the world, forecast to be a net importer of 32 million tons
of grain annually by 2005, Stenholm said. Demand for U.S. ag products is likely to increase as China's economy continues to grow at 8% per year. Ensuring PNTR status is essential to keep pace with our export
competition, he said. "Because China is such a large import market, our competitors are eager for us to give up this market by failing to pass PNTR. PNTR will allow our farmers and ranchers the opportunity to
have equal access to that market with our competitors," he said, adding that he does not understand "for one second" why that would be difficult for some to accept. "It (PNTR status) is not that we are giving them
something. It is basically saying that we want to reserve the right to compete with Canada, Australia and any other countries for whatever markets are in China. Why would we want to forfeit any markets to the
Canadian Wheat Board or Australian Wheat Board, which are aggressively pursuing the Chinese market?" In an earlier agreement that hinges on U.S. support of China's entry into the World Trade Organization, as well as
PNTR status, China has agreed to reduce overall average tariffs for U.S. priority ag products from a 31% average to an average of 14% by 2004. China also has committed to abide by the WTO agreement on sanitary and
pytosanitary measures, and has removed unjustified purchase restrictions of US wheat, citrus and meat. Minimum access for U.S. wheat in China will be provided through an initial tariff rate quota of 7.3 million tons
rising to 9.6 mt by 2004, which compares with 2 mt of U.S. wheat imports in 1998. Among other measures that opens up greater trade with the U.S., China has agreed not to use export subsidies for ag products, and to cap
and reduce domestic subsidies. Stenholm commended U.S. Trade Representative Charlene Barshefsky for negotiating the trade deal with China. "It is a good agreement," he said, but now the U.S. needs to uphold its
end of the agreement by approving PNTR status. He said he has a very difficult time understanding "why opening up our opportunity to get into a market of 1.25 billion people and 25% of the world population
would be bad for us," and asked U.S. wheat leaders to "work as hard as they've ever worked" to make sure the U.S. House gets the minimum 218 votes needed to pass PNTR status for China. "We simply cannot afford to
walk away and allow our competitors to reap the benefits of the Chinese market," he said. 1-877-611-TRADE So what happens if PNTR fails? Likely, that other countries will enjoy a trade advantage over the U.S. in the growing Chinese market,
said Secretary of Commerce William Daley. "The odds are that we would not get the benefits and their Minister of Industry stated very emphatically that they would not extend the same benefits to U.S. companies that they
would extend to other members of WTO," Daley said. "And once again we would be left on the outside of a market where many of our competitors will have access." Daley expects a PNTR vote by Memorial Day.
"One of the most promising markets for wheat producers in the world is on the line with this vote. We can't emphasize enough how important getting PNTR for China is for the trade advancement of the U.S. wheat
industry," said Bruce Hamnes, a Stephen, Minn. wheat producer and chairman of the Minnesota Wheat Research and Promotion Council.
Trade agreements stimulate economic recovery They point out that Mexico's rebound from the 1994-95 peso crisis occurred more rapidly than from previous crises due partly to NAFTA and increased access to the U.S.
market, while at the same time allowing U.S. products to continue to enter the Mexican market at preferential duty rates. Although the Uruguay Round Agreement of the General Agreement on Tariffs and Trade was a
critical effort to reform agricultural trade, they say that the World Trade Organization talks will be important in continuing the process of market opening, examining the role of state-trading enterprises, and refining
the dispute settlement process. In order to achieve an effective negotiating stance, they say U.S. agriculture must examine the key aspects of the existing multi-lateral trade agreement and identify areas for
improvement, along with alternative trade policy approaches and their consequences.
WHEAT WORLD is brought to you by the checkoff funded Minnesota Wheat Research and Promotion Council. |
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