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With the passing of the Permanent Normal Trade Relations (PNTR) for China, cattle producers now have the opportunity to take advantage of several market-opening concessions, according to the NCBA. "We are excited," says NCBA president George Hall. "PNTR for China means a lot of things to a lot of people. For cattle producers, it's an opportunity to take advantage of a trade agreement reached between the United States and China nearly a year ago." Under this agreement, China agreed to recognize USDA food inspection standards as equal to its own. Some beef has already been sold through these channels, but amounts were limited until PNTR passed. The U.S. Congress has reviewed and approved China's trade status every year since 1980. PNTR was initiated after China and the United States reached an unprecedented trade agreement last November. China agreed to open its market, and in exchange it asked the U.S. Congress to waive annual review and grant it permanent favorable trading status. Most notably, the trade agreement granted many market-opening concessions to U.S. agriculture. For beef producers, China has agreed to lower the tariffs on most U.S. beef products from 45 percent to 12 percent over a five-year period. Also critical is the three-year phase in allowing U.S. processors to sell directly to wholesalers and retailers in China. "Tariff reduction and access are the greatest parts of the agreement," Hall says. "It means that U.S. beef will be more affordable to Chinese consumers. That can only help with our growth there." Industry analysts predict China could grow to one of the top markets for U.S. beef exports within a few years. Part of that calculation is based on the fact that Japan, after reaching an agriculture trade agreement with the United States, became the No. 1 export market for U.S. beef. Exports to China are expected to grow from 23,000 metric tons to more than 70,000 by 2005. The American cattle industry has been able to take advantage of other trade agreements as well. For example, Mexico grew from the No. 5 to the No. 1 export market for U.S. beef after Congress passed the North American Free Trade Agreement (NAFTA). "Based on what we've done in other markets, the opportunity to expand demand for U.S. beef in China is excellent." Hall says. |
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