President Trump aims to sign a “phase one” trade agreement with China that will result in vast sales of U.S. farm exports on the way to resolving “a whole range of structural and significant issues” between the nations, including intellectual property theft, said Vice President Mike Pence on Thursday. China would spend $40 billion to $50 billion on ag products, according to the White House, though the terms are murky and could be tied to reciprocal moves by the United States.
“Now, President Trump still believes Beijing wants to make a deal. And we welcome the support for American agriculture in the new phase one agreement and hope it can be signed as soon as the APEC summit in Chile,” said Pence in a speech to the nonpartisan Wilson Center. “But China knows there’s a whole range of structural and significant issues between our two countries that also must be addressed.”
China was the No. 1 market for U.S. farm exports before the trade war, buying roughly $21 billion worth a year. Soybeans were the leading commodity — one of every three bushels grown in the United States went to China. This year, China would rank fifth, with purchases forecast at $7.5 billion.
Citing unnamed “people familiar with the matter,” Bloomberg reported that China intends to “buy at least $20 billion of agricultural products in a year if it signs a partial trade deal with the United States, and would consider boosting purchases further in future rounds of talks.”
If purchases began after the Asia-Pacific Economic Coordination summit meeting, set for Nov. 16-17 in Santiago, Chile, the flow of U.S. farm exports would likely return to previous levels just before the U.S. presidential election. According to published reports, China might link higher annual purchase levels in the following year to U.S. removal of retaliatory tariffs.
Pence said China “continues to aid and abet the theft of our intellectual property,” costing U.S. businesses “hundreds of billion of dollars each year.” China also demands that U.S. companies hand over trade secrets if they want to do business in China, he said. The administration will negotiate in good faith “to bring about long-overdue structural reforms in our economic relationship. As I heard again from him this morning, President Trump remains optimistic an agreement can be reached.”
“My first thought: Pence’s speech struck up the same old tune in portraying and defining China,” tweeted Hu Xijin, editor of the China-based Global Times. “But he spoke quite positively on improving China-U.S. relations, saying the U.S. doesn’t want to decouple from China, and the two can and must work to share a peaceful and prosperous future.” Hu is believed to have high-level contacts in the Chinese government, and his comments may provide insight into leadership views.
On Thursday, private exporters reported the sale of 264,000 tonnes of U.S. soybeans for delivery to Chinese buyers this marketing year, said the USDA. It was the first large sale to China in two weeks. The soybeans are worth about $90 million at current prices on the Chicago futures market.
To read a White House transcript of Pence’s speech, click here.