On January 15, 2020, the U.S./China Trade agreement was signed. This is what is popularly known as Phase-one, implying that other phases are coming. There are many general topics that cover all import and export issues and there are sections covering specific areas, like dairy. This post will cover the general topics briefly and then cover the specific items for dairy.
THE GENERAL ISSUES
The areas covered are listed below: There are enforcement measures defined for these categories.
- General obligations of intellectual property rights
- Trade secrets and confidential business information
- Patent protection
- Piracy and counterfeit goods
- Trademark rights and copyright protection
- Technology transfer
The term “China shall” is repeated 88 times. This is used in sentences like “China shall require”, “China shall establish”, “China shall permit”, etc. All of these sentences imply that China does not have in place policies and procedures to control many of the items listed above.
The term “The United States affirms” that existing U.S. measures afford treatment equivalent to that provided for in this agreement, is used 27 times. This suggests that binding policies and procedures are currently in place in the U.S.
SPECIFIC ITEMS FOR DAIRY
In all cases, dairy products exported by the U.S, must be manufactured in a facility listed by the FDA and carry a sanitary certificate issued by the Agriculture Marketing Service (AMS). The U.S. will provide a list of these facilities and update them regularly. China will allow imports of U.S. Dairy products that meet this criterion.
- Extended shelf life milk
- Fortified milk
- Ultra-filtered milk
- Dairy permeate powder
- Infant formula
It is doubtful that any of these products covered in the U.S./China trade agreement will bring a significant increase in U.S. milk demand. The first three items listed above are niche fluid milk products. The fourth product listed, dairy permeate, is a fractionated element of milk components and is primarily lactose that is left over from ultra-filtered milk prepared for cheese production. Infant formula, the last dairy product covered in the agreement, is a relatively small volume item in the long list of dairy products.
It is difficult to quantify the impact of the general items listed at the top of this blog. However, they are certainly a step in the right direction for improving equable trade with China.
The agreement brought no major reductions in tariffs as a result of the signing of the trade agreement. However, some threatened tariff increases were postponed, and a few reductions were made prior to the signing as a “good will” gesture. Hopefully more tariff reduction will occur as U.S./China relations improve. The recent outbreak of the Coronavirus will no doubt slow the implementation of the agreement.
Editor’s Note: John Geuss is a dairy consultant based in Florida. This information appears in his Milk Price blog column sponsored by Addiseo and is published here with permission. He may be contacted at firstname.lastname@example.org