By Philip Brasher, Executive Editor Agri-Pulse
Chinese Vice Premier Liu He is set to sign a landmark, partial trade deal in Washington this week that could be crucial to reviving a farm economy that has been dependent on an infusion of government payments to offset the damage from the U.S.-China trade war.
The details of the “phase one” agreement had not been released ahead of the signing of the agreement, scheduled for Wednesday. But Trump administration officials say that China will commit to purchasing at least $40 billion a year in a full range of U.S. farm commodities, up from the $24 billion the Chinese had been buying before the trade war began in 2018.
“It’s pretty much all for the farmers,” President Donald Trump said last week of the partial agreement.
U.S. farm groups are eagerly waiting more details of what is in the deal.
“There’s been a lot of talk, but nobody has actually … said what’s in the agreement,” said Steve Mercer, a spokesman for the U.S. Wheat Associates. “That’s what we’re hoping to see.”
Gregg Doud, the administration’s chief agricultural trade negotiator, told Agri-Pulse that China’s agreement to address a range of phytosanitary and sanitary rules and other non-tariff trade barriers will be critical to the increase in purchasing.
Commodity traders as well as farmers will be eagerly watching what happens after the agreement is signed.
“We’re really going to want to see big purchases come through right away,” Allendale Broker Nathan Cardwell told Agri-Pulse. “That’s really going to help ease some of the concerns people are having.”
However, Cardwell cautioned it would take time for everything to come to fruition. “We won’t get it done in one day, but if we can get a good start, I think that would help.”
The Trump administration shored up the farm economy last year with an infusion of trade assistance while the U.S.-China talks dragged on. The $14.3 billion in Market Facilitation Program payments that farmers received combined with other federal subsidies account for nearly one-third of net farm income for the year, according to USDA.
Meanwhile, House Democratic leaders have likely forced a further delay in final congressional passage of the U.S.-Mexico-Canada trade agreement by signaling plans to send the articles of impeachment to the Senate this week. Once the articles formally reach the Senate the resulting trial is supposed to supersede any other Senate business.
The House leadership hasn’t said when the House will formally transmit the articles to the Senate, but the House floor agenda for this week includes a vote on a resolution to appoint House managers for the Senate impeachment trial. The articles would likely be transmitted sometime after that.
The Senate was unlikely to vote on the USMCA implementing bill this week in any case. Six committees in addition to the Finance Committee must first vote on the measure before it can go to the floor, according to a ruling by the Senate parliamentarian.
The Finance Committee approved the measure last week, 25-3, and five others have scheduled votes between Tuesday and Thursday. The last, the Appropriations Committee, has not scheduled a vote.
Republicans were quick on Friday to slam Democrats for delaying the transmittal of the impeachment articles.
“After House Democrats delayed passing the United States-Mexico-Canada Agreement for nearly a year, the speaker’s indecision on impeachment will now keep the trade deal from being ratified for even longer,” said Senate Finance Committee Chairman Chuck Grassley, R-Iowa. “Farmers, ranchers, manufacturers and all American workers will pay the price.”
The USMCA bill, which passed the House, 385-41, in December after the White House worked out an agreement with Mexico and House Democrats on labor and environmental issues, is certain to pass the full Senate overwhelmingly.
The farm state of Iowa will be the center of attention in the Democratic presidential campaign this week with a debate on Tuesday sponsored by CNN and the Des Moines Register. Six candidates have qualified for the debate: Vice President Joe Biden, Sens. Amy Klobuchar, Bernie Sanders, Elizabeth Warren; South Bend, Ind., Mayor Pete Buttigieg and businessman Tom Steyer. It will be the last debate before the Feb. 3 caucuses in Iowa.
Sanders leads the race in Iowa, followed by Warren, Buttigieg and Biden, according to the latest Des Moines Register/CNN/Mediacom Iowa Poll released Friday.
Here is a list of agriculture- or rural-related events scheduled for this week in Washington and elsewhere:
Monday, Jan. 13
China Vice Premier Liu He arrives for signing of “phase one” trade agreement, scheduled for Wednesday.
Tuesday, Jan. 14
10 a.m. — Senate Environment and Public Works Committee meeting to consider the U.S.-Mexico-Canada Agreement, 406 Dirksen.
10:30 a.m. — Senate Budget Committee meeting to consider the USMCA, 608 Dirksen.
9 p.m. — CNN-Des Moines Register presidential candidate debate, Des Moines, Iowa.
Wednesday, Jan. 15
10 a.m. — House Energy and Commerce subcommittee hearing, “Cannabis Policies for the New Decade,” 2123 Rayburn.
10 a.m. — Senate Commerce, Science and Transportation Committee meeting to consider the USMCA, 216 Hart.
10 a.m. — Senate Health, Education, Labor and Pensions Committee meeting to consider the USMCA, 430 Dirksen.
Thursday, Jan. 16
8:30 a.m. — USDA releases Weekly Export Sales report.
10 a.m. — Senate Foreign Relations Committee meeting to consider the USMCA, Capitol S-116.
Bill Tomson and Ben Nuelle contributed to this report.
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