President Trump and Chinese President Xi Jinping may, in fact, sign the Phase One trade agreement.
President Trump made that comment during a recent press briefing at the White House. He said the agreement is being translated and there will be a signing ceremony between the two leaders which is expected in January.
Meanwhile, Chinese leaders said the two nations are in "close contact" as a deal signing is negotiated.
Ambassador Gregg Doud, the Chief Ag Negotiator for the U.S. Trade Representative’s Office, provided details of the Phase One deal to Jim Wiesemeyer, a Farm Journal Washington Correspondent and John Herath, the Farm Journal News Director during a “DC Signal to Noise” podcast episode found here.
Doud said if the deal gets completed, it will mean big numbers for the next two years.
“The purchase commitment on the part of China is based upon a base year of $24 billion of ag purchases, which occurred in 2017,” said Doud. “What China has agreed to do is buy an additional $32 billion over the next two years on top of the $24 billion.”
Doud said to make the math easy, take 32, divide by 2 and then add that 16 to the 24.
“That means on average, each of the next two years, China has committed to buy $40 billion in ag products,” said Doud. “Now, in the first year, it'll be a little less. In the second year, it will be a little more. Another very accurate way to describe this is China has committed to buying $80 billion in ag products over the next two years.”
During the interview, Doud acknowledged critics who say the increase with China’s potential purchases will be very hard to accomplish. However, he said that view does not take into account new structural changes in the Phase One agreement.
“Here’s a statistic for everybody. China imported [last year] $124 billion in ag products from the world,” said Doud. “To put that in context, U.S. total ag exports last year were $145 billion. What we are really asking China to do here is to move from $124 billion to $40 billion out of $124 billion.”
He said once the public sees the structural changes and context of the discussion, it will be clear the transactions will be “very doable.”
“These are commitments that China has made. [That’s] $80 billion over two years and with these structural changes, I think we’re more than capable of accomplishing that,” Doud added.
Doud said China will likely purchase soybeans, ethanol and DDGs. However, new demand for meat, wheat, rice and corn may be the biggest winners in the deal.