February 2020 - 10

China move has little impact on specialty crops
By Stephen Kloosterman
Associate Editor
Heads of state and captains of
industry have been working to mend
U.S.-China trade relations, but recent
efforts may not have much effect on
specialty crop markets, according
to Daniel Sumner, director of the
University of California's Agricultural
Issues Center.
A " Phase One " trade agreement
avoids additional tariffs that had
been planned by the Chinese
government on may U.S. exports,
including specialty crops. The trade
deal between the U.S. and China
was announced by both countries in
December and signed by President
Donald Trump and Chinese Vice
Premier Liu He in January. The deal
was touted by the president as an
improvement to trade relations that
have smoldered for about a year and
a half, with Trump saying China
" agreed to reform of its intellectual
property practices, and agreed to
massive purchases of agricultural
products. "
Specific commodities could be
substantially impacted. For instance,
U.S. vegetable exports to China and
Hong Kong in
2018 included
$21 million in
frozen sweet
corn.
A trade deal
would seem to
be good news
in California,
a leading
producer
of specialty
crops including winegrapes, nuts
and strawberries. But Sumner, an
agricultural economist, said in
January he wasn't too excited.
" I've been surprised that the
DANIEL SUMNER
popular press and the financial press
made a big deal about how we're
coming to an agreement with the
Chinese, " he said. " The only thing
we've done is not made it worse,
that's the good news. ... Whatever
downward pressure this trade turmoil
has been putting on prices, it's still
there. "
Sumner tried to be positive on the
trade agreement.
" Maybe it'll help somebody, " he
said. " It's not getting worse, I suppose.
And maybe there's the argument
that maybe the Chinese agreed to
some intellectual property stuff.
The agriculture point is, we're a big
exporter to China and they're a big
market for us. "
U.S. goods are seen by the Chinese
as trustworthy, even premium
products, he said. That creates a
demand for them, especially as the
country becomes richer.
" There's a problem in China with
playing by the rules, " Sumner said.
" Chinese customers in China don't
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− Daniel Sumner,
University of California
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As long as the Chinese economy
prospers, there's more money for
premium products, Sumner said. His
own view is that tariffs are bad for the
world economy.
" I remember years ago, when we
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were talking about NAFTA (North
American Free Trade Agreement),
and I said, 'The most important thing
about NAFTA is, make sure it's good
for Mexico,' " Sumner said. " And it was,
and it is, and (Mexico has) become a
big customer for our stuff because the
economy's done better there than it
has before. So, in general, that's why
economists like trade, because it's so
good for keeping the whole economy
in the world growing. "
Trump has been consistent in his
NEW
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February 2020

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