USDA Secretary Mike Johanns announced this week that China had conditionally agreed to resume purchases of U.S. beef. Details are yet to be finalized. The U.S. exported $100 million worth of beef to China in 2003.
As we've learned in our dealings with Japan, a lot of time can pass between agreement and implementation, and what actually gets implemented can be another matter. China, however, isn't a major volume market, but it could be some day if its economy continues to soar.
The greatest benefit from the China agreement is in public relations. The more Asian countries that resume imports of U.S. beef, the more it pressures Japan and Korea to do likewise. In addition, the U.S. needs some place to ship product where it can actually prove it can deliver product efficiently and according to the specifications of the agreement.
This week, Hong Kong delisted a second Cargill U.S. packing plant when a shipment of beef was found in violation of the agreement. The three incidents -- one in Japan and two in South Korea -- haven't been food-safety issues, but it's frustrating that U.S. ineptitude is providing these countries with the leverage to keep their markets closed. What's really mind-boggling is that, with the kind of dollars at stake for the U.S. in these markets, these outfits can't get it right.
We're not talking about recovering millions of dollars, or even hundreds of millions; we're talking about billions of dollars.
Just a few years ago, doing business with China was considered risky. But as China has incorporated capitalistic reforms, it's emerged as a rising economic power. The Chinese government is giving every signal it understands that, in order to enjoy access to other nations' markets, it must provide access to its own, as well as adopt internationally accepted business practices.
The optimism on this latest announcement about China seems well founded, and there's a lot of political incentive to get the deal done before the April 20 visit to the U.S. by Chinese President Hu Jintao. -- Troy Marshall