U.S.-China Trade Agreement Could Bring Relief For Ohio Farmers

Jan 15, 2020

A new initial trade agreement between the United States and China signed Wednesday brings protections for intellectual property and eased regulations for U.S. exports. China is also setting an ambitious target of purchasing $200 billion in U.S. goods by 2021.

The agreement is bringing relief to Ohio’s soybean farmers, who rely on China to sell roughly one-third of their product.

“Turning this corner and being able to find that market, not only for the crop we already have but also for the crop we’re going to grow in 2020, certainly is a good sign for agriculture here in Ohio and across the country,” said Ty Higgins, spokesperson for the Ohio Farm Bureau Federation.

The specifics of the agreement aren’t clear yet, Higgins said, but it offers an opportunity for U.S. farmers to sell to China’s market.

Critics argue the agreement doesn’t do enough to clear the way for U.S. exporters to access Chinese customers free of tariffs or regulations.

China’s promise to spend a certain amount on U.S. goods and services doesn’t provide a long-term solution for exporters, said Bill Kosteas, head of Cleveland State University’s Economics Department.

“Really what we’d like to see is that our producers have access to their consumers without barriers, whether formal in terms of tariffs, quotas, or protectionism,” Kosteas said.

The agreement does ease some regulations surrounding certain agricultural products, allowing easier access to the Chinese market for U.S. exporters. The changes will help farmers impacted by the year-and-a-half long trade war between the two countries, Kosteas said, but the agreement doesn’t fully address concerns.

The more significant part of the trade agreement is an acknowledgement of intellectual property (IP), he said, as the United States and China have had different cultural approaches to the idea in the past.

“China traditionally hasn’t really acknowledged intellectual property, whereas it is a key part of our economy and our society, is to acknowledge that,” Kosteas said.

That dynamic could shift as China moves away from importing and using technology developed in other countries, he said.

“As they transition to catching up to the technological frontier and becoming creators of new knowledge and technology, they may want to have some of those same protections,” Kosteas said.

The question is whether China will uphold its side of the agreement and enforce IP protections, Kosteas said. The agreement allows the U.S. to reinstate tariffs should China fail to uphold its side of the agreement.

The intellectual property theft has been a long-standing issue for Sen. Rob Portman (R-Ohio), going all the way back to his days serving as the U.S. Trade Representative during the Bush Administration.

“I have faith in American workers, farmers, and business owners and their ability to innovate and compete successfully if there is a level playing field,” Portman said in a Wednesday statement. “All we ask for is fair and reciprocal treatment from our trading partners and today’s signing of the phase one agreement is an important step in that direction.”

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