Hesitancy to sign trade deal 'leaving money on the table'

By MITCH LIES

Capital Press

SHANGHAI -- Among a dozen posters hanging in the USDA Agricultural Trade Office's conference room here are several advertising Northwest cherries, California prunes and Oregon nurseries.

In grocery stores here, Rogue ales from Oregon are a hot item, as are Pacific Food soups from Oregon and Amy's Kitchen soups from California.

The West Coast's presence in China's diet is significant.

"Most customers want to try American products, and after they taste them, they think, 'Oh it's good' and they want to buy them again," said Angela Zhou, a purchaser for City Shop, one of Shanghai's top grocery chains.

U.S. farm, forestry and fishery exports to China topped $19 billion last year. But market share in China for U.S. products could be much higher.

High tariffs on U.S. agricultural products make it hard for West Coast farmers to compete with Chilean, Peruvian and Southeast Asian farmers who face no tariffs in China.

"It's a real killer for us," said Dalton Hobbs, an assistant director of the Oregon Department of Agriculture.

"It's hugely disappointing to learn what we're up against," said Eric Pond, chairman of the Oregon Blueberry Commission.

Hobbs and Pond were part of a trade delegation in China on a 13-day, three-country trade mission. The delegation returned to Oregon Sept. 23.

While Congress debates the merits of entering into free trade agreements with South Korea, Chile and Panama, other countries that have ratified free trade agreements with several Asian countries are accumulating market share, Hobbs said.

"Chile basically is at zero (tariff) on everything we want to sell into these (Asian) markets," Hobbs said.

"We're leaving money on the table," he said. "And the problem is there is no urgency to negotiate a free trade or a bilateral trade agreement, and there doesn't appear to be any way to turn up the knob on the urgency."

Jim Wayman, political counselor for the U.S. Embassy in Seoul, said the longer the U.S. waits to pass a free trade agreement with South Korea, the more difficult it becomes for the South Korean assembly to accept it.

Hobbs said the U.S. has nothing to lose and a lot to gain in a free trade agreement with China.

China imposes a 10 percent tariff on most U.S. agricultural products, Hobbs said. The U.S., conversely, has a 3 percent tariff on most products from China.

"It is so low that it is inconsequential," Hobbs said of the tariff. "In reality, the U.S. is open to foreign competition."

City Shop has more than 15,000 items in its markets, and the majority of them are U.S. products, Zhou said.

Chinese consumers and U.S. expatriates, who fill the aisles at City Shop, are willing to pay prices like $14 for a 12.25-ounce box of Honey Nut Cheerios; $8 for a package of 9.5 ounces of Lundberg rice cakes from California; $13 for a 13-ounce box of Quaker Instant Oatmeal; and $8.50 for a 32-ounce box of Pacific Foods chicken broth.

City Shop stores sell one container load, or 40,000 pounds, of chips from the U.S, every month, Zhou said. The chain store sells 10,000 pounds of Pepperidge Farm cookies every month.

A 12-ounce bag of frozen blueberries sells for 86 yuan, or about $13.

Eliminate the tariff, Hobbs said, and Chinese consumption of U.S. products could see a dramatic increase.

 

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