There is word that China will announce in the near future that it will begin to import beef from the United States once again. China is currently the world’s largest meat consumer, which speaks to the lucrative nature of this decision for the U.S. The Chinese stopped importing U.S. beef because of the mad cow disease outbreak., mSpecifically,; they stopped importing beef when one cow in the state of Washington was diagnosed with bovine spongiform encephalopathy (BSE). Moreover Furthermore, the retail prices of beef in China have surged 95 percent since 2011, which also makes our relative price very attractive.
According to Bloomberg, “Vice Minister Niu Dun said in December that China is seeking an agreement by July to resume U.S. beef shipments.” Brett Stuart, a researcher at Global AgriTrends, believes that despite their high demand for beef, the agreement of the terms of trade in regards to price and quantity will have a significant lag time. The U.S. beef-export quantity will probably decline by 3 percent this year, as the shipment value and prices for beef and cattle rise to an all-time high.
In sum, the Chinese are interested in engaging in international trade as our absolute advantage in beef would decrease their relative price and suffice their high demand due to their immense population. I believe the U.S. should implement stronger policies to expedite this trade, as many U.S. farmers’ income would rise according to the Stolper-Samuelson theorem.
I absolutely agree when you say the US should implement stronger policies to expedite this trade. Not only will this increase the farmers income, which is a good thing, but it will give a boost to the overall economy. China is a market that we haven’t been able to reach nearly as affectively as we should, and in beef we haven’t been able to reach them at all. As the largest consumer of beef in the world, China’s consumption of US beef will no doubt help the economy.
I agree that resuming beef exports with China will help boost the US economy. However, we have to consider that the US can start exporting the best products to China, leaving the US population with leftovers. Argentina is going through a similar phase with the US. Since it is more profitable to export meat rather than selling it in the Argentine market, many butchers choose to export their products, thus, leaving Argentina with the worst quality and lower quantity.
It is not always the case that the Americans get the “leftovers.” The U.S. has its own rules and standards for what their consumers will eat and the Chinese government also has its own rules for Chinese consumers. It is possible that both of the countries’ consumers get the same quality of the meat.
I also agree with the idea that resuming the beef trade with China will boost the U.S. economy. However, it will take a long time to make it happen. The lower price offered by the U.S. farmers will make the American beef more attractive to the consumers in China. However, this will heavily affect the income of the Chinese farmers. We have to think about their situations too.
How large are potential beef exports relative to the US economy? – I think if you look at trade numbers, or stats from the Dept of Agriculture, you’ll find that it is a fraction of 1%. Not a big deal. Furthermore, what happens to beef prices in the US if China begins importing more? For the average American, is it even a good deal?