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
, mpecifically ; they stopped importing beef when one cow in the state of Washington was diagnosed with bovine spongiform encephalopathy (BSE). Moreover , 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.