A Fair Deal with China
By Governor Pete Ricketts
October 21, 2019
Governor’s official photo here.
Like many Nebraskans, I’d like to see the United States and China make progress on an agreement to remove barriers to trade. It’s important for the negotiations to result in a fair deal that puts American farmers and manufacturers on a level playing field when doing business in China.
Nebraska and China have shared an important trade relationship for many years. Over the years, China has been a major market for Nebraska’s agricultural products. In 2017, China purchased 46.9% of the soybeans exported from Nebraska and 81.6% of our sorghum exports. In addition, Chinese companies invest in our state. During my time in office, I have led two trade missions to China. I’ve also welcomed Chinese trade delegates here to Nebraska.
While China has been a significant buyer of Nebraska ag products in the past, the country has been an inconsistent trade partner. From 2012 to 2018, China’s annual imports from Nebraska fell by over $1 billion. President Xi Jinping aspires for his country to be the world’s second superpower by 2049. To achieve this goal, his government—the People’s Republic of China (PRC)—has a coordinated plan to dominate ten high-tech industries. In recent years, the PRC has engaged in cyberattacks, intellectual property theft, and espionage all with the aim of gaining the upper hand over the U.S. The PRC has stolen everything from trade secrets to confidential military information to university research. In August, the U.S. Treasury Department declared that China’s government has also been manipulating currency values to gain an unfair economic edge. The PRC’s economic aggression has undeniably benefited Chinese companies. For example, in 2000 all five of the largest companies in the world were American. In 2019, three were state-owned Chinese companies, and only one was American.
We want to work with China to advance our shared economic interests. But it would be irresponsible to overlook the ways the PRC has seized unfair advantages. President Trump is right to stay focused on his goal of getting a trade deal with the Chinese government that protects intellectual property rights and ensures basic fairness.
The People’s Republic of China thinks in terms of decades and centuries. In America, we tend to think in terms of our two- and four-year election cycles. The PRC is playing the long game, gradually gaining economic leverage in the hopes of achieving strategic superiority. It’s critically important that we do not sacrifice long-term security for short-term economic relief. Any deal we make will require extended negotiations and proper enforcement to ensure the Chinese government follows the established rules of international commerce.
On October 11th, President Trump announced a phase one agreement with China as part of ongoing trade negotiations. As part of the trade deal, China would purchase between $40 and $50 billion of U.S. agricultural products. The agreement also addresses U.S. concerns about the PRC’s theft of intellectual property. The agreement is currently being written, and—when finalized—will mark an important step forward.
But even with this recent development, our relationship with China calls for a healthy measure of prudence. China’s one-party system of communist rule has a track record of persecuting ethnic and religious minorities and of suppressing political dissent. For example, the PRC’s ongoing authoritarian crackdown on protestors in Hong Kong has even had a chilling effect on free speech here in America. After Houston Rockets General Manager Daryl Morey tweeted support for Hong Kong’s protestors, the Chinese government asked NBA Commissioner Adam Silver to fire Morey. Later, the PRC threatened Silver with “retribution” when he made this request publicly known. This is deeply troubling. America’s government and people have a duty to promote freedom of speech and freedom of religion around the world. As we work on trade issues, we must also pressure the Chinese government to respect basic human rights. The passage of legislation by Congress last week to support Hong Kong is an important step towards this goal.
We’re not sitting on our hands, hoping for fast resolution to all of our trade issues with China. Instead, we’re working tirelessly to grow Nebraska by diversifying our export markets—especially in Asia. In January, Congressman Bacon and I met with trade ministers from Indonesia, the world’s fourth largest country, and they agreed to buy more Nebraska soybeans. In July, I met with a trade delegation from the Philippines interested in purchasing Nebraska-grown wheat. In September, I conducted a trade mission to Japan and Vietnam to explore new opportunities to export Nebraska beef, ethanol, and other goods. Last month, I also sat down with leaders from Taiwan. Together, we signed letters of intent that outline Taiwan’s agreement to buy more than $2.1 billion in U.S. soybeans, corn, and distillers grains from now through 2021.
I believe that a more stable, certain trade relationship with China is possible. If Nebraska wants to see our exports to China increase over the long-run, however, it is important that President Trump takes the time to get this deal done the right way. We will continue to patiently support the President’s negotiations and diversify our export markets to strengthen his negotiating position. If you have questions about how international trade affects Nebraska, I hope you will contact me at email@example.com or by calling 402-471-2244.
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