The U.S.-China bilateral trade relationship has been front and center this year. This week, U.S. Wheat Associates (USW) weighed in as part of an investigation looking into China’s commitments under the Phase One Agreement.

Signed in January 2020, the Phase One Agreement between the United States and China provided needed stability in the bilateral relationship. Importantly for the U.S. wheat industry, the agreement included provisions to hold China accountable for violations to its World Trade Organization (WTO) obligations regarding administration of its tariff rate quota (TRQ) system and its market price support policies. Nearly six years on, the U.S. Trade Representative (USTR) is investigating these and other commitments, and USW recently submitted comments as part of that investigation.

Since the agreement was put in place in 2020, and following a related WTO case that found China violated it WTO obligations for quotas and market support, U.S. wheat trade flows to China have improved. China’s use of its import quota for wheat has grown to average more than 100 percent. This is notable progress for a market that long-favored domestic consumption over imports. However, more work needs to be done to improve transparency in their quota administration, enhance the private sector’s access to imports and address high market support prices and WTO reporting.

China has the potential to rank as a top-five market for U.S. wheat, with imports of U.S. wheat in recent years reaching more than 74 million bushels (2 million metric tons). As the bilateral relationship evolves and USTR advances its investigation, USW will look for more opportunities to improve ties, expand China’s market potential and hold China accountable for its trade obligations.

Read USW’s full comments here.