Noah.

Last Thursday, the U.S. House Select Committee on the Chinese Communist Party hosted a roundtable in Dysart, Iowa to examine theft of U.S. agriculture technology. This is an important issue, and we applaud the members of this committee for taking the time to listen to farmers who have first-hand experience with these challenges.

As we consider Iowa and our country’s relationship with China in the context of food and agriculture, it is critical that we move strategically with a firm understanding of Iowa and America’s national interests. Over 95% of the world’s consumers live outside of the U.S. so we must secure and increase market access to other countries if we want to maintain and grow our farm economy.

In 1999, Congress voted to admit China into the World Trade Organization by granting China Permanent Normal Trade Relation (PNTR) status. Countries that trade with each other under permanent normal trade relations agree they will treat each other the same as they treat other countries who have been granted PNTR status. This allows countries to sell products to each other with lower import taxes called tariffs.

Admitting China into the WTO has paid dividends. In 2000, the United States sold just $1.73 billion of food and agricultural products to China. This constituted around 3% of our total, ranking China behind Canada, Mexico, the EU, Japan, and South Korea as buyers of our farm products.

In the past two decades, thanks to PNTR, U.S. export sales to China have skyrocketed. In 2022, the United States exported $38.11 billion in food and agricultural products to China – an astounding 22x increase. China is now the largest buyer of U.S. food and agricultural products, purchasing 19% of our exports. Most notably for Iowa, according to the Iowa Economic Development Authority, China is our top export market for Iowa corn. These exports are critical to Iowa and rural communities.

Selling nearly 20% of our exports to one country can also have downsides. When relations between our two countries sour, U.S. food and agriculture exports can be disrupted as they were during the 2018-2019 trade wars between the U.S. and China.

So how should we manage our relationship with China?

First, we need to be fair but firm. Theft of intellectual property and the use of unfair trade practices is unacceptable and we should vigorously contest such acts.

Second, we need to be deliberate and thoughtful. There are some who suggest the U.S. should revoke China’s PNTR status. Such a move would be disastrous for our exports and could cause an America farm crisis rivaling the 1980s. Recognizing China’s importance to rural America, we should avoid unnecessary actions that disrupt the stability of this trading relationship.

Finally, we need to diversify our export markets to other countries – especially in southeast Asia. There are two reasons for doing this. First, diversification helps manage risk. Increasing food and agriculture exports to other countries boosts our farm economy and lessens our dependence on China as a buyer of our products. Second, trading with other countries helps build our relationships with those countries lessening China’s global influence.

In 2017, the United States withdrew from the Trans-Pacific Partnership (TPP), a trade agreement that we had negotiated with eleven Pacific-rim countries. This agreement, which did not include China, was designed to create a regional economic trading block as a counterweight to China. The American Farm Bureau estimated that the TPP would have boosted U.S. farm revenue by $4 billion a year. After we withdrew, the eleven other countries, including Australia and Canada, moved forward together and now have preferential trade with each other while the U.S. stands on the sidelines.

The Biden Administration should be commended for pursuing the Indo-Pacific Economic framework (IPEF) which addresses some trade barriers in this region. However, IPEF does not lower tariffs and, without tariff reductions, many of our food and agriculture imports will continue to be more expensive than those of our competitors.

It has been over a decade since the United States entered into a new free trade agreement opening overseas markets to U.S. food and agriculture exports. During this same time, our friends and adversaries alike have been busy entering into free trade agreements from TPP, to the Regional Comprehensive Economic Partnership, to bilateral deals like the ones created just this year between Australia and the UK and between China and Ecuador.

The United States needs to move swiftly to enter into new free trade agreements with other countries especially in southeast Asia. Those bilateral trade agreements could be modeled on the U.S.-Canada-Mexico agreement negotiated by President Trump and passed by the Congress with broad bipartisan support. Such agreements could help open new export markets for our farmers and could help contain China’s growing geopolitical influence.

Even as we move to counter China’s unfair practices, we have to recognize that revoking China’s permanent normal trade relations status would be disastrous for U.S. agriculture. We also have to recognize that standing on the sidelines of international trade is eroding our global leadership and our long-term economic strength. If we lean into new trade agreements, we can strengthen our hand with China and help our farmers.

Steve Noah is President of Farmers for Free Trade, a U.S. non-profit that advocates for trade that benefits America’s farmers. Steve lives in Clive, Iowa.