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Trade accord should provide boost to US West Coast ports

By LIU YINMENG in Los Angeles | China Daily Global | Updated: 2020-01-16 23:59

Officials at US West Coast ports, some of which have experienced significant cargo losses, were cautiously optimistic as China and the US on Wednesday signed the first part of a hard-fought trade deal.

"We have yet to see any details about the phase one deal, but we do know that cargo volumes will not return in the short run," said Gene Seroka, executive director of the Port of Los Angeles, which has watched traffic drop for more than year.

"We've experienced 14 consecutive months of declining exports, and China has developed new trading partners. With imports, the migration of manufacturing to Southeast Asia is real, and we are seeing the effects to global trade flows," Seroka said. "All of this may be the new normal. The global trade and business community need a sense of certainty so that we can execute our plans."

US President Donald Trump and Chinese Vice-Premier Liu He signed the trade deal at the White House, providing a respite to 18 months of trade skirmishes between the world's two largest economies.

The Port of Los Angeles, which called China a leading trade partner, reported that it moved 8.59 million TEUs (20-foot equivalent units) of cargo last year through November, which was about a half-percent better than 2018.

The port will reveal its December trade volume Thursday, but that number is expected to fall slightly below the 2018 figure, which was 9.4 million in cargo volume.

"We applaud this phase one deal, with an ultimate objective of lifting all of the restrictions on trade that have impacted the budgets of American families and businesses," said Port of Long Beach Executive Director Mario Cordero.

"Specifically for this gateway, the pledge by China to buy more agricultural goods is a big deal for California's farmers, who saw their buyers of almonds, pistachios, dairy products, wine and other goods dry up in the trade war," he added.                       

China accounts for more than half of the trade moving through the Port of Long Beach.

Imports from China at the port were down 18.6 percent during the first three quarters of 2019, compared with the same period in 2018. Exports to China fell 31 percent for the first three quarters of last year, compared with 2018.

At the Port of Oakland, where goods from China made up 30 to 40 percent of its total cargo volume, officials said they were gratified to see the initial agreement between the US and China and are hopeful that the development will result in an increase in global trade.

"The agreement is long overdue. The deal holds promise for our customers at the Port of Oakland, because it calls for significant increases in China's purchase of US farm goods, and since Oakland is one of the nation's principal agricultural export gateways, we expect the exporters who ship through Oakland are going to benefit," said Mike Zampa, communications director at the Port of Oakland.

"So, we are pleased with all of that, however, there's more work to be done. Most tariffs will remain in place, so we encourage both sides, the US and China, to resume negotiation and break down the remaining trade barriers," he continued.

California is the largest exporter to China of any US state. Imports from the country at the San Pedro Bay complex, which includes the Port of Los Angeles and Long Beach, fell 9.6 percent during the first half of 2019, compared with the same period in 2018, while exports to China declined 22 percent.

The trade dispute has had a sizable impact on the sales of certain commodities to China. The bay complex exported 96.6 percent fewer soybeans and 73.9 percent fewer grains to China.

Wheat exports to China, grown across 10 states from the Pacific Northwest to the Midwest and exported via Washington and Oregon ports on the Columbia River, nearly ceased last year. 

"We are pleased that this agreement puts a hold on the increasing tariffs and retaliatory tariffs between the United States and China and hopeful that this initial agreement results in additional reductions in tariffs over the coming months," said Peter McGraw, media officer at the Port of Seattle.

"We believe that productive engagement and negotiation is the best way to address barriers to a fair and level playing field for trade between our two countries," he added.

China is the top trading partner to the Port of Seattle in terms of imports and exports.

As of November 2019, exports to China from the Northwest Seaport Alliance, a marine cargo operating partnership between the ports of Seattle and Tacoma, plunged 5 percent year-over-year by dollar value, while imports from China dropped 19 percent.

Similarly, Seattle-Tacoma International Airport imports from China are down 44 percent year-over-year by dollar value as of November 2019.

In September last year, the six largest West Coast ports — the Port of Los Angeles, Port of Long Beach, Port of Oakland, ports of Seattle and Tacoma, and the Port of Portland, jointly appealed to the Trump administration in a letter warning that the escalating trade conflict between the two countries "will create irredeemable economic harm".

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