Donald Trump (President of the United States) and Chinese Vice Premier Liu He signed today the first tranche of the agreement that will end US-China trade war.
As a part of the new agreement, China has pledged to increase imports of American goods and services by at least $200 Bn and for the first time ever in any trade treaty the PRC agreed to end its practice of forcing foreign companies to transfer their technology to Chinese companies in order to gain market access.
China’s increase in United States imports will take place over the next 2 years, and the trajectory is expected to continue even after 2021.
Under this deal The Asian Country will be making purchases of United States manufactured goods, energy, services and agricultural products. In this latest chapter, China has agreed to purchase between $40 and $50 Bn in American agricultural goods each year for two years.
President Trum underscored on this point: “So we have $50 million for — $50Bn for energy, $50 Bn for agriculture, and $40- to $50 Bn on services, including, Rob, financial services.”…”This deal, again, they thought it was a 50 Bn-dollar agricultural deal. Now it’s much more than $200 Bn, of which 50 is agricultural. But the rest is in all of the other things that we just discussed, especially for financial.”
The PRC will remove as well structural barriers for US food and agricultural exports, for example, the Asian country accepting United States agricultural biotechnology products.
China has also agreed to address numerous longstanding intellectual property concerns in the areas of trade secrets, trademarks, enforcement against pirated and counterfeit goods.
The document includes as well strong commitments by the PRC on currency practices regarding currency devaluations and exchange rates as well as the withdraw of a wide range of trade and investment barriers that have prevented American financial services companies from being able to compete in China.
Anticipating the signing of this trade pact, the US Government removed the PRC from the list of currency manipulator countries on 13th January.
While import duties imposed by the USA are still to remain there will be lifted as soon as the PRC inks the 2nd phase trade agreement. President Trump pointed on the issue: “Duties rebate by the USA will come after signing the second tranche of the comprehensive trade deal.”…”We’re leaving tariffs on, which people are shocked, but it’s great. But I will agree to take those tariffs off, if we are able to do phase two. In other words, we’re negotiating with the tariffs. We have 25 percent on $250 billion worth of goods. And then we’re bringing the 10 percent down to 7.5 percent on $300 Bn worth of goods plus.”…”So, but I’m leaving them on, because otherwise we have no cards to negotiate with. And negotiating with Liu is very tough. But they will all come off as soon as we finish phase two, ”
Liu He (PRC Vice Premier) read a message from Xi Jinping (President of the PRC) to President Trump saying : “To maintain healthy and steady growth of China-U.S. relations serves the interest of both countries and requires joint efforts from both sides.
“In that spirit, I hope the U.S. side will treat fairly Chinese companies and their regular trade and investment activities, and give support to the collaboration between enterprises, research institutes, and schools and colleges of the two countries as it will help enhance mutual trust and cooperation between us.
“China is prepared to work with the U.S. in that direction. And I will stay in close touch with you personally. “I believe that under our guidance, China-U.S. relations will deliver more results and bring greater benefits to our peoples in the year ahead…”
This trade agreement will enter into force 30 days after the date it was signed.
Donald Trump referred as well to the new system to solve conflicts as an advance never achieved in a negotiation with the PRC, but the truth is that this bilateral instrument to solve Appeals provides the weapon to unilaterally solve the pact if the complained party finds the Appeal has been issued in bad faith and there are no impartial 3rd parties deciding on the complaints as it is not an arbitration, but a bilateral way to solve claims.
Image over the headline.- Donald Trump (President of the United States) and Chinese Vice Premier Liu He show the trade agreement once signed at The White House on 15th January 2020. Photo The White House.
Related Eastwind links (Spanish edition):
EEUU y China podrían firmar una cuerdo comercial de hoy en cinco semanas
(USA and China may be signing a trade agreement within nex 5 weeks)
Related Eastwind links (English edition):
IMF’s Lagarde: US-China trade war puts at risk a 0.8% of global growth
Who is paining or gainig in US – China trade war?. We all will lose, UNCTAD report shows
Escalation in trade and tech tensions main downside risks for global growth, IMF Gopinath warns
Related external links:
The first phase of the US-PRC trade deal singned on 15th January 2020
