White House announces “phase one” China deal
(Posted on 18/10/19)
The White House has announced a “phase one” agreement in principle with China. Under the tentative agreement for the first phase of a trade deal, China allegedly will commit to purchase $40 billion to $50 billion annually worth of U.S. agricultural products, increasing gradually to that level over a two-year period.
During a White House press conference, U.S. Trade Representative Robert Lighthizer also said that the agricultural agreement will “correct a variety of sanitary and phytosanitary and biotechnology issues,” although he provided no details on what had been agreed to in principle.
Details of all aspects of the phase one agreement are to be drafted and finalized over the next three to five weeks, with President Trump indicating it could be signed when he and Chinese President Xi Jinping are together in mid-November at the Asia-Pacific Economic Cooperation (APEC) meeting in Chile. Trump indicated the entirety of the agricultural negotiations had been completed and would be included in the phase one accord.
According to the administration, China also agreed to open its market to international financial services and said it would agree to improved protections for U.S. intellectual property. Treasury Secretary Steven Mnuchin also said an agreement on currency manipulation was “almost complete.” In addition, Mnuchin said “good progress” was made during this round of negotiations on restricting China’s practice of requiring U.S. companies to share technology with Chinese partners as a precondition for obtaining market access.
Meanwhile, Lighthizer said final details are being negotiated on a “very elaborate consultation process” that would be created to ensure compliance, indicating both sides are “very close” to creating a “workable dispute-settlement mechanism.”
For his part, Trump agreed to suspend a tariff increase to 30 percent from 25 percent on at least $250 billion in Chinese goods which were set to take effect on Oct. 15.
Existing U.S. and Chinese tariffs remain in place, and the United States did not agree to suspend or rescind the scheduled Dec. 15 imposition of tariffs on approximately $156 billion in Chinese imports – reasoning that further negotiations would occur in time to address those later.
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