U.s. And China Reach Phase One Trade Agreement
The National Retailers` Federation welcomed the signing of the first phase trade agreement and said that „much remains to be done to end the trade war between the two countries.“ China`s import request for agricultural products: the impact of the Phase 1 trade agreement Full text is available under ustr.gov/sites/default/files/files/agreements/phase an agreement/Economic_And_Trade_Agreement_Between_The_United_States_And_China_Text.pdf. The agreement includes monthly consultations at the USTR Level, quarterly consultations at the USTR/Vice-Minister Assistant Deputy Ministers level, and semi-annual consultations at the USTR/Vice Premier level to address implementation. It establishes a single dispute resolution procedure to allay fears of alleged breaches of certain obligations. The process involves consultations with designated officials that will be followed by an appeal trial to senior officials, including the USTR and a designated Chinese deputy premier. If the parties fail to agree on a solution, the aggrieved party may respond by increasing tariffs. The other party cannot take any retaliatory action unless it intends to proceed with the final stage of the denunciation of the agreement, which is authorized within 60 days. In December 2019, the United States and China agreed on a phase one agreement to end the trade war that began in early 2018. In that agreement, China committed to purchase an additional $200 million in U.S. imports covering manufacturing, agriculture, energy and services in 2020 and 2021 (Bown 2020).
While the Covid 19 pandemic in 2020 could undermine this agreement or, at the very least, delay its implementation, it is worth asking whether it is actually feasible. For agricultural goods, for example, the agreement calls for China to buy $12.5 billion more in imports in 2020 and $19.5 billion more in 2021 than in 2017. While China is one of the world`s largest importers of agricultural products, these figures are significantly higher than what China had previously imported from the United States. In total, China`s agricultural imports increased more than 12 times between 1997 and 2015 (Chart 1).