Ustr Phase One Agreement
The dependence of the Phase One deal on massive purchase commitments from China could be its biggest mistake. These commitments often generate press releases about the big sales that are coming, but the deal has not done enough for what was really needed: lower tariffs and other trade barriers to allow producers to compete with the Chinese market. If trade liberalization had been at the centre of the agreement and not just the small part that was, the long-term results might have been better. Many of the agreements, including jd.com`s, were non-binding memoranda and not legally enforceable contracts. As part of its deal, JD.com has pledged to import a total of $200 million of Montana beef by Montana Stockgrowers Association (MSGA) companies for online sales to Chinese consumers. The United States and China have reached a historic and enforceable agreement on a phase one agreement that will require structural reforms and other changes to China`s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, currency and currency. The Phase 1 agreement also includes China`s commitment to make significant additional purchases of U.S. goods and services in the coming years. It is important that the agreement creates a strong dispute settlement system that ensures swift and effective implementation and enforcement.
The United States has agreed to substantially amend its Section 301 tariff measures. „This Phase 1 deal from China is proof that President Trump`s negotiating strategy is working. While China has been slow to realize that President Trump is serious, this deal is a great success for the entire economy. This agreement finally creates a level playing field for the United States. Agriculture and agriculture is a bonanza for American farmers, ranchers and producers,“ said sonny Perdue, U.S. Secretary of Agriculture. The opportunity to participate in this market in a fairer and more equitable way has more sales that support higher prices and strengthen the rural economy. The agreement prohibits coercing or pressuring foreign companies to pass on their technology as a precondition for market access, administrative authorizations or obtaining benefits. The agreement also requires that any transfer or licensing of technology be based on market conditions that are voluntary and reflect mutual agreement. Despite a recent report from the Trump administration suggesting something else, U.S. agricultural exports to China have yet to keep up with the commitments of Phase One. Although better than manufacturing, it took until September for agricultural exports to return to their pre-trade war levels. In September, they were only 65% of their seasonally adjusted targets.
It may also be important to consider the difference between „exports“ and „sales“. The report states that beef „exports“ increased by 118 percent compared to 2019. He then notes that in 2020, „cumulative beef sales to China were more than 25 times higher than those accumulated during the same period in 2017.“ But sales are not necessarily the same as exports, because purchase obligations do not always pass.