{"id":579,"date":"2019-12-14T15:10:13","date_gmt":"2019-12-14T07:10:13","guid":{"rendered":"http:\/\/www.hsflanges.com\/blog\/?p=579"},"modified":"2019-12-14T15:11:10","modified_gmt":"2019-12-14T07:11:10","slug":"heres-whats-in-whats-out-of-u-s-china-trade-deal","status":"publish","type":"post","link":"https:\/\/www.hsflanges.com\/blog\/heres-whats-in-whats-out-of-u-s-china-trade-deal\/","title":{"rendered":"Here\u2019s what\u2019s in, what\u2019s out of U.S.-China trade deal"},"content":{"rendered":"\n

The United States and China may have turned down the heat on their trade war on<\/a> Friday, but pressing pause on more tariffs is just the first step in ending a protracted dispute between the world\u2019s two largest economies.<\/p>\n\n\n\n

Officials from both countries provided details on how much in farm goods will be sold as well as some new rules on intellectual property.<\/p>\n\n\n\n

Story Continued Below<\/p>\n\n\n\n

What isn\u2019t in the 86-page agreement, which isn\u2019t yet public, is how China will curb subsidies or scale back support for its state-owned enterprises.<\/p>\n\n\n\n

Story Continued Below<\/p>\n\n\n\n

\u201cThere are still a lot of outstanding issues that you\u2019re all aware of between the United States and China which are very serious issues,\u201d U.S. Trade Representative Robert Lighthizer said in a briefing. \u201cOur sense is we\u2019re better off doing this in phases than to sit and make no progress at all.\u201d<\/p>\n\n\n\n

Here\u2019s what we know of what has been agreed to so far, and what discussions still have to take place:<\/p>\n\n\n\n

Some, not all, tariffs will be reduced.<\/h3>\n\n\n\n

President Donald Trump said he won\u2019t impose on Sunday a 15 percent tariff<\/a> on about $160 billion in Chinese imports, including consumer goods like smartphones and laptops.<\/p>\n\n\n\n

The United States will also cut duties imposed in September on a list of Chinese imports valued at about $120 billion. The rates will fall from 15 percent to 7.5 percent for items like jackets, gloves, footwear and flat panel electronic displays.<\/p>\n\n\n\n

Tariffs will stay at 25 percent tariff on $250 billion worth of imports. That will be leverage for extracting concessions from China in a second phase of talks, the president said.<\/p>\n\n\n\n

\u201cI think what China\u2019s expectation is, is you have future phases and future reductions,\u201d said Lighthizer.<\/p>\n\n\n\n

Trump\u2019s decision to cut the tariff rate was taken as a \u201cgesture of goodwill,\u201d outside adviser and China expert Michael Pillsbury told POLITICO on Thursday afternoon shortly after speaking to Trump.<\/p>\n\n\n\n

The U.S. also agreed to increase the number of tariff exceptions it will grant Chinese imports that are still subject to duties, said Liao Min, China\u2019s vice minister of finance. Liao said that China will also consider canceling another round of retaliatory tariffs on U.S. products that was set for Dec. 15.<\/p>\n\n\n\n

What we know about promises to farmers.<\/h3>\n\n\n\n

China will commit to buy at least $40 billion a year in U.S. agricultural goods.<\/p>\n\n\n\n

In 2017, China bought about $24 billion in farm products. That amount would provide a baseline, so the pledge would translate to a 66 percent increase or about $16 billion in additional agricultural exports each year.<\/p>\n\n\n\n

Story Continued Below<\/p>\n\n\n\n

Lighthizer said the \u201cgoal\u201d is for China to reach $50 billion worth of total purchases next year as well as in 2021.<\/p>\n\n\n\n

Soybeans, pork, poultry, corn, wheat and rice were staples that Chinese officials mentioned would get more imports. Lighthizer said the specific targets for each commodity won\u2019t be made public to avoid affecting commodity markets.<\/p>\n\n\n\n

\u201cThe import of agricultural products from the United States will not affect China\u2019s agricultural industry,\u201d said Han Jun, vice minister of agriculture.<\/p>\n\n\n\n

He added that imports of corn, wheat and rice will not exceed established quotas, and that the deal will provide gains for certain Chinese agricultural exports to the U.S. \u2014 specifically pears, citrus, dates and dairy products.<\/p>\n\n\n\n

Chinese officials made clear, however, that any purchases will be based on market demand and in line with China\u2019s commitments at the World Trade Organization.<\/p>\n\n\n\n

Ning Jizhe, vice chairman of China\u2019s National Development and Reform Commission, warned that expanding trade shouldn\u2019t jeopardize China\u2019s other trading partners.<\/p>\n\n\n\n

\u201cI need to stress here that larger trade cooperation must be based on market principles and WTO rules,\u201d he said at a press conference, adding that U.S. imports must meet Chinese standards on quality, price and regulatory requirements.<\/p>\n\n\n\n

A senior administration official, who briefed reporters on the condition he not be identified, said there were concrete agricultural purchases commitments, which are enforceable under the pact. He declined to speculate on why Beijing would not acknowledge that.<\/p>\n\n\n\n

Beijing has also agreed to address a number of longstanding non-tariff trade barriers to U.S. agricultural exports, Lighthizer said.<\/p>\n\n\n\n

\u201cSome of the areas on which there\u2019s a multitude of non-tariff barriers, some of the areas where those have been stripped away are beef, poultry, seafood, rice, dairy, infant formula, animal feed, feed additives, pet food and a variety of other agriculture biotechnology products,\u201d he said.<\/p>\n\n\n\n

Further details were not immediately available. U.S. farmers have been frustrated for years over Beijing\u2019s slow approval process for biotech crops, which prevents the sales of some varieties of crops like corn and soybeans planted in the United States.<\/p>\n\n\n\n

Expect U.S. to ship more oil and export more services.<\/h3>\n\n\n\n

China has committed to increase purchases of U.S. goods and services by about $200 billion within two years, Lighthizer said. That would help Trump\u2019s goal to whittle down the $420 billion trade deficit the U.S. has with China.<\/p>\n\n\n\n

\u201cWe have divided the U.S. exports into four categories: agricultural goods, manufactured goods, energy and services,\u201d Lighthizer said.<\/p>\n\n\n\n

A second U.S. official said the numbers would remain classified because of their potential to move markets and reveal of business proprietary information.<\/p>\n\n\n\n

Chinese officials didn\u2019t mention any specific targets but listed energy and manufactured goods as well as medical and financial services as areas of opportunity.<\/p>\n\n\n\n

\u201cIt is up to the business sector and the market to say whether it is a good agreement or not,\u201d said Liao, the vice minister of finance.<\/p>\n\n\n\n

Are we there yet on these matters?<\/h3>\n\n\n\n

The U.S. said it has promises to fix nettlesome business protections issues this time around. China said it agreed to enhance protection of intellectual property, like protecting of trade secrets, extending drug patents, combating piracy and counterfeiting on e-commerce platforms, and cracking down on bad-faith registration of trademarks.<\/p>\n\n\n\n

The agreement will also reflect China\u2019s efforts to establish punitive damages \u2014 both civil and criminal \u2014 for violations.<\/p>\n\n\n\n

Story Continued Below<\/p>\n\n\n\n

\u201cThe truth is for years China has been enhancing its protection of intellectual property and this is very much something that is needed on the part of China,\u201d said Wang Shouwen, China vice minister of commerce.<\/p>\n\n\n\n

But China\u2019s previous commitments on such issues have been criticized, and it\u2019s unclear which sanctions will work.<\/p>\n\n\n\n

Beijing also said it won\u2019t compel foreign companies to hand over technology to operate in the Chinese market. U.S. complaints on that issue formed one of the core reasons for launching the trade fight against Beijing in the first place.<\/p>\n\n\n\n

\u201cTo me it\u2019s an enormously important first step in our relationship,\u201d said Lighthizer, who added that a violation of the commitment would be subject to the agreement\u2019s enforcement mechanism and could result in tariffs being reapplied.<\/p>\n\n\n\n

The promise most likely reflects China\u2019s new foreign investment law, which has drawn criticism from U.S. business groups for not going far enough<\/a>.<\/p>\n\n\n\n

Chinese regulations that put the law into force continue to distinguish between foreign and domestic companies, which \u201cenables the establishment of de facto requirements and limitations for foreign investors,\u201d the business groups have noted.<\/p>\n\n\n\n

Whether Trump administration officials have finally brokered changes remains to be seen.POLITICO NEWSLETTERS<\/a><\/p>\n\n\n\n

Morning Trade<\/a><\/strong><\/h2>\n\n\n\n

A speed read on global trade news \u2014 weekday mornings, in your inbox.SIGN UP<\/p>\n\n\n\n

By signing up you agree to receive email newsletters or alerts from POLITICO. You can unsubscribe at any time. This site is protected by reCAPTCHA and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n\n\n\n

What about the money?<\/h3>\n\n\n\n

China and the United States also made certain commitments regarding the operations of their central banks in foreign exchange markets. They pledged not to engage allowing their currency values to fall so that goods are cheaper.<\/p>\n\n\n\n

A senior U.S. official said the currency rules would be enforceable, meaning that a violation could be punished with more tariffs.<\/p>\n\n\n\n

When talks were going badly with Beijing this summer, the Trump administration formally declared China a currency manipulator. That was the first time any administration had taken that step in nearly 30 years.<\/p>\n\n\n\n

However, many experts said at the time the move was unwarranted, even if China had unfairly devalued its currency in the past.<\/p>\n\n\n\n

There will be punishments.<\/h3>\n\n\n\n

The phase one deal will establish a dispute settlement process. Complaints can first be brought up before working-level officials and then elevated as high as the minister-level if they can\u2019t be resolved. The enforcement process would give Lighthizer the last say in whether China had violated the agreement.<\/p>\n\n\n\n

\u201cOur expectation is that if we take our actions in good faith throughout this process that either side, the United States or China, will be able to take appropriate action and the other won\u2019t be able to retaliate,\u201d Lighthizer said.<\/p>\n\n\n\n

What\u2019s left for the negotiating table in 2020.<\/h3>\n\n\n\n

Trump administration officials acknowledged reaching a \u201cphase two\u201d agreement with Beijing will require tackling many difficult issues. One is how to overcome China\u2019s requirement that American companies must store certain electronic business data in China, rather than outside the country, in order to operate there.<\/p>\n\n\n\n

An especially irksome issue will be dealing with China\u2019s billions of dollars’ worth of government subsidies that are bestowed on its state-owned enterprises. Chinese cyber intrusions into the United States have also been enormously difficult to curb, a senior U.S. official said.<\/p>\n\n\n\n

\u201cThere are important issues that we do expect to address moving forward,\u201d the official said. However, he declined to estimate what percentage of the United States\u2019 overall objectives still remain to be done.<\/p>\n","protected":false},"excerpt":{"rendered":"

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