INSUBCONTINENT EXCLUSIVE:
By Jenny LeonardThe US and China announced Friday that they reached a phase-one trade deal but provided little detail on what exactly will
be part of the agreement.
US Trade Representative Robert Lighthizer brought a print-out of the 86-page agreement to a briefing with
reporters Friday afternoon as a “show-and-tell” to prove that it’s all done and written up
Lighthizer said it’s an important step forward for the two countries while acknowledging that a lot of big issues are outstanding and need
to be addressed in future negotiations.
Here’s what we do and don’t know:TariffsAs part of the deal, the US will halve its 15 per cent
tariff on about $120 billion in Chinese goods
It will also suspend indefinitely planned duties that were set to take effect on Sunday that would have covered consumer favorites such as
That leaves roughly $250 billion taxed at 25 per cent and $120 billion that will be subject to a 7.5 per cent duty once the agreement takes
Any further tariff reductions by the US will be linked to the conclusion of future phases, Lighthizer said.
China, on the other hand,
didn’t agree to specific tariff reductions in the deal
Instead, the nation’s obligation is to make the purchases and to have an exclusion process for its tariffs
The country has in recent months lowered some retaliatory tariffs including some on cars imported from the US
PurchasesA USTR fact sheet
refers to this part of the deal as the Expanding Trade chapter
According to the US , China has agreed to increase its total purchases of US goods and services by at least $200 billion over the next two
Also included is a commitment by China to increase its buying of US agricultural products to $40 billion to 50 billion in each of the next
Lighthizer told reporters “these are numbers that are realistic and that we arrived at together.” The specific breakdown of targets for
individual commodities will be classified and not disclosed to the public.
IP, Forced Tech TransferThe deal will center around what a senior
administration official called “state-of-the-art” IP commitments and a breakthrough on forced technology transfer
Those issues are also at the heart of an investigation that led President Donald Trump to raise tariffs on China in the first place.
Among
the specific commitments, USTR announced Friday: China has agreed to end its long-standing practice of forcing or pressuring foreign
companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or
receiving advantages from the government
China also commits to provide transparency, fairness, and due process in administrative proceedings and to have technology transfer and
licensing take place on market terms.
EnforcementThe agreement will include a dispute-resolution mechanism that will serve as the
That process is in line with how other US trade agreements are enforced
Complaints of one party will be brought to a US -China working group and if officials can’t resolve their dispute, a decision will be made
at the ministerial level of what action to take
That action could include tariffs or other measures, Lighthizer said, though he sounded optimistic that he thinks China will keep their
promises.
What Comes Next?Lawyers are now reviewing the text so that it’s ready to be signed in the first week of January
It’s also being translated
Lighthizer and his counterpart Vice Premier Liu He will likely do the signing in Washington
Once it’s inked, the deal will take effect roughly 30 days later.
Phase Two?The president announced Friday that negotiations for the next
phase would start immediately, though his trade chief said no date for future talks had been set
The first phase leaves contentious issues unresolved, including US demands that China curb subsidies to state-owned firms
The US says future talks will also focus on digital trade, data localization, cross-border data flows and cyber intrusions.