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. As part of the Phase 1 deal, Beijing has promised to reduce its trade surplus with the United States by buying more U.S. agricultural goods. Larry Kudlow, Trump`s economic adviser, told reporters last week that the White House was pleased with the purchases made so far by Beijing. The government acknowledges that the agreement does not leave an answer to some U.S. complaints, including how the Chinese government subsidizes its companies. This is the concern that was expressed when Trump unleashed a trade war in July 2018 by imposing tariffs on Chinese imports. In a statement from the office of the U.S.
Trade Representative, officials said the call “discusses steps China is taking to make structural changes,” including better protection of intellectual property rights and fair market access for U.S. companies. “Both sides see progress and pledge to take the necessary steps to ensure the success of the agreement,” the statement concluded. “We are marking more than an agreement. We are marking a change in international trade,” Trump said at a sprawling ceremony in which he referred to former FBI Director James Comey, impeachment proceedings and a possible visit to Mount Rushmore on July 4 for a fireworks display. Details of the basic approach to mapping the 2020 annual targets on trade data are available in Bown (2020). Additional assumptions made here include estimating for 15 distinct product categories, as the agreement contains only aggregate targets for the four manufacturing, agriculture, energy and services sectors. The approach is to allocate targets at the product level based on the share of that product in overall U.S. exports to China in 2017 of the goods covered by the purchase obligations. See also the table below.
The U.S. and China need to renegotiate important policies that are not affected by the Phase One agreement. Trump`s trade war has failed to address what was really shaking the U.S.-China trade relationship. It is time for a new approach. The Phase 1 agreement does not cover nearly 30% of the products that the United States exports to China. Not surprisingly, in 2020, China`s imports of uncovered goods were even worse, 26% less than in 2017 (Figure 1, panel c). On the other hand, China`s imports of uncovered products from the rest of the world increased by 3.4% (panel d). “The two sides had a constructive dialogue on strengthening the coordination of macroeconomic policies of the two countries and on the implementation of the `Phase 1` agreement,” the ministry said in a statement. 3.
You will find the basic methodological approach in the Annex. . . . .