The US on Wednesday, 15 Jan, signed the first phase
of a trade deal with China, which President Donald Trump described as historic,
concluding more than a year of tough negotiations including several months of
suspension of talks between the two largest economies of the world.
Agreement signed by President
Trump and Chinese Vice Premier Liu He, Politburo Member and Vice Premier of the
People's Republic of China; ‘writing the wrongs of the past’ says President
The first phase of the trade
deal includes Intellection Property (IP) Protection and Enforcement, ending
forced technology transfer, dramatic expansion of American agriculture,
removing barriers to American financial services, ending currency manipulation,
rebalancing the US-China trade relationship and effective dispute resolution.
The agreement was signed by President Trump and Chinese Vice Premier Liu He,
Politburo Member and Vice Premier of the People's Republic of China. In his
remarks, Trump called the trade agreement signing "a momentous step... to
a future of fair and reciprocal trade." The two countries are
"writing the wrongs of the past," the US President said, adding that
he would soon visit China and thanked his Chinese counterpart for this deal.
phase one deal was good for China and the US says Chinese President in a letter
"I'll be going over to China
in the not-too-distant future to reciprocate," he said. This is a
transformative deal that will bring great benefits for the two countries, Trump
said, hoping that this will even lead to a peaceful world. Trump said that
China has made substantial and enforceable commitment to protecting American
ideas. At the same time, he said, punitive tariffs on China would remain in
place till the time the second phase of the trade deal is agreed. Chinese
President Xi Jinping, in his letter to Trump which was read out at the signing
ceremony in the White House, said the phase one deal was good for China and the
US and it needed to be earnestly implemented by both sides.
not in conflict with any third party interests and in accordance with WTO rules
In an apparent reference to
Trump's crackdown on China's telecom giant Huawei, Xi hoped that Chinese
companies will be treated fairly by the US. Chinese Vice Premier Liu said China
and the US, the world's two largest economies and two major players in
international affairs with great responsibilities, reached the phase one deal
"with the big picture in mind" and by "acknowledging and
properly managing" their differences. China will work with the United
States on the principle of equality and mutual respect to ensure good
implementation of their phase-one economic and trade agreement, he said. He
added that the deal is not in conflict with the legitimate rights and interests
of any third party, and is also in accordance with World Trade Organization
(WTO) rules. Calling economic and trade cooperation "the propeller of the
overall bilateral relationship", Liu noted the two countries have
encountered some difficulties in economic and trade areas over the past two
Several setbacks in
negotiations yet not overwhelmed by difficulties said Liu
"There have been several
setbacks in negotiations, but we were not overwhelmed by difficulties,"
Liu said. After continuous efforts by both teams, China and the US reached the
phase one deal based on the principle of equality and mutual respect, which
illustrated a Chinese saying "There are always more solution than
problems". The world's two largest economies have spent 18 months
embroiled in a bitter trade dispute that imposed tit-for-tat levies on each
other's commodities, mechanical parts and finished goods. Trump had launched
the trade war with China in 2018 demanding Beijing to reduce massive trade
deficit. His demands included an intrusive verification mechanism to supervise
Beijing's promise to protect intellectual property rights (IPR) technology
transfer and more access to American goods to Chinese markets.
Both sides so far have imposed additional tariffs on nearly USD
half trillion worth of goods. So far, the US has imposed tariffs on more than
USD 360 billion of Chinese goods, and China has retaliated with tariffs on more
than USD 110 billion of US products. State-run Global Times reported that among
the key takeaways from the agreement was China's pledge to increase purchases
of US products over the next two years and the US commitment to roll back
tariffs in phases on Chinese goods. Hong Kong-based South China Morning Post
reported that under the deal China has committed to buy 200 billion worth of
goods from the US in the next two years.
Areas covered in the agreement
The agreement also covered
areas of disputes between Chinese and the US officials including the protection
of intellectual property rights, technology transfer and an implementation
review mechanism. The signing of the deal presented a stark contrast to the
tremendous hostility and brinkmanship between the two countries of the past 660
or so days and the theatrical back-and-forth in negotiations, including 13
high-level rounds, the Global Times report said. Commenting on the deal, Einar
Tangen Beijing based current affairs commentator said that Wednesday's deal is
more of a trade truce and much of the promises made by China to purchase US
goods cannot be enforced.
The agreement, a boon for the
world said former Chinese vice commerce minister
"The overall signal from
the phase one agreement is much larger than the content of the deal
itself," Wei Jianguo, a former Chinese vice commerce minister, told the
Global Times. "It is a boon for the world that the world's largest and
second-largest economies have hit the pause key in the trade war".
"The phase one deal means that China and the US have entered a new
relatively predictable cycle," Li Yong, a deputy chairman of the expert
committee of the China Association of International Trade, told the Daily.
"It will be able to help revitalise the global value chain disrupted by
the trade war and remedy at least some of loss".