Phase 1 Agreement

House of Representatives spokeswoman Nancy Pelosi, D-Calif., said in a statement that “in the face of the loss of thousands of jobs in the processing industry and the country farm, ravaged by the damage caused by President Trump, Americans have no choice but a striking television ceremony to try to conceal the total lack of concrete progress, transparency or accountability in this “phase 1″ agreement.” In a breakthrough amid stalled bilateral relations, Chinese and U.S. trade chiefs held telephone conversations Tuesday to discuss the first phase of a trade deal. From the beginning, an additional $200 billion in sales to China were a worrying goal. Nearly 30% of U.S. merchandise exports to China are not even covered by the Phase One agreement. And for those who covered the agreement, a review of 15 product groups shows that their sales to China have been influenced by various factors, including plane crashes, epidemics of outbreaks, export controls, World Trade Organization (WTO) legal decisions, the lingering effects of trade war tariffs and the pandemic. Under the agreement, China has committed to purchase as much as $63.9 billion of U.S. covered goods by the end of 2020 compared to those basic plans for 2017. The definition of the baseline for 2017 based on Chinese import statistics implies a purchase target of $173.1 billion for 2020 (in red in panel a). The definition of the baseline for 2017 based on U.S. export statistics implies a target of $159.0 billion by 2020 (blue in panel a). U.S. Trade Representative Robert Lighthizer said work on the follow-up negotiations will depend on how China meets commitments made in the initial phase.

Details of the basic approach to mapping the 2020 annual targets for trade data are available in Bown (2020). Other hypotheses relate to the establishment of estimates for 15 different product categories, as the agreement provides only aggregate targets for the four sectors of manufacturing, agriculture, energy and services. The aim is to allocate product-level targets on the basis of the share of this product in all U.S. exports to China in 2017 of products covered by purchase obligations. See also the table below. The Phase 1 Economic and Trade Agreement contains a chapter on intellectual property that strengthens the protection and application of intellectual property in China. 2. On July 6, 2018, the Trump administration imposed its first tariffs on $34 billion worth of Chinese goods. China returned the favour at the same time. The two countries have imposed tariffs until September 2019, together covering more than $450 billion in bilateral trade.

The January 2020 agreement applies to U.S. exports of goods and services. Because detailed data on high-frequency trade for services are not available, these commitments are not assessed here. Although the agreement also sets targets for purchases of certain services negotiated by China from the United States, these data are not reported monthly and are not processed here. The agreement also contains targets for 2021, which are not presented here. Not only does not rely on purchasing objectives address China`s problematic policy, which harms Americans, but it also helps to consolidate government planning, contrary to market results. In particular, because China continues to impose discriminatory retaliatory duties on U.S. exporters, only its state-owned enterprises, not the Chinese private sector, will increase many purchases to meet their commitments, the opposite of what U.S. politicians say they want. The objectives of the agreement also send signals to America`s allies that the United States is primarily interested in China diverting imports from its suppliers, rather than attacking pre-state policies