United States, China sign historic trade deal

U.S. President Donald Trump and Chinese Vice Premier Liu He signed the phase one of the trade agreement ending an almost two-year trade war between the world's two giant economies. Signed on 15 January in the United States, the historic agreement will begin to rebalance the United States' vital trade partnership with China to benefit both countries, according to the statement from the White House.

 

In the trade deal, China has agreed to make significant structural reforms in a wide range of critical areas and will address numerous longstanding intellectual property concerns in the areas of trade secrets, trademarks, enforcement against pirated and counterfeit goods, and more. The country also agreed to strong commitments on currency practices regarding currency devaluations and exchange rates.

 

The agreement further addresses a wide range of trade and investment barriers that have prevented American financial services companies from being able to compete in China. In the area of trade, it addresses structural barriers that have unfairly limited United States food and agricultural exports and includes provisions in which China will accept U.S. agricultural biotechnology products.

 

The deal will help level the playing field for America’s innovators to compete in the China market. For the first time in any trade agreement, China agreed to end its practice of forcing foreign companies to transfer their technology to Chinese companies in order to gain market access. 

 

Importantly, the reforms cited in the agreement are fully enforceable and include a strong dispute resolution system to ensure effective implementation and enforcement.

 

 

Rebalancing trade relationship 

The U.S.-China trade deal will begin rebalancing trade relationship between the two countries. As a part of the new agreement, China has pledged to increase imports of U.S. goods and services by at least $200 billion. China’s increase in United States imports will take place over the next 2 years, and the trajectory is expected to continue even after 2021. China commits to purchase between $40 and $50 billion in American agricultural goods each year for 2 years.  

 

The signing of the U.S.-China phase one trade agreement was lauded by the leading plastics industry group in the U.S., the Plastics Industry Association (PLASTICS). As PLASTICS President & CEO Tony Radoszewski puts it: “This agreement is a step in the right direction, and we hope it paves the way forward for a reduction, or elimination, in tariffs, an increase in market access, and a less adversarial relationship between the world’s two largest economies. The plastics industry is an important driver of global growth and it relies on free, stable trade relationships in order to innovate and employ more workers. We look forward to further negotiations that level the playing field for U.S. plastics companies to compete in global trade.”