Visitors learn about the guzheng, a traditional Chinese musical instrument, at a music trade show in California, the U.S., on January 16
Chinese Vice Premier Liu He, China's chief negotiator for the China-U.S. comprehensive economic dialogue, and U.S. President Donald Trump signed the phase-one economic and trade agreement in the East Room of the White House on January 15. It signaled that the nearly two-year China-U.S. trade friction started by the U.S. would abate, a significant step toward ending the trade war.
After 13 rounds of high-level economic and trade consultations spanning 23 months, the deal was a hard-won achievement. During the signing ceremony, Liu said the agreement is good for China, the U.S. and the world at large.
Although the two sides showed willingness to sign an agreement in May 2019, no results were reached since the U.S. went back on its word. After more than half a year, the two sides finally came back to the table and reached the agreement, keeping each other's concerns in mind.
China's three core concerns were that all additional U.S. tariffs should be revoked, the amount of Chinese purchases determined should be realistic, and the wording of the agreement should be balanced. It also insisted that the text follow World Trade Organization (WTO) rules and market rules.
The nine chapters of the agreement also cover all the concerns the U.S. raised when it launched the trade war. The Chinese side offered direct responses to these concerns and consensus was finally reached in a balanced agreement that shows mutual respect and equality.
The phase-one agreement will promote China-U.S. win-win cooperation within economic globalization. Since the establishment of bilateral relations 41 years ago, economic and trade exchanges between China and the U.S. have developed, with the two countries becoming deeply integrated. The two economies are highly complementary in various areas. However, the trade friction dented the economic and trade ties.
In 2018, the U.S. was China's second largest trading partner, but it slipped to third in 2019. After signing the deal, China will ramp up imports of U.S. energy and agricultural products and financial services, while the barriers blocking China's exports to the U.S. will be reduced. This is expected to bring a rebound in bilateral trade.
For example, the agreement touches upon dairy products, poultry, beef, pork, processed meat, aquatic products and fruit, all widely needed to upgrade Chinese consumption. A rally of U.S. agricultural imports will further highlight the importance of agriculture in China-U.S. economic and trade relations. China is the world's largest agricultural importer, while the U.S. is the largest exporter of farm produce. Closer cooperation in the agricultural sector illustrates the mutually beneficial nature of bilateral economic ties.
The trade deal will help strengthen economic and trade integration between China and the U.S. On the whole, the provisions in the agreement are compatible with the goals of China's reform and opening up. As a matter of fact, China began to implement parts of the agreement even before the deal in accordance with its own pace of development.
According to the agreement, the two sides will strengthen cooperation on the basis of WTO rules and market rules. U.S. concerns will be resolved during the implementation of the agreement, while China will gain more driving force to deepen its reform and opening up. In the future, along with the manufacturing sector, where the two sides already have in-depth cooperation, there will also be more cooperation and integration in areas like finance, energy, agriculture and intellectual property rights protection.
However, this agreement alone will not eradicate the fundamental problems embedded in China-U.S. trade relations. Particularly, the politicization of trade by some in the U.S. amplifies the difficulties, while the delaying of a final settlement will only intensify disputes. Nevertheless, China believes that solutions always outnumber problems and that by fighting, the two countries have everything to lose and nothing to gain, which is repeatedly proven by history and reality. It is something that the two sides must keep in mind while tackling the issues. The spirit of cooperation will never fail to offer a way out.
Frequent black swan and gray rhino events have wreaked havoc on the global economy. China and the U.S. are the two leading economies in the world, and stable economic and trade relations between them serve as an anchor for global economic stability. Both are obligated to maintain this stability. The inking of the phase-one trade deal demonstrates that both sides are able to tackle economic and trade spats through negotiations on an equal footing, further boosting the world's confidence in a final settlement between them. This confidence is expected to extend into the phase-two trade negotiations in the near future.
U.S. Sectors Pleased With Trade Deal
Representatives from a variety of U.S. sectors said they are pleased by the phase-one economic and trade agreement between China and the United States, and are looking forward to further removal of additional tariffs imposed since 2018.
The trade agreement "is going to be encouraging certainly for agriculture in the United States," 70-year-old farmer Joe Boddiford said.
Boddiford, who has worked for 45 years on his 971-hectare farm in Sylvania, Georgia, said farmers are "fairly optimistic" about the prospect of U.S.-China agricultural trade. He added that they generally believe that a deal between the world's top two economies to resolve their trade disputes "is the only thing to help with the situation" that U.S. farmers are in.
"We're all looking for a bright future out there because we faced the most negative stuff in the last couple of years," he said.
Gary Adams, President and CEO of Cordova, Tennessee-based National Cotton Council, said people in the U.S. cotton industry are glad to see the country reach the phase-one trade deal with China.
"The trade dispute between the two countries has certainly had a significant impact on the U.S. cotton prices and U.S. export sales to China," Adams said. "So overall, we are certainly pleased to see the agreement come into place."
The signing of the deal was "clearly something that the market has been anticipating and has been waiting for," Adams said.
Adams said the National Cotton Council is "certainly hopeful" that the phase-one deal "will lead to a stronger trading relationship between the two countries," adding that his organization sees "a lot of potential there for beneficial bilateral trade between the two countries."
Besides the agriculture sector, U.S. shoemaker Allbirds Inc., among other enterprises, has also welcomed the signing of the trade deal.
"We're obviously happy about it," if the deal rolls down tariffs on goods exported from China to the United States, Eric Haskell, head of international operation with the company, said.
Haskell said the exports of Allbirds' shoes from China have been impacted by tariffs imposed by the United States.
"In general, we of course prefer trade barriers to be low. We believe in free trade and because we are good business, it's important that we can move products freely around the world," said Haskell.
Talking about the trade deal, Boeing President and CEO Dave Calhoun lauded the two countries' leaders for "building a fair and mutually beneficial trading relationship between the United States and China."
The agreement is "a sign of real progress and a welcomed first step," Chris Swonger, President and CEO of the Distilled Spirits Council of the United States, said in a statement.
U.S. spirits exports to China declined 8 percent between January and November in 2019 compared to the same period in 2018, the statement said.
The National Retail Federation (NRF), which has led the retail industry's fight against tariffs and is a key member of the Americans for Free Trade coalition, also welcomed the deal.
"The trade war won't be over until all of these tariffs are gone. We are glad to see the phase-one deal signed, and resolution of phase two can't come soon enough," said Matthew Shay, President and CEO of NRF.
(Source: Xinhua News Agency)
Copyedited by Rebeca Toledo
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