US President Donald Trump and China’s chief trade negotiator, Vice-Premier Liu He, signed phase one of the Economic and Trade Agreement on January 15, 2020.

The deal marks phase one in a two-part negotiation.

The U.S. will reduce the tariffs on list 4(a) to 7.5% and the tariffs on list 4(b) will be suspended. The 25% tariff on lists 1, 2, and 3 will remain in place. 

Additionally, China has committed to buying an additional $200 billion worth of American goods and services by 2021 and to adhere to disciplines covering a range of issues.  The phase one agreement, will go into effect on February 14, 2020. It contains individual chapters on IP, technology transfer, food and agriculture, financial services, macroeconomic policies, exchange rates, Chinese purchase targets for U.S. goods and services, and dispute resolution.

A summary of the specific chapters of the phase one agreement is provided below. Click here to read the complete Fact Sheet of USTR.

  • Intellectual Property: This chapter addresses numerous longstanding concerns in the areas of trade secrets, pharmaceutical-related intellectual property, geographical indications, trademarks, and enforcement against pirated and counterfeit goods. 

 

  • Technology Transfer: This chapter sets out binding and enforceable obligations to address several of the unfair technology transfer practices of China that were identified in USTR’s Section 301 investigation. 

 

  • Agriculture: This chapter addresses structural barriers to trade and will support a dramatic expansion of U.S. food, agriculture, and seafood product exports.

 

  • Financial Services: This chapter addresses a number of longstanding trade and investment barriers to U.S. providers of a wide range of financial services, including banking, insurance, securities, and credit rating services, among others.

 

  • Currency: This chapter addresses unfair currency practices by requiring high-standard commitments to refrain from competitive devaluations and targeting of exchange rates while promoting transparency and providing mechanisms for accountability and enforcement. 

 

  • Expanding Trade: This chapter includes commitments from China to import various U.S. goods and services over the next two years in a total amount that exceeds China’s annual level of imports for those goods and services in 2017 by no less than $200 billion. 

 

  • Dispute Resolution: This arrangement creates regular bilateral consultations at both the principal level and the working level. It also establishes strong procedures for addressing disputes related to the agreement and allows each party to take proportionate responsive actions that it deems appropriate. 

 

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