By Bloomberg News
China and the U.S. announced last week, to the stock market’s relief, that they had agreed on a trade deal — but much of its content has yet to be released or confirmed by the two sides.
Like a previous agreement inked this time last year, there are some gaps in what the nations say about the new deal and, in particular, what China has promised to do. U.S. Trade Representative Robert Lighthizer brought a copy of the 86-page agreement to a briefing with reporters last week, but so far no one outside the negotiating teams has seen the details.
The Chinese press conference unveiling the agreement was light on facts. The U.S., meanwhile, offered a two-page fact sheet, the briefing and a rare Sunday TV appearance by Lighthizer to explain the deal to a mostly domestic audience. Here’s how the initial communications compared on the key issues:
- Signing ceremony: U.S. says the aim is to sign the agreement in early January and it would take effect 30 days later. China says those details are still under negotiation.
- Overall exports: U.S. says China agreed to increase imports of goods and services in 2020 and 2021 by a total of $200 billion more than the total in 2017. China says it will buy more goods and services, based on the principles of market forces and the rules of the World Trade Organization, but announced no numbers.
- Agricultural purchases: U.S. says Beijing promised to buy at least $40 billion of American farm goods in 2020 and 2021 . China says it will “significantly increase” imports but no values or volumes were given.
- Intellectual property: U.S. says this section “addresses numerous longstanding concerns in the areas of trade secrets, pharmaceutical-related intellectual property, geographical indications, trademarks, and enforcement against pirated and counterfeit goods.” China uses similar language but doesn’t specify any new measures while promising to continue to improve the IP system and implement the agreement.
- Forced technology transfer: U.S. says “China has agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies.” China makes no mention except as title of chapter.
- Currencies: U.S. says both sides both side agreed to refrain from competitive devaluations of exchange rates. China makes no mention except as title of chapter.
Even if more clarity comes in the next few weeks, there’s no information now as to how the U.S. will achieve the ambitious export targets it says were agreed on — especially when you consider that exporters also need to recover from the drop in volume this year from the trade war. That gap seems even larger for agricultural goods, which are a focus of the deal.
China’s slowing domestic economy means that its total imports dropped 4.5% in the first 11 months of 2019. With gross domestic product growth expected to slow further next year, it may be difficult for imports to pick up. That means any substantial increase in Chinese purchases from the U.S. would come at the expense of its dealings with other nations.
Charting the Trade War
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