Related Topic in KAS Prelims Syllabus:
International Relations [Paper-II]: International Treaties and Forums, their structure and mandate
China and the U.S. announced that they have reached a phase one trade deal including some tariff relief, increased agricultural purchases and structural change to intellectual property and technology issues.
- As part of the deal, the US will halve its 15 per cent tariff on about $120 billion in Chinese goods.
- It will also suspend indefinitely planned duties that were set to take effect on 15th December, 2019 that would have covered consumer favorites such as smartphones and laptops.
- China didn’t agree to specific tariff reductions in the deal. Instead, the nation’s obligation is to make the purchases and to have an exclusion process for its tariffs.
- According to the US, China has agreed to increase its total purchases of US goods and services by at least $200 billion over the next two years.
- China also committed to increase its buying of US agricultural products to $40 billion to 50 billion in each of the next two years.
- The specific breakdown of targets for individual commodities will be classified and not disclosed to the public.
- The deal will center around “state-of-the-art” IP commitments and a breakthrough on forced technology transfer.
- The Office of the United States Trade Representative (USTR) announced that China has agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government.
- The agreement will include a dispute-resolution mechanism that will serve as the enforcement arm. That process is in line with how other US trade agreements are enforced.
- The first phase of the trade deal leaves contentious issues unresolved, including US demands that China curb subsidies to state-owned firms.
- As per United States, the future talks will also focus on digital trade, data localization, cross-border data flows and cyber intrusions.