Trade Agreement With China Text

Intellectual property theft was one of the trump administration`s main reasons for starting a confrontation with China. Previous governments have tried to get China to tackle the practice with limited success. Chinese Vice Premier Liu He is with U.S. President Donald Trump after the signing of China and the United States. Phase 1 of the Economic and Trade Agreement in the East Room of the White House in Washington, U.S., January 15, 2020. /Reuters Photo REALIZING that it is in both countries` interests for trade to increase and for international standards to be adhered to to promote market-based results. Nevertheless, the Phase 1 agreement did not resolve Washington`s fundamental differences with Beijing, which depends on massive state intervention in the economy to turn China into a technological powerhouse. The agreement also contains obligations, at least on paper, to stop the forced transfer of U.S. technology to Chinese competitors. Companies have long complained about having to issue valuable business secrets and technologies to do business in China. China has pledged not to require such transfers, even if companies apply for certain government licenses or authorizations. If these discussions are not able to resolve the dispute, other tariffs will come into effect. In such a scenario, the other party promises not to impose its own tariffs.

If this is the case, one of the two countries can denounce in writing and withdraw from the agreement – and quickly bring the two countries back into a trade war scenario. The 86-sided agreement facilitates criminal prosecution in China against those accused of stealing trade secrets. It contains provisions to prevent Chinese government officials from applying administrative and regulatory procedures to remove the trade secrets of foreign companies and to allow such information to end up in the hands of Chinese competitors. Wednesday`s partial ceasefire could restore some confidence and Chinese purchases will help some sectors of the U.S. economy, but the pact preserves the bulk of tariffs on $360 billion worth of goods from China. Administration officials have said they will not lift these rights until countries can agree to a phase 2 agreement.