The original Japanese text was published on February 19, 2020. So far, the trade war between the United States and China has mostly taken the form of reciprocal tariff increases. Although both sides have avoided increasing their tariffs and a “ceasefire” has been de facto in place, many challenges remain and the way forward to end the trade war remains difficult. Second, some economists hope that the agreement would exert external pressure to encourage economic reforms in China, much like when it joined the WTO in 2001, but it must be recognized that there are crucial differences between the two situations. The WTO is a multilateral agreement that applies to all its members the principle of the most favoured nation. On the other hand, this agreement is bilateral and many of its measures do not apply to third countries. In addition, China`s accession to the WTO has fostered free trade through tariff reductions and other trade barriers, while a number of numerical targets for imports from the United States, as defined in the agreement, are steps toward controlled trade. This preferential treatment of the United States is contrary to the principle of the most favoured nation and constitutes unfair competition for companies and industries in China and other countries. However, this agreement would not have been reached if China had not made major concessions. At the press conference in Washington in May 2019, after the conclusion of negotiations with the United States, Chinese Vice Premier Liu He referred to three preconditions for signing the agreement, namely 1) the total abolition of additional tariffs by the United States, 2) the limitation of additional U.S. imports on a more realistic scale and 3) a more balanced agreement in recognition of the dignity of both nations (Note 4) , but it is clear that these three conditions have not been met in this agreement. This could allow Beijing to invest more assiduously in the development of new trade relations, including trade relations along the belt and the street, and with the Eurasian Economic Union.
But narrative and projections set aside, leave us in what the U.S.-China actually said about economic and trade agreements. Moreover, the agreement does not mention China`s industrial policy, presented by the “Made in China 2025” industrial plan, or government subsidies to state-owned enterprises, both of which are of considerable interest to the United States. This policy is expected to be at the heart of future negotiations, but as they are seen as pillars of China`s “state capitalism” economic system, it will not be easy to reach a compromise between the two sides on these issues. 1. Intellectual Property China is committed to strengthening enforcement of intellectual property law. In addition, the agreement raises many long-standing concerns regarding trade secrets, patents and pharmaceutical intellectual property, geographical indications, trademarks and the application of pirated and counterfeit products. Of the 8 sections, point 6, which governs the expansion of trade, forms the core of the agreement. Its implementation is expected to significantly reduce the trade imbalance between the United States and China. China promises to increase imports of U.S. goods and services by $76.7 billion or more in 2020 and $123.3 billion or more in 2021 (for $200 billion or more over two years) compared to the value of 2017 ($186.3 billion), the year before the start of the trade war (Chart 1) (Figure 1). If this is achieved, Chinese imports of U.S.
goods and services will reach $263.0 billion in 2020 and $309.6 billion in 2021. In particular, imports of agricultural products will be increased from the value of 2017 ($19.6 billion), $12.5 billion in 2020 and $19.5 billion in 2021 (note 2). In addition, China will seek to increase its imports of agricultural products from the United States by $5 billion per year over the past two years.
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