REVIEW - China To Buy $200Bln Of US Goods Under 'Phase One' Trade Deal Trump Vows To Enforce

WASHINGTON (UrduPoint News / Sputnik - 16th January, 2020) China agreed to purchase at least $200 billion worth of US goods over the next two years, respect intellectual property rights and not manipulate its Currency as part of a trade pact President Donald Trump assured skeptics will be fully enforceable.

Trump and Chinese Vice Premier Liu signed the so-called Phase One accord in front of some 200 people at the White House on Wednesday.

In addition to buying US goods the deal also compels China to protect US patents and intellectual property, fight piracy and not devalue the Yuan to its advantage.

"There are very strong and powerful restrictions here that ensure total full enforceability," Trump said before he and Liu shook hands on the deal. "This deal is Phase One, we'll probably be able to conclude it with Phase Two, we don't expect to have a Phase Three."

Despite the assurances, the Trump administration is also retaining tariffs on $360 billion worth of Chinese goods to ensure Beijing keeps to the deal.

The two countries hope the deal marks a step towards eventually resolving their two-year long trade war.

The US-China trade war began in January 2018, when Trump announced duties on some select Chinese-made products. A series of tit-for-tat tariffs soon took both countries toward a full-blown trade confrontation. At last count, Washington had tariffs on $550 billion worth of Chinese goods and Beijing had responded with $185 billion of its own taxes.

The Chinese government said earlier this week it was also keeping the tariffs it had imposed on US goods.

A senior Trump administration official told reporters the United States will keep a close watch on import-export data to ensure China fulfills its purchase commitments under the Phase One deal.

Another member of the administration said there was a 90-day allowance to settle possible disputes, and for a complaining side to take proportionate countermeasures if consultations prove unsuccessful.

"As long as the action is in good faith, the other side would not be able to either take countermeasures or otherwise challenge the option," the administration member said. "The only remedy is to get out of the agreement."

China, according to the text of the deal, agreed to buy nearly $33 billion worth of US manufactured goods this year and another $44.8 billion in 2021.

In addition, Beijing also will purchase $12.5 billion in American agricultural products in 2020 and $19.

5 billion next year, the document revealed.

China will also increase US energy imports by more than $50 billion in the next two years above the 2017 baseline - including $18.5 billion in this year and $33.9 billion in 2021.

The agreement also revealed that China will buy $12.8 billion in US services this year and $25.1 billion in 2021.

The United States and China agreed to protect patents, particularly in pharmaceuticals, and ban counterfeit products and misappropriation of trade secrets.

"China shall permit pharmaceutical patent applicants to rely on supplemental data to satisfy relevant requirements for patentability, including sufficiency of disclosure and inventive step, during patent examination proceedings, patent review proceedings, and judicial proceedings," the text of the agreement says.

The United States, in turn, "affirms that existing US measures afford treatment equivalent to that provided for in this Article."

Beijing and Washington will also strengthen cooperation and coordination in combating piracy, including counterfeiting on e-commerce platforms.

On the protection of trade secrets, the United States said China will treat as "urgent" the use, or attempted use, of claimed trade secret information and provide its judicial authorities the authority to order a preliminary injunction based on case facts and circumstances.

Washington pledged to do the same for China.

China agrees to not engage in currency manipulation for the purpose of achieving trade advantages over the United States.

"The Parties shall refrain from competitive devaluations and not target exchange rates for competitive purposes, including through large-scale, persistent, one-sided intervention in exchange markets," the text of the agreement said.

The United States and China will communicate regularly and consult on foreign exchange markets, activities and policies as well as consult with each other regarding the International Monetary Fund's assessment of the exchange rate of each country, the agreement adds.

It also states that the United States and China should achieve and maintain a market-determined exchange rate regime.

All three of Wall Street's major stock indexes hit record highs and closed up as investors celebrated the deal after being skeptical a day earlier amid news that the Trump administration was keeping its tariffs on China as leverage.