“Phase One” US-China trade deal signed at White House

Published on
January 15, 2020

The so-called “Phase One” trade deal, which cancels current and proposed U.S. tariffs on Chinese goods in exchange for structural economic reforms in China, was formally by U.S. President Donald Trump and Chinese Vice Premier Liu He on Wednesday, 15 January at the White House in Washington D.C.

The deal, which includes specific provisions pertaining to seafood, will go into effect in 30 days.

In conjunction with the signing, the official agreement was released by the U.S. Trade Representative, making it publicly available for the first time. The deal includes a promise by China to purchase USD 200 billion (EUR 179.3 billion) of American goods and services, of which USD 40 billion (EUR 35.8 billion) will be agricultural goods, according to Liu’s public comments at the signing ceremony. China also agreed to enforce stronger protections for American intellectual property, committed to greater transparency in the way it manages its currency, and said it would permit further access to its markets for American banks.

In return, Trump will reduce by half the current 15 percent tariffs on USD 120 billion (EUR 107.9 billion) of Chinese goods and cancel a plan to impose tariffs on an additional USD 160 billion (EUR 143.5 billion) of Chinese imports.

“Today, we are taking a momentous step towards a future of fair and reciprocal trade. Together we are righting the wrong of the past,” Trump said. “At long last Americans have a government that puts them first at the negotiating table. This is the biggest deal anybody has ever seen.”

The “Phase One” will leave in place 25 percent tariffs on an additional USD 250 billion (EUR 224.8 billion) of Chinese imports. It also contains a threat of additional punishment by the United States if Beijing does not meet the terms of the deal.

In regard to seafood, a statement by the U.S. Trade Representative said the “Phase One” deal will provide U.S. fishermen and seafood companies “expanded access to China’s rapidly growing market for imported seafood products.”

“As incomes rise in China, consumption of animal proteins such as seafood is becoming more popular among Chinese consumers. In addition, China is a major partner for U.S. seafood producers who ship raw seafood to China for further processing. However, in recent years, U.S. seafood exports to China have been hampered by restrictive Chinese regulatory initiatives. The Phase One agreement addresses these limitations and gives U.S. seafood companies increased access to the China market,” the USTR wrote.

China has agreed to approve 26 species of seafood for importation into China; Allow imports from U.S. seafood and fishmeal facilities that are in good standing with the U.S. Food and Drug Administration (FDA) and the National Oceanic and Atmospheric Administration (NOAA); Ensure it updates seafood and fishmeal facility registrations within 20 business days of receipt from the FDA and NOAA; And ensure the continued use of existing bilaterally-agreed certificates issued by NOAA, according to the agreement.

“China has also committed to streamline the timelines and procedures for registering U.S. seafood facilities and products including fishmeal and oil,” the USTR said.

Furthermore, China has agreed to not require any routine audits or inspections of U.S. aquatic product facilities, though it may still perform risk-based audits in coordination with U.S. authorities.

“China may also conduct inspections of a risk-based selection of shipments of U.S. aquatic products at the port of entry,” according to the deal. “China will notify the United States if it notices a significant, sustained, or recurring pattern of non-conformity by a particular facility and if it intends to restrict imports from that facility. The United States and China will work together to resolve any such issues should they be detected.”

According to the USTR, China has promised to purchase USD 80 billion (EUR 71.6 billion) worth of agricultural goods over the next two years, a category which it said also includes seafood.

A tweet by U.S. Senator Susan Collins (R-ME) on Wednesday, 15 January said the deal will benefit Maine’s lobster exporters.

“Good news for Maine’s lobster industry in the Phase One China Trade Deal signed today! Following my advocacy, lobster is specifically named in the Chinese purchase agreement.”” she wrote. “I appreciate @USTradeRep Lighthizer’s responsiveness to our concerns. I will continue to fight on behalf of Maine’s lobstermen & women & work with my colleagues in the Maine delegation to address the challenges facing this iconic fishery.”

In a statement, National Fisheries Institute President John Connelly praised the deal, calling it a "vital trade effort."

"Knocking down nontariff barriers, cracking open markets, and ensuring China follows through on global commitments are essential for American fisheries to succeed globally," Connelly said. "We urge the administration to work swiftly towards a phase-two solution that sees tariffs, import and export, removed so jobs in all sectors of American fisheries benefit."

Photo courtesy of The White House

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