Washington D.C. – The National Foreign Trade Council (NFTC) today welcomed the announcement of a phase one agreement between the United States and China, a critical first step towards a more sustainable, predictable and mutually-beneficial trading relationship.
The agreement outlines deliverables in areas critical to U.S. business, including prohibitions on forced technology transfer, improved market access for financial services, disciplines on state-directed outbound investment, and enhanced protections of trade secrets and other intellectual property rights.
“We are glad to see progress towards a resolution of the U.S.-China trade war, but it is important to remember that there is a lot more work to do,”said Rufus Yerxa, President of the NFTC. “As with any trade agreement, the devil is in the details, and many of details of this deal are not clear yet.”
In the coming days and weeks, it will be important for the two sides to provide more clarity on the removal or reduction of tariffs on each other’s’ products and on Chinese purchase commitments so that U.S. exporters can better assess new business opportunities, and to release details alluded to in the agreement, including on China’s Action Plan to strengthen intellectual property protection.
“Enforcement will be key to the success of this deal,” added Yerxa. “We look forward to working closely with the Administration to make sure that the commitments contained in this agreement translate into commercial opportunities for U.S. businesses in the Chinese market.”
The NFTC believes that tariffs should not be the first resort in disputes with China or with our other trading partners. Going forward, China and the United States must work through the newly-created bilateral dispute resolution mechanism to assess compliance with the agreement and to resolve tensions as they arise in order to prevent future cycles of new tariffs, which would create permanent uncertainty for businesses.
Normalizing the U.S.-China trade relationship will require the two sides to implement fully the phase one agreement and to move expeditiously to a phase two agreement that removes tariffs and additional structural imbalances to the relationship, and sets the two countries on a path towards a trade relationship governed by market forces rather than managed trade and tariffs.