Photo taken on Nov. 10, 2020 shows the Xiamen Area of China (Fujian) Pilot Free Trade Zone in Xiamen, east China’s Fujian Province.Photo: Xinhua
As the China-US phase one trade agreement is set to mark two years in force next month, there are many questions about the progress of the deal amid the COVID-19 pandemic. But if there were any issues with the implementation process, it is the US side who should accept the blame, given the country’s worst response to the public health crisis, severe economic and logistical woes and refusal to give up protectionist trade policies.
Ironically, many US and Western foreign media outlets have jumped on the story to discredit China’s efforts to carry out the deal. Without any official assessment from both China and the US, several media outlets sought to piece together figures from various sources to conclude that China’s purchase of US products fall short of the amount stated in the agreement.
Many of the reports have been fixated on China’s commitment to increase import of US agricultural and other products by $200 billion in two years over 2017 levels. An article published by the Washington-based think tank Peterson Institute for International Economics (PIIE), which claims to have followed the two countries’ trade, suggested that China’s purchases would only reach 60 percent of the commitment and that “enforcement [by US President Joe Biden’s administration] was critical.”
First and foremost, the accuracy of the number cannot be verified by any single party – not the PIIE, nor the media outlets that cited it. It is clearly stated in the agreement that both Chinese and US official trade data would be used and that “if an analysis of the respective trade data gives rise to conflicting assessments of whether this Chapter has been implemented, the Parties shall engage in consultations.”
Beyond the assessment of pledged purchases, the agreement clearly stated that the US would ensure to take appropriate steps to facilitate the availability of the US goods and services to be purchased by China and that the purchases would be made at market prices based on commercial considerations. China could also request consultations with the US if purchases were affected by the US or other circumstances in the US.
That is not to suggest that China would or would not reach the goal of buying $200 billion US products and services. The point is that the agreement made it clear that assessments of the purchased must be made by both sides, instead of a US think tank, its media outlets or US officials. There is no way China will sit idle against such slanderous claims against it.
Asked about the issue at a recent press briefing, a spokesperson for China’s Commerce Ministry pointed out that despite a number of challenges, including the pandemic, global economic recession and disrupted supply chains, China has strived to push forward the joint implementation of the deal, while urging the US to create better conditions for expanding bilateral trade cooperation. The spokesperson also said that trade teams from the two countries were engaged in regular discussion.
The messages are clear. First, China has been doing its part to fulfill its commitment. Second, there were a lot of other factors regarding global and US conditions that China cannot control. Third, communications were underway to address these issues.
Let’s check the data. In the first 11 months of 2021, China’s imports from the US jumped by 27.5 percent year-on-year – among the fastest pace for China’s import from top trading partners. Among them, US agricultural exports grew by 33 percent during the period. It is also obvious, with one of the worst responses to the pandemic, the US is struggling with elevated inflation and backlogged port supplies.
Given the spirit of the phase one trade deal was to address disputes between the two economic powers through consultation, we believe that talks on the phase one agreement is necessary to make an accurate and fair assessment on the results of the deal to avoid adding any additional tension to the already fraught bilateral ties.
The deal was aimed at defusing the trade war. But since Biden took office in January, the US has not changed its aggressive economic and trade tactics targeting China, and the Biden administration has even ramped up its assault against dozens of Chinese high-tech firms. Chinese officials stated when the agreement was first signed that the deal would see the gradual removal of US punitive tariffs on Chinese products, but Biden has kept in place those tariffs, which has exacerbated US inflation and is nothing but ridiculous.