After months of negotiations, the US and China recently signed a Phase 1 trade agreement. This deal aims to end the ongoing trade war between the two countries and benefits several industries. Here`s what the agreement entails:
Intellectual Property
The US has long accused China of violating its intellectual property rights. Under the new agreement, China has agreed to tighten its rules on intellectual property protection. This includes strengthening its patent system, increasing criminal penalties for IP theft, and establishing measures to prevent counterfeit goods from entering the US.
Agriculture
China has agreed to purchase an additional $32 billion of US agricultural products over the next two years. This includes beef, pork, soybeans, and other crops. The agreement also eliminates some barriers to US agricultural exports to China, such as the need for inspections and certifications.
Financial Services
The agreement also includes measures to give US financial service providers greater access to China`s market. This includes easing restrictions on foreign banks, allowing US firms to provide credit rating services, and enabling US insurance companies to provide services in China`s market.
Currency
The agreement addresses one of the US`s key complaints about China`s trade practices – currency manipulation. Under the deal, China will not devalue its currency to gain a competitive advantage. Additionally, both countries agreed to “refrain from competitive devaluations and not target exchange rates for competitive purposes.”
This agreement marks a significant breakthrough in the ongoing trade war between the US and China. However, this deal only covers a limited range of issues, and it remains to be seen how effective it will be in resolving the underlying tensions between these two economic superpowers. Nonetheless, the agreement offers a glimmer of hope that a resolution to this long-standing dispute is possible.