Agriculture Purchase Commitments Under the U.S.-China Trade Deal: The Case of Beef

Simon Lester andHuan ZhuYesterday, President Trump and Chinese Vice Premier Liu He signed a " phase one "U.S.-China trade deal. A " phase two " deal may be coming, although the timing is unclear, and many people (including us) are skeptical that it will happen any time soon. There are some technical and complicated parts of the phase one deal, and it will take some time to digest it all and come up with an overall evaluation. But it ' s worth exploring some specific aspects right away. One of the most talked about parts of the phase one deal is the commitments by China to purchase large amounts of U.S. products, including agricultural products. Article 6.2, paragraph 1 of the deal has broad details of these purchases:During the two-year period from January 1, 2020 through December 31, 2021, China shall ensure that purchases and imports into China from the United States of the manufactured goods, agricultural goods, energy products, and services identified in Annex 6.1 exceed the corresponding 2017 baseline amount by no less than $200 billion.Given that U.S. exports to China in 2017 were about $180 billion, an additional $200 billion over two years would be a massive increase. The deal further divides up these purchases into manufactured goods, agricultural goods, energy, and services, with specified amounts for each. It then provides sub-categories, but it does not publicly break down the purchase amounts by sub-category (apparently it does so in a confidential version of the...

Source: Cato-at-liberty - January 16, 2020 Category: American Health Authors: Simon Lester, Huan Zhu Source Type: blogs