The US-China deal leaves much contention for phase two
Thursday, January 16, 2020
Significance
A limited number of the bilateral disputes are addressed -- primarily trade and intellectual property (IP) protections -- but unresolved fundamental differences over Beijing’s state-led economic model, including government support for Chinese enterprises, indigenous technology development and cyber theft, are deferred to phase two.
Impacts
- Achieving a comprehensive phase two deal may prove impossible, presaging smaller, issue-specific agreements.
- Without clarity on the phase two timetable, multinational firms will continue reducing their supply-chain reliance on China.
- The United States will still hinder China gaining US advanced technology via direct investment and access to US universities.
- The deal will provide impetus for concluding a US-China bilateral investment treaty.
- The brake that the trade war imposed on the commodity price cycle upswing will be released and agricultural prices will rise.