The Signing of the China-US Phase-One Economic and Trade Agreement Is a Win-Win Step

H.E. Lin Songtian, Ambassador of China to South Africa

On January 15, 2020, China and the United States officially signed the phase-one economic and trade agreement. As the top two economies and two major countries shouldering major responsibilities in international affairs, the signing of the agreement is good for China, for the United States and for the whole world. It goes without saying that the agreement will deliver benefits to all.

Facts have once again proved that world multi-polarization, economic globalization, cultural diversity and IT application have become the irresistible trend of our times. Cooperation is better than friction, and dialogue is better than confrontation. On the basis of equality, mutual benefit and respect, China and the US can find effective ways to properly settle their differences through dialogue and consultation. The "winner-takes-all" law of the jungle and the "you lose and I win" Cold-war mentality are outdated.

Unilateralism, trade protectionism and bullying will lead us nowhere. There are no winners in the trade war. Win-win cooperation for common development is the only right choice.

The signing of the China-US phase-one economic and trade agreement is of great significance. It is conducive to easing the current global trade tensions and eliminating market uncertainty. It is an agreement that stabilizes market expectations and promotes world prosperity. It will help maintain the steady and sound growth of the overall China-US relations, and promote world peace and development.

From the perspective of major-country relations, the agreement was reached on the basis of equality and mutual benefit, thus creating a new model for resolving economic and trade frictions among major countries and bringing new hope for world development.

Therefore, once announced, the agreement has been universally welcomed by China and the US, the international community and the financial market. It has injected positive energy into the stability and development of the world economy.

The main contents of the agreement can be summed up in the following three aspects. First, China and the US shall deepen two-way trade cooperation, and expand trade in agricultural produce, manufactured goods, energy and service industry.

Second, China and the US shall further promote market access, which includes further opening financial services to each other and providing more market opportunities for enterprises.

Third, China and the US shall further improve business environment. Both sides shall strengthen intellectual property rights protection and encourage technological cooperation on the basis of resource endowment and market conditions, so as to promote fair competition and stimulate the innovation and development vitality of market players. In terms of tariff reduction, the United States has promised to gradually eliminate additional tariffs on products imported from China, thus realizing the transition from raising tariffs to lowering tariffs.

According to the phase-one agreement, the United States pledges to eliminate the intended additional tariffs starting from October 15 and December 15, 2019, and cut the tariff rate imposed since September 1 from 15% to 7.5%.

China has not changed its position of firmly opposing the trade war and upholding free trade and the multilateral system. We will push the US to eliminate all additional tariffs so that the China-US economic and trade relations can be brought back to the right track and normal order.

In the phase-one agreement, China agrees to import another 200 billion US dollars goods and services from the US in the coming two years, which is an arrangement mainly based on the consideration that China has long-term huge trade surplus with the US. China is willing to expand trade with the US and ease the bilateral trade imbalance on the precondition of satisfying the demand of the Chinese people for a better life and following market and business principles.

Meanwhile, it is clearly noted in the agreement that China will increase imports of goods and services from all countries including the US as China further opens up its economy and unleashes its domestic market potential. The agreement sets no restrictions on exports of goods and services to China from any other countries or economies.

What needs to be stressed is that China always attaches great importance to safeguarding the legitimate rights and interests of other countries. The expansion of Chinese enterprises' purchase from the US is based on three principles. First, we follow the market and business principles.

Second, we abide by WTO rules. Third, the purchase is the behavior of enterprises, which is carried out independently according to the supply and demand conditions of the market. The government does not purchase directly or provide subsidies. At the same time, the US shall fulfill its obligations to ensure adequate supply of goods and services.

China firmly upholds the multilateral trading system and the relevant WTO rules, and resolutely opposes unilateralism, trade protectionism and bullying. The agreement shall not affect the rights and obligations of China and the US under the WTO and other international organisations to which both countries are parties. For example, expanding trade must be in line with the WTO rules. The two sides have agreed to establish bilateral evaluation and dispute settlement arrangements, and uphold the WTO spirit of the commensuration of rights and obligations and giving priority to settling differences through negotiations.

Now that the agreement has been inked, the key is to implement it. China is ready to work with the US to uphold the principles of equality, mutual benefit and mutual respect, fully implement the agreement to maintain the sound development of China-US economic and trade relations and make greater contributions to world peace and prosperity.