China confirms plans to sign proposed ‘phase one’ trade deal with US

US President Donald Trump is expected to sign a preliminary trade agreement between the US and China on 15 January 2020, cementing a deal that could lessen trade tensions that have weighed on global markets. China confirmed that Vice Premier Liu He was scheduled to travel to Washington to participate in a signing ceremony.

Under the deal, China would boost imports from the US and pledged to protect intellectual property rights better. The Trump administration agreed to suspend planned tariff escalations in October on US$156 billion of Chinese goods and halve a 15% US tariff on US$120 billion of Chinese imports.

The two sides have not released the 86-page phase-one deal, but the White House said it secured certain commitments from China. Those included pledges for stricter rules around intellectual property protections and currency movements, as well as increased financial sector access for US firms. It is understood that China had also agreed to dramatically increase its imports of US farm products.

The Trump administration has said that after the first stage is signed, trade negotiators would begin working toward a more comprehensive trade agreement.

China has pledged to improve market access for foreign investors and better protect their rights in the face of growing complaints and slower foreign investment. It has drafted a new foreign investment law that would prohibit forced technology transfers and illegal government ‘interference’ in foreign business operations, practices that have come under the spotlight in its trade dispute with the US.

The final draft law says: “Official authorities and their staff shall not use administrative means to force the transfer of technology.” This is a much stronger stance than the general statement issued in 2015 that foreign firms’ IP rights would be protected.