Caixin
Jan 09, 2020 04:24 PM
ECONOMY

China Delegation to Visit U.S. to Sign ‘Phase One’ Trade Pact

China's Vice Premier Liu He. Photo: Xinhua
China's Vice Premier Liu He. Photo: Xinhua

Vice Premier Liu He will travel to the U.S. next week to sign the first phase of a trade pact between the world’s two largest economies, China’s Commerce Ministry said on Thursday.

At Washington’s invitation, Liu will lead a delegation that will visit the U.S. from Jan. 13 to Jan. 15, Commerce Ministry Gao Feng said at a regular press briefing. He said the Chinese delegation would sign a first phase trade agreement with Washington that was previously reached in December, formalizing a truce in their trade war that has lasted for more than a year.

Gao also said that China will improve its quota management for wheat, corn, and rice based on World Trade Organization rules, which doesn't conflict with expanded U.S. agricultural product imports, according to Chinese state media reports.

His comments echoed those from China’s vice agricultural minister, Han Jun, who told Caixin on Saturday that China will not increase its annual global import quotas for certain grains to accommodate the U.S. and win a phase one trade deal.

China’s promise to expand imports of American agriculture products as part of the phase one trade deal has sparked speculation that the nation may adjust or cancel its global quota for corn in order to meet a target for imports from the U.S.

The statement is the first Chinese confirmation of the signing, which U.S. President Donald Trump said would be Jan. 15. Trump has also said he will go to Beijing after the deal is inked to begin negotiations on the second phase.

The two sides have been locked in their trade war since July 2018, when Washington first levied punitive tariffs on about $34 billion in Chinese imports and China retaliated with similar measures. Since then the two sides have engaged in more tit-for-tat tariffs, to the point where most bilateral trade is now subject to such tariffs.

Washington accuses China of a number of illicit trade practices, including providing unfair state subsidies for certain industries, erecting barriers to foreign investment and turning a blind eye to intellectual property theft. The first-phase agreement is designed to address some of the easier issues, including taking steps to reduce China’s large trade surplus with the U.S. But both sides have agreed to put off the thornier issues for a future agreement.

Bloomberg contributed to this report.

Contact reporter Yang Ge (geyang@caixin.com; twitter: @youngchinabiz)

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