In this file:
· Lighthizer on China seeking flexibility
· EXPLAINER-Phase 1 trade deal ambiguity gives China ample room for coronavirus delays
Lighthizer on China seeking flexibility
By Julie Harker, Brownfield
February 5, 2020
There are reports that China is going to ask for flexibility on increasing U.S. ag product purchases under the phase one trade agreement, in light of the spreading coronavirus.
But, U.S. Trade Representative Robert Lighthizer tells Agri-Pulse he has NOT seen a request for flexibility from China.
John Baize with the U.S. Soybean Export Council...
EXPLAINER-Phase 1 trade deal ambiguity gives China ample room for coronavirus delays
David Lawder, Reuters
February 5, 2020
WASHINGTON, Feb 5 (Reuters) - The United States’ expected “export boom” to China in the aftermath of the Phase 1 trade deal will be delayed, as China battles the rapidly spreading coronavirus, White House economic adviser Larry Kudlow said on Tuesday.
Chinese factories, cities and transport links are shut as Beijing fights the spread of the virus, dampening domestic demand for everything from oil to consumer goods.
Under the trade deal, Beijing agreed to boost its U.S. purchases by $200 billion over two years, a massive increase that many analysts said was overly ambitious before the virus emerged.
In the text of the agreement, Beijing has pledged here to buy $76.7 billion of additional U.S. goods and services, on top of a 2017 baseline, in the 12 months that started Jan. 1, 2020, although the agreement doesn't formally take effect until Feb. 15, 2020.
It specifies an additional $123 billion in Chinese purchases for the second year, 2021.
Included in the first-year target are increases of $32.9 billion in U.S. manufactured goods purchases, $12 billion for agricultural products, $18.5 billion for energy and $12.8 billion for services.
The deal deliberately does not spell out when during the year these goods should be purchased, in part because Beijing insisted that market demand dictate purchase timing.
It says, “The Parties acknowledge that purchases will be made at market prices based on commercial consideration and that market conditions, particularly in the case of agricultural goods, may dictate the timing of purchases within any given year.”
The deal text contains a disaster clause, yet to be formally invoked by Beijing, to allow for delays: “In the event that a natural disaster or other unforeseeable event outside the control of the Parties delays a Party from timely complying with its obligations under this Agreement, the Parties shall consult with each other.”