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EU details Phase 1 Agreement with China

Under the Phase 1 Agreement, China has committed to ensuring that purchases and imports into China from the United States of agricultural and fishery products exceed the corresponding 2017 reference amount by $ 12.5 billion in 2020 and $ 19.5 billion. in 2021.

This is already explained in the Economic and Trade Agreement between the United States of America and the People’s Republic of China, but now the US government has clarified questions about it.

In general, purchases will be made at market prices based on commercial considerations and market conditions may dictate the timing of purchases within a given year.

First of all, the value of 2017 exports to China was as follows, in dollars and according to data from the United States Census Bureau:

  • Beef: 30 million 928,503.
  • Pork: 488 million 569,570.
  • Wheat: $ 351 million 092,196.
  • Soybean: 12,224 million 417,839.

Phase 1 Agreement

To avoid speculative behavior in the commodity markets, the parties are not disclosing further disaggregated information.

Chinese buyers can choose specific products and sellers, buy by time, and negotiate prices according to current market conditions.

While China is obliged to make the purchases identified in the Agreement during the first two years, the parties acknowledge that the purchases will be made at market prices based on commercial considerations.

The Agreement does not restrict China from purchasing food, agricultural and seafood products from other countries nor does it discriminate against these products.

From January 2020 to October 2021, China’s total imports of Phase 1 covered products from the United States were $ 208.3 billion, compared with the Phase 1 Agreement target of $ 334.8 billion.

According to US statistics, this amount represents 62% of the commitments made by the Chinese government.

According to US statistics, this amount represents 62% of the commitments made by the Chinese government.

At the same time, considering Chinese government figures, US exports to China of the covered products were $ 186.2 billion, compared to the Phase 1 target of $ 310.8 billion.

This equates to 60% of the Phase 1 goal.

 

Redacción Opportimes

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