President Donald Trump’s new trade deal with China will further integrate the world’s two largest economies if Beijing honors its commitments in areas ranging from intellectual property protection to agriculture, U.S. Trade Representative Robert Lighthizer said Sunday.
“Ultimately, whether this whole agreement works is going to be determined by who’s making the decisions in China, not in the United States,” Lighthizer said on CBS News’ “Face the Nation.” “If the hardliners are making the decisions, we’re going to get one outcome. If the reformers are making the decisions, which is what we hope, then we’re going to get another outcome.”
The “phase one” trade deal announced Friday cancels additional duties that were scheduled to go into effect Sunday, reduces duties on about $120 billion of Chinese goods to 7.5 percent, from 15 percent previously, and leaves a 25 percent duty in place on another $250 billion worth of Chinese goods.
China, in addition to making promises to better protect U.S. intellectual property, has pledged to buy another $200 billion worth of goods and services from the United States over the next two years, including about $40 billion to $50 billion worth of agricultural products each year.
“You could think of it as $80 to $100 billion in new sales for agriculture over the course of the next two years. Just massive numbers,” Lighthizer said.
That has prompted questions about whether U.S. farmers can actually accommodate the increased demand, without siphoning sales away from other export markets they already have.
For much of the last two years, there has been a debate about whether Trump’s true aim by imposing tariffs on hundreds of billions of dollars of Chinese good was to separate, or “decouple,” the U.S. economy from China, rather reach an actual trade agreement.
On Sunday, Lighthizer indicated the objective was to tie the two economies closer together.
“The way to think about this deal, is this is a first step in trying to integrate two very different systems to the benefit of both of us,” the trade chief said.
The Trump administration also got another trade win last week when House Democrats and the AFL-CIO endorsed a newly revised North American trade agreement with Mexico and Canada, after changes were made to toughen labor enforcement provisions and weaken intellectual property protections for life-saving biologic medicine.
Some of the tweaks made to shore up Democratic support have annoyed Republicans, who have different views of both issues. But that’s not expected to block congressional approval. The House is expected to vote on the bill this week and the Senate to follow suit in early 2020, after it finishes Trump’s impeachment trial.
Lighthizer conceded weakening the biologics provision made the trade deal worse on that point. But he said the overall package was “better” as a result of the changes demanded by Democrats.
“There’s nothing about being against labor enforcement that’s Republican,” Lighthizer said. “The president wants Mexico to enforce its labor laws. He doesn’t want American manufacturing workers to have to compete with people who are in very difficult conditions.”
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