Can China meet its purchase obligations under the Phase One Trade Agreement?

Three AAEA members release new research in AEPP

The USDA, Foreign Agricultural Service says the Phase one Trade Agreement, which began in 2020, put into action “requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.” Under the Phase One Trade Agreement, China agreed to import at least $80 billion in U.S. agriculture over a two-year period (2020 and 2021), which was quite ambitious given that US agricultural exports to China were only $21 billion before the trade war.

In the new article “Can China meet its purchase obligations under the Phase One Trade Agreement?”, Andrew Muhammad and Aaron Smith from the University of Tennessee-Knoxville as well as Jason Grant from Virginia Tech, look into the likelihood of meeting China’s purchase obligations under the Phase One Trade Agreement.

Muhammad says, “In 2020, US agricultural exports to China ($27.2 billion) were 85% higher than in 2019, but 18% short of the first-year Phase One goal ($33.4 billion). Evidence shows that many sectors experienced no change, particularly when compared to exports before the trade war.”

Grant adds, “In particular, even though some US commodity exports to China increased, these gains did not always translate into increased market share in China.”

If you are interested in setting up an interview, please contact Allison Ware in the AAEA Business Office.

ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more, visit www.aaea.org.

Contact: Allison Ware
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Email: aware@aaea.org