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

Abstract

This paper examines China's likelihood of meeting its purchase obligations under the Phase One Trade Agreement. 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. Some sectors benefited from China's overall demand growth and not necessarily from agreement commitments. Although there were substantial increases in exports of other major products (e.g., corn and poultry), these increases could not make up for less than expected soybean exports.

Soybean production, marketing costs, and export competitiveness in Brazil and the United States

“…The price of U.S. soybeans declined, while internal (domestic) soybean prices in Brazil increased (Marchant & Wang, 2018;Taheripour & Tyner, 2018). The Phase One trade agreement signed in January 2020 that included China's promise to increase purchases of U.S. soybeans resulted in U.S. soybean exports reaching pre-retaliatory tariff trade levels but below the commitments (Muhammad et al, 2022;Bown, 2021).…”