Enforcement Uncertain for Phase One Deal

January 22, 2020 | BY

Vincent Chow

A breakthrough in the trade war, but how long will it last?

The partial deal signed by China and the United States caps off two years of intense negotiations in "phase one" of the ongoing trade war. The agreement marks the first time since the trade conflict officially began in 2018 that either side has made official pledges on tariffs, agricultural purchases, technology transfers and more. However, doubts remain about how the deal will be enforced, as the agreement does not refer to a third-party to adjudicate potential disputes. Instead, the two countries will police the agreement themselves.  

The six-page penultimate chapter of the text, titled "Bilateral Evaluation and Dispute Resolution", sets out the enforcement regime. Where one party believes the other to not be acting in accordance with what has been agreed, they can "suspend 'an obligation under this Agreement or adopt' a remedial measure," after around 90 days of consultations.

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