No, the U.S.-China trade war isn’t quite over yet—but the parties signed a “phase one” agreement in Washington yesterday, largely seen as a positive step towards addressing critical trade issues, especially for biotechnology.
What it does: “The deal commits China to do more to crack down on the theft of American technology and corporate secrets by its companies and state entities, while outlining a $200 billion spending spree to try to close its trade imbalance with the U.S.,” reports Bloomberg.
What it doesn’t do: “It does nothing to address areas like what U.S. authorities have long claimed is China’s state-backed hacking of American companies and government institutions. Nor does it require the Asian power to reform the vast web of state subsidies that form the spine of its model of state capitalism and have helped fuel the rapid growth of Chinese companies internationally,” continues Bloomberg.
What about tariffs? They stay in place for now, though there won’t be any escalations—and if China behaves and holds up their end of the bargain, Trump said he’ll think about removing them in phase two.
What’s in it for biotech? While we’re still reviewing the details, we’re pleased to see the agreement includes important commitments for agricultural biotechnology, biopharma, and GM microorganisms—including an agreement from China to speed up review of products like genetically modified seeds and crops, which face long delays—as well as commitments related to forced technology transfer and IP.
But one caveat: At the crux of the deal, China’s theoretically agreed “to purchase at least an additional $12.5 billion worth of agricultural goods in 2020 and at least $19.5 billion over the 2017 level of $24 billion in 2021”—but commitments are based on “market conditions,” explains Reuters. Basically, TBD whether China buys or does what it says it will and what that means for the next phase.
To sum it up: “What we really need to see is how China implements this,” said Matt O’Mara, BIO’s VP for International Affairs.