White House forms China trade deal watchdog office

The White House has initiated a new office to ensure that China sticks to its commitments under the “Phase One” trade deal reached between the U.S. and China on Jan. 15.

The office, which will be administered by the Office of the U.S. Trade Representative (USTR), will also work with China’s Bilateral Evaluation and Dispute Resolution Office to address disputes that arise over the trade deal’s implementation.

Deputy U.S. Trade Representative Jeffrey Gerrish has been appointed by the Trump administration to lead the new office.

Chapter 7 of the U.S.-China Phase One economic and trade agreement called for transparent implementation of the agreement and a specific means to allow the two parties to resolve disputes in a “fair and expeditious manner,” USTR said.

“This arrangement requires regular bilateral meetings to discuss implementation matters, with the parties meeting on a monthly basis at the ‘designated official’ level, on a quarterly basis at the Deputy United States Trade Representative-Vice Minister level, and on a semi-annual basis at the United States Trade Representative-Vice Premier level,” USTR said in a statement on Feb. 14, when the Phase One trade deal with China officially took effect.

Through the new office, a party can initiate a dispute by submitting an appeal to the other country’s Bilateral Evaluation and Dispute Resolution Office. Consultations will then take place to try to resolve the dispute and can be escalated, if necessary, to the highest levels of the offices’ leadership. The dispute resolution process should take no more than 90 days.

“If the dispute is not resolved through these consultations, the complaining party is allowed to take proportionate responsive action that it deems appropriate after providing advance notice to the party complained against,” USTR said. 

In addition, under the Phase One trade deal, the U.S. and China agreed that the complaining party in a dispute is not required to provide information that could identify any company at issue or confidential business information.

The Jan. 15 trade deal committed China to purchasing more than $200 billion in U.S. goods, which includes $50 billion in farm products, $75 billion in manufactured goods, $50 billion in energy commodities and $40 billion to $50 billion in services.

China and the U.S. expect to further reduce import tariffs on each other’s products when they begin negotiating “phase two” of the trade agreement in the coming months.