THE GIST of Editorial for UPSC Exams : 10 March 2020 (US China trade deal (Indian Express))

US China trade deal (Indian Express)

Mains Paper 2: International Relations
Prelims level:US China trade deal
Mains level: Significance of the US and China trade deal

Context:

• A protracted trade war between US and China has been going on since America slapped heavy tariffs on imported steel and aluminium items from China in March 2018, and China responded by imposing tariffs on billions of dollars worth of American imports.
• The dispute escalated after Washington demanded that China reduce its $375 billion trade deficit with the US, and introduce verifiable measures for protection of Intellectual Property Rights, technology transfer, and more access to American goods in Chinese markets.

Background:

• As per the IMF, the US-China trade tension was one factor that contributed to a significantly weakened global expansion late last year, as it cut its global growth forecast for 2019.
• It has exacerbated the uncertainty ...........................................

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Key highlights of the deal:

• In the backdrop of negative impact of trade tension, as mentioned above, US and China has signed the first phase of the trade deal to diffuse the tension. This includes:
• Intellection Property (IP) Protection and Enforcement,
• ending forced technology .............................................

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Analysis of the deal:

• The deal shows how the two countries can resolve their differences and find solutions based on dialogue. This historic agreement includes a major commitment by China to make significant reforms in a wide range of critical areas and to make substantial additional purchases of American goods and services in the coming years. It aims to resolve some longstanding American concerns about Chinese trade abuses.
• However, the accord appears to leave questions about how Washington and Beijing will enforce its terms and prevent further tensions.
• The deal fails to address structural economic issues that led to the trade conflict, does not fully eliminate the tariffs that have slowed the global economy, and sets hard-to-achieve purchase targets, analysts and industry leaders said.
• Although the deal could be a boost to U.S. farmers, automakers and heavy equipment manufacturers, some analysts question China's ability to divert imports from other trading partners to the United States.

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Prelims Questions:

Q.1)With reference to the Companies (Second Amendment) Bill, 2019, consider the following statements:
1. It would remove criminality under the Act in case of defaults which can be determined objectively.
2. It restricts the listing of Indian companies on stock exchanges in foreign jurisdictions.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer: ............................

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Mains Questions:
Q.1) US has recently signed up the first phase of a trade deal with China in a push to stop economic conflict. Critically analyse the deal in the light of the fact that a trade war has been going on for the past 18 months between these two countries thereby affecting the entire global trade.