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- There’s a 50% chance the U.S.-China “phase one” trade deal could survive its first year - IMA Asia
There’s a 50% chance the U.S.-China “phase one” trade deal could survive its first year - IMA Asia
There's a 50% chance the U.S.-China "phase one" trade deal could survive its first year - but that probability falls to 25% in the second year, a business consultant said.
Richard Martin, managing director at management consulting firm IMA Asia, said there are two reasons why the agreement could fall apart within those time frames: Limited success stories of government-mandated trade in the past, and provisions that allow the U.S. and China to walk away from their deal.
"There's a very poor track record on government-mandated trade flows working out and that's what we got right now," he told CNBC's "Squawk Box Asia."
Martin added that if there are disputes between the two sides, the deal allows the U.S. Trade Representative, currently Robert Lighthizer, to "pretty much determine when China's breaking the rules and inflict any penalty he wants." In return, China could walk away from the agreement, he explained.
"So that's not a very robust adjudication process. It says that if there's a problem, it could well end in the phase one package being dead," he said.
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