What's in phase one U.S.-China trade deal

Stocks have rallied in recent weeks on optimism over trade between the U.S. and China and this week could mark a milestone with the expected signing of the phase one deal. CNBC's Eamon Javers reports. U.S. and China trade representatives will end years of intense bilateral negotiations with a “phase one” deal on Wednesday that promises billions of dollars’ worth of agricultural purchases and the beginning of reforms to China’s longstanding practice of forced technology transfer. For all the pomp and circumstance expected at the signing ceremony — and repeated assurances from American negotiators — many are still unsure of exactly what the two nations are agreeing to. On paper, the deal includes a “dramatic expansion of U.S. food, agriculture and seafood product exports” as well as an agreement by China to end its long-standing practice of forcing or pressuring foreign companies to transfer their technologies to Chinese companies, according to a U.S. Trade Representative document. The USTR has also said the deal reiterates U.S. opposition to currency manipulation and a commitment by China to buy at least $200 billion in U.S. exports over two years including manufactured goods, food, agricultural, energy products and services. Estimates of the value of goods by industry the White House believes Beijing will buy include about $80 billion in manufactured goods, $53 billion in energy, $32 billion in agriculture and $35 billion in services. “We have been going through a translation process that I think we said was really a technical issue,” Treasury Secretary Steven Mnuchin told Fox News on Sunday. “And people can see. This is a very, very extensive agreement.” Top negotiators, including Mnuchin, U.S. Trade Representative Robert Lighthizer, and others are expected to attend the signing on Wednesday in Washington. P.J. Quaid, a corn options broker at the CME Group in Chicago, said he’s eager to learn how the White House plans to enforce the tenets of the phase one deal if Beijing skirts its obligations. “This thing’s been a crazy roller coaster since it started. A lot of people have become pessimistic because a lot of the purchases they said they’re going to make seem hard to attain,” Quaid said. “If this thing comes in under expectations, you could see sell-off,” he added. “It’s been a rough time for people trading Ags.” The Office of the United States Trade Representative did not return CNBC’s request for comment. Others were cautious after a Chinese media report suggested that Beijing isn’t as upbeat on the prospect for future trade talks. Taoran Notes, a blog run by a state-owned newspaper called Economic Daily, published its first blog post in two months on Sunday. “We need to bear in mind that the trade war is not over yet. The U.S. hasn’t removed all the tariffs on Chinese imports and China is still imposing its retaliatory duties,” the blog wrote according to a CNBC translation. “There are still so many uncertainties ahead.” For Don Roose, president of Des Moines, Iowa-based brokerage U.S. Commodities, China’s commitments to farm purchases are key. “We’re anticipating $35 billion [of farm purchases] the first year and $40 billion in the second,” he said. “It doesn’t look like we’re creating any new world demand.” But unresolved, Roose said, is whether the Chinese will — after years of haggling — actually end up buying more U.S. farm goods than before President Donald Trump opened the trade spat nearly two years ago. Still, Roose said he was slightly more optimistic with a phase one deal nearly signed. “There’s always a question mark, but if they want to get to ‘phase two,’ they’re going to have to show some solid follow-through,” he said. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://www.cnbc.com/pro/?__source=yo... » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC #CNBC #CNBC TV