US-China trade agreement to hit EU: report

The ceasefire in the US-China trade war will hit the European Union. Most strongly in Germany, and thus indirectly in Poland, as pointed out the Polish Economic Institute (PIE).

The Economic and Trade Agreement (ETA), which is the first stage in a broader trade agreement between the two countries, primarily includes China's commitments to refrain from devaluing the yuan for commercial purposes. And also an additional purchase in the years 2020-2021 of US goods and services worth $200 billion. - of which $162 billion will fall on goods and $38 billion for services.

PIE indicated that the agreement also provides for the purchase of US agricultural products by the Chinese side, including meat, cereals, oilseeds ($32 billion), energy resources ($52 billion) and selected services ($38 billion).

In the opinion of PIE experts, the entry into force of the ETA agreement may have the classic effects of shifting trade flows. To meet their obligations to the US, Chinese importers are likely to reduce their imports from other foreign suppliers, including from EU countries.

According to the Institute, the sale of Polish goods in China may, however, suffer relatively little. Among EU countries, Poland had one of the lowest shares of products covered by the ETA agreement in exports to China – in 2018 they accounted for less than 44 percent.

(PAP)