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U.S.-China Trade Deal: What’s in (and Not in) the Agreement

President Trump’s long-awaited trade deal with China includes some significant changes to the economic relationship between the world’s largest economies.

The agreement signed Wednesday includes some victories for Mr. Trump: China has committed to buy an additional $200 billion of American goods and services by 2021 and crack down on business practices that the Trump administration has criticized. But text of the accord does not provide enough information to determine how it will work in practice.

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The Parties recognize that the United States produces and can supply high-quality, competitively priced goods and services, while China needs to increase the importation of quality and affordable goods and services to satisfy the increasing demand from Chinese consumers.

Mr. Trump said his deal is a boon for farmers, who have been among the hardest hit by his trade war. The deal includes significant commitments from China to buy agricultural products, as well as airplanes, pharmaceuticals and oil and gas.

China’s commitment to purchase additional American exports is based on 2017 levels, and includes $52.4 billion of energy exports, $32 billion of agricultural commodities, $77.7 billion of manufactured goods and $37.9 billion of services.

Although American businesses and farmers will be pleased by those commitments, China is only agreeing to make purchases for the next two years and is vague about what happens thereafter. The agreement says the countries “project that the trajectory” of increased purchases would continue through 2025, but it remains to be seen how it will actually play out. The shopping list also leaves several open questions: What happens to China’s existing contracts with other countries for products like soybeans? Can it get out of such commitments if there isn’t domestic demand? Will the purchases distort commodities markets?

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The Parties shall ensure fair, adequate, and effective protection and enforcement of intellectual property rights. Each Party shall ensure fair and equitable market access to persons of the other Party that rely upon intellectual property protection.

The theft of intellectual property was one of the Trump administration’s main reasons for starting a confrontation with China. Previous administrations have tried to get China to crack down on this practice with limited success.

Mr. Trump’s agreement seeks to make it easier to identify and punish such theft. For instance, the deal requires China to “enumerate additional acts constituting trade secret misappropriation,” including “electronic intrusions,” a reference to hacking of computer systems.

The agreement also aims to make it easier for companies to seek redress in China if they believe their trade secrets have been stolen. The pharmaceutical industry appears to have secured significant gains, including commitments by the Chinese government to do more to protect patent owners from copycats.

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To ensure prompt and effective implementation of this Agreement, the Parties establish the following Bilateral Evaluation and Dispute Resolution Arrangement (the “Arrangement”).

Among the biggest questions going in to the negotiations with China was how any agreement would be enforced. Having watched previous agreements with China fail to live up to their promise, many American experts and business executives were skeptical that the Trump administration could get China to keep the commitments it makes.

The new deal creates something called the Bilateral Evaluation and Dispute Resolution Offices to receive and evaluate complaints. The deal also includes an appeals process where issues can be elevated from midlevel officials all the way up to the offices of the United States trade representative and the vice premier of China.

If the United States or China believes that the other is acting in bad faith, either country can give written notice and withdraw from the deal. Of course, Mr. Trump has already made clear that under such a scenario he would impose more tariffs on Chinese imports, thus returning the two countries to a trade war footing.

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The Parties shall work constructively to provide fair, effective, and nondiscriminatory market access for each other’s services and services suppliers. To that end, the Parties shall take specific actions beginning with the actions set forth in this Chapter with respect to the financial services sector.

It’s not clear that the agreement gives the United States big new gains in financial services. In an attempt to defuse tension with the Trump administration, China had already moved in 2017 to give foreign firms more sway in its financial sector, and American banks and other firms have been taking majority stakes in Chinese ventures.

For years, credit card companies Visa, Mastercard and American Express sought entry into China. In the deal, China agreed to accept license applications by these companies, but it did not automatically grant them access to its market. Even if China did approve their applications, it is not clear that those businesses would make many inroads in the country’s advanced electronic payment system, which is dominated by domestic companies.

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The Parties shall refrain from competitive devaluations and not target exchange rates for competitive purposes, including through large-scale, persistent, one-sided intervention in exchange markets.

Mr. Trump has long been a critic of China’s currency policy, arguing that it weakens the renminbi to achieve a competitive advantage for its exports. Last year the Trump administration labeled China a currency manipulator, before removing the tag this week as a result of China’s new currency commitments.

The country has pledged not to competitively devalue its currency and has promised to be more transparent about its interventions in foreign exchange markets.

To accomplish this, China has agreed to make public disclosures about its foreign exchange reserves and its quarterly imports of goods and services, among other things. However, much of what China is agreeing to do is in line with commitments it has already made through the Group of 20 and its obligations to the International Monetary Fund.

Brad Setser, an economist at the Council on Foreign Relations, was unimpressed by the new currency provisions, pointing out that China is primarily promising things that it already does and that it will continue to be circumspect about its actual interventions. “Certainly it doesn’t provide the market with any new information about China’s actual currency practices,” Mr. Setser said.

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REALIZING that it is in the interests of both countries that trade grow and that there is adherence to international norms so as to promote market-based outcomes;

The trade war between China and the United States has weighed on the economies of both countries. The tensions appear to have sent a chill through the United States manufacturing sector. China’s exports to the United States have plunged.

The partial truce struck Wednesday could restore some confidence, and the Chinese purchases will help some sectors of the American economy, but the pact preserves the bulk of the tariffs on $360 billion of goods from China. Administration officials have said that they will not lift those tariffs until the countries manage to agree to a phase 2 agreement. Prolonged strains in the relationship could prompt American firms to spend less in China and vice versa.

Keith Bradsher and Ana Swanson contributed reporting.

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China Trade Deal Details Protections for American Firms

WASHINGTON — The trade deal that President Trump will sign on Wednesday includes commitments by China to curtail practices that American firms complain put them at a disadvantage and force them to hand over valuable intellectual property to Chinese firms, according to several people with knowledge of the deal.

Those concessions, along with China’s agreement to buy $200 billion worth of American goods and to allow greater access to its markets, are expected to be announced at a White House ceremony for the signing of the long-awaited trade deal.

As part of the agreement, China has promised to punish Chinese firms that infringe on or steal corporate trade secrets, satisfying a concern of American businesses. China will also refrain from directing Chinese companies to obtain delicate foreign technologies through acquisitions, including halting purchases by state-owned enterprises that “harm” American interests. American officials say Beijing has used the practice to leap to the forefront of advanced industries, like semiconductors.

Another primary concern of American companies — a requirement that they turn over technology as a condition of doing business in the country — is also addressed in the deal. China has agreed not to force companies to transfer technology, which it has done by requiring joint ventures with Chinese firms and forcing companies to license their intellectual property at low prices.

Trump administration officials say the deal to be signed on Wednesday is only the first step in talks that are expected to help cool tensions between the world’s two largest economies and start to stabilize relations after more than a year of escalating threats from both sides. Mr. Trump has said the second phase of the agreement would be negotiated “at a later date.”

To prevent China from violating the agreement, the administration will continue to have tariffs on $360 billion worth of goods, along with the threat of future tariffs if China reneges on its promises. The deal does not include any agreement for future tariff reductions, according to a spokesman for the Office of the United States Trade Representative.

The success of the deal hinges on whether China will follow through on its commitments on paper — something Trump administration officials and China hawks say it has failed to do in the past. Some critics say China’s promises appear both broad and vague and overlap with other changes it has been pursuing anyway.

Still, the concessions may go at least part of the way toward resolving some of the business community’s concerns about China’s treatment of foreign firms and the kind of unfair trade practices that Mr. Trump said his administration would end.

The agreement was “more positive” than expected, Myron Brilliant, the executive vice president of the U.S. Chamber of Commerce, said at a news conference in Beijing on Monday. He added that striking an agreement had calmed tensions in a long-running trade war.

“We are pleased from what we’ve heard,” Mr. Brilliant said.

Administration officials say the tariff threat gives the deal more teeth than previous pacts with China. But it also raises the possibility that both countries could wind up back in the same type of tit-for-tat trade war that has inflicted economic damage across the globe.

Text of the trade deal has not been made public in either English or Chinese. It appears to include significant concessions, but it remains to be seen how the pact’s legal language will translate into action.

For instance, China has yet to admit that it ever forced foreign companies to transfer technology to Chinese firms, said Derek Scissors, a resident scholar at the American Enterprise Institute. Reading the agreement from the Chinese perspective, he said, they have committed to continue doing the same thing they have always been doing.

“We’ve had the Chinese agree in this public fashion to things we think were important before, and it hasn’t made a difference,” Mr. Scissors said.

Clete Willems, a partner at Akin Gump who helped to advise on trade policy until he left the administration last year, said the deal would fulfill three of the four major conditions laid out in the administration’s initial report that justified tariffs on Chinese goods. That included a requirement that China not direct its companies to acquire sensitive foreign technology.

Mr. Willems said the deal also contained new language protecting trade secrets, including a promise to set up judicial proceedings and criminal penalties for Chinese entities that steal confidential business information. It would also provide greater patent protection for the pharmaceutical sector.

The one major concern outlined in the administration’s report that was not addressed in the trade deal is cybertheft, Mr. Willems said. China had rebuffed American demands to include promises to refrain from hacking American firms in the text, insisting it was not a trade issue.

“We didn’t fix every single problem with China in this agreement, there is no question about that,” Mr. Willems said. “But what was done is really significant.”

Some analysts have expressed skepticism that a broad threat of tariffs on the overall Chinese economy would really deter Chinese companies bent on gaining a technological edge by stealing trade secrets.

Senator Chuck Schumer, the New York Democrat, sent a letter to Mr. Trump on Tuesday expressing “serious concern” about the potential for entering into a weak trade deal.

“China pledging to make short-term purchases of American goods will not address the fundamental problems that undermine long-term U.S. economic opportunity, prosperity, and security,” he said.

The Trump administration itself has cited China’s failure to live up to its agreements. In March 2018, the Office of the United States Trade Representative detailed a pattern of failed promises by the Chinese government to no longer force foreign companies to transfer technology to Chinese firms. China had failed to live up to that commitment “on at least eight occasions since 2010,” the trade office said.

The deal also includes large purchasing agreements that Mr. Trump has said will raise exports and shrink the American trade deficit with China, but that experts say might be hard to achieve.

As part of the agreement, China has committed to purchasing an additional $200 billion of goods over the next two years. That total includes $50 billion of new oil and gas exports, $32 billion of new agriculture, $78 billion of additional manufactured goods and $38 billion of new services, according to three people briefed on the deal.

Some trade experts have said the agricultural export commitments, which would translate to $16 billion in new shipments a year, would be difficult to meet without rerouting shipments to other countries.

But the targets for manufacturing and services, which include tourism and education, may be even harder. The number of Chinese students coming to the United States has been trending downward. And exports of manufactured goods, which will include Boeing airplanes, medical devices, automobiles and auto parts and factory equipment, are set far above current levels.

The agreement also includes substantial changes to Chinese regulations surrounding food, which Robert Lighthizer, Mr. Trump’s chief negotiator, discussed in a briefing with reporters in December. The changes will reduce barriers for products including meat, poultry, pet food, seafood, animal feed, baby formula, dairy and biotech, likely increasing American exports to China in those categories.

The first-phase agreement does not address some of the administration’s bigger concerns about China’s economic practices, including its use of subsidies and state plans to build domestic industries that flood the global market with low-priced products, often driving American competitors out of business. Critics say the practice has undermined American industries like steel and solar panels, and could prove detrimental to high-tech manufacturers of electric vehicles, computer chips and robots.

The Trump administration, which had hoped to curtail state subsidies as part of a trade deal, tried to head off criticism on Tuesday morning by announcing progress on a multilateral effort to address these practices.

Mr. Lighthizer met with ministers from Japan and the European Union in Washington, and resolved to press for changes at the World Trade Organization that would ban many of the subsidies that China provides to its industries.

He said the three would work together to restrict a variety of unfair subsidies and funds provided through state-owned enterprises, which the W.T.O. had previously ruled were not subject to its subsidy rules. Both are practices China has relied on.

Jennifer Hillman, a trade expert at the Council on Foreign Relations who has worked at both the trade office and the W.T.O., said the statement represented “great promise to correct one of the major problems with the W.T.O. rules: its inability to discipline subsidies.”

“What remains to be seen is whether these good ideas can be brought into a formal agreement that is binding on China and others,” she said.

Keith Bradsher contributed reporting from Beijing.

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New E.U. Trade Chief on a Quest to Fix Relations With U.S.

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Europe’s new trade commissioner arrived in Washington on Monday on a mission to prevent the Trump administration from ruining the European economy.

But with trans-Atlantic relations already at a low point, Phil Hogan, a blunt-talking, physically imposing Irishman, will probably do well if he can simply prevent things from going any further downhill.

As Mr. Hogan begins a four-day visit, his first as trade commissioner, the list of reasons for the United States and Europe to be angry at each other is long and getting longer.

The United States, upset at France’s plans to tax technology companies, is threatening tariffs that would double the price of imported French wine. The European Union accuses the administration of paralyzing the system for resolving trade disputes, ushering in an era of conflict and disorder.

Punishing tariffs on European steel and aluminum remain in place. The administration continues to dangle the threat of duties on European cars, which would be economically devastating for the Continent. Europeans are deeply alarmed by what they regard as the president’s recklessness in the Middle East.

“The current state of E.U.-U.S. relations isn’t good and I don’t think it’s likely to get better anytime soon,” said Peter Chase, senior fellow at the German Marshall Fund of the United States in Brussels.

Mr. Hogan brings a different set of skills than Cecilia Malmstrom, whom he succeeded as the European Union’s top trade official at the beginning of December. Some in Brussels think his rawer style will make him a better match for the current occupant of the White House.

Mr. Hogan recently said, for example, that by leaving the European Union, the British people were trading in a Rolls-Royce for a used sedan. The statement was seen as particularly cheeky coming from an Irishman who will also be responsible for negotiating a trade deal with Britain as part of its withdrawal from the European Union, a herculean task.

“He is more direct,” said Luisa Santos, the director for international relations at BusinessEurope, an industry group. Gender may also play a role, Ms. Santos said. There is a widespread perception in Washington and Brussels that Trump officials were not comfortable with Ms. Malmstrom, an assertive Swede.

“The fact that he is a man” works in Mr. Hogan’s favor, Ms. Santos said. “He is probably the right person for this moment.”

But it’s unclear whether Mr. Hogan, who declined requests for an interview, will have any more success than Ms. Malmstrom at repairing the largest trade partnership in the world, worth $1 trillion a year.

His agenda includes meetings with Robert Lighthizer, the United States trade representative; Steven Mnuchin, the Treasury secretary; and Wilbur Ross, the secretary of commerce. To varying degrees, all support the president’s hard line on trade relations.

A 6-foot-5 former farmer from Kilkenny in southern Ireland, Mr. Hogan spent much of his political career in the trenches of Irish domestic politics, helping to build the centrist Fine Gael party into Ireland’s strongest bloc. He was Fine Gael’s director of organization in the early 2000s, and later head of the party’s national election campaign.

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“Phil knew every candidate, he knew every constituency,” said Ciaran Conlon, a former Fine Gael spokesman who is now director of public policy for Microsoft in Ireland.

Mr. Hogan’s feel for retail politics served him well, Mr. Conlon said, when he later became the European commissioner responsible for agriculture, the job he held until December.

Mr. Hogan organized town meetings with farmers around Europe, and attended funerals of prominent farm leaders. His approach helped to combat the European Commission’s reputation for aloofness.

“Politics is about personal relationships and Phil understands that,” Mr. Conlon said.

As agriculture commissioner, Mr. Hogan was often involved in trade talks, and gained a reputation for being canny and well prepared. Farm products are typically the most politically sensitive component of trade deals. A plan to reach a more comprehensive trans-Atlantic trade deal early on in Mr. Trump’s tenure fell apart over disagreements about how to address agriculture.

“He’s a very, very good negotiator,” said Sorin Moisa, a former member of the European Parliament from Romania and former European trade official.

Ms. Malmstrom managed to prevent the president from carrying through on a threat to penalize European car imports, which would be devastating for the Continent’s economy.

But little remains of the optimism that followed a meeting in July 2018 between Mr. Trump and Jean-Claude Juncker, then the president of the European Commission.

The two men said they would work to reduce tariffs to zero and eliminate regulations that hinder trans-Atlantic trade. The European Union and the United States are each other’s largest trading partners, and there is general agreement that both sides would benefit from lower trade barriers.

Progress has been modest at best. In July, they agreed to recognize each other’s inspections of factories that produce pharmaceuticals. The agreement eliminates the need for duplicate inspections and should cut the cost of drug production.

But in most other ways, the relationship has only turned more sour.

The Europeans accuse the United States of crippling the World Trade Organization by blocking appointments of new members to a crucial panel that hears appeals in trade disputes. The panel effectively ceased to function in December when several members’ terms expired.

Without a system to enforce trade rules, Mr. Hogan told members of the European Parliament last year, “Well, then, there isn’t any point in having agreements.”

“We have asked the U.S. to engage with us and they have refused to do so,” he said.

As the norms that have governed world trade crumble, countries are responding to disputes with tit-for-tat retaliation and displays of power.

After France said it would impose a so-called digital tax on technology companies — a measure clearly aimed at Silicon Valley — the United States threatened 100 percent tariffs on French wine, handbags, cookware and other products.

“When sides take unilateral actions that harm the other side, that are inconsistent with international norms, the other side has a right to be angry,” said Clete Willems, a partner at the law firm Akin Gump who was an economic adviser in the White House until last year. “That’s where we are with the E.U. now.”

There is plenty of ire to go around. The Europeans are angry at the United States for imposing sanctions on companies helping to build the Nord Stream 2 gas pipeline between Russia and Germany.

Both sides are mad about what they say are illegal subsidies to their flagship aircraft manufacturers. The United States is putting $7.5 billion in tariffs on European products in retaliation for illegal aid to Airbus, and the Europeans are expected to retaliate in kind for what they say are illegal subsidies to Boeing.

Mr. Hogan will try to convince his American counterparts that Europe and the United States should work together to rein in China, in part by fixing the W. T.O. He also plans meetings on Capitol Hill, where his Irish-ness is likely to play well.

Nobody is expecting a major breakthrough, but there is some hope that the trip could signal the start of a gradual improvement in the trade relationship.

“I don’t think either side wants this to go back into a deep hole again and spiral into negativity,” said Susan Danger, chief executive of the American Chamber of Commerce to the European Union. “Both sides want to kick off in a positive way.”

Ana Swanson contributed reporting.

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U.S. and France Race to Conclude Digital Tax Talks as Tariff Threat Looms

WASHINGTON — The United States and France are racing to reach a compromise in a digital tax dispute that could result in hefty American tariffs on French wine, cheese, handbags, cookware and more.

Speaking in Paris on Tuesday, Bruno Le Maire, the French finance minister, said that he had spoken on Monday with Steven Mnuchin, the Treasury secretary, about a new French tax on Facebook, Google and other American technology giants. The tax has angered the Trump administration and prompted the United States to propose a range of retaliatory levies on French goods.

Mr. Le Maire said he and Mr. Mnuchin would redouble their efforts to find a compromise before their meeting this month on the sidelines of the World Economic Forum in Davos, where they will be joined by United States trade representative, Robert Lighthizer.

“I made it clear to Steven Mnuchin that as long as we are discussing, as long as we are negotiating, there could not be any American sanctions,” Mr. Le Maire said, according to an English translation of his comments provided by the French Embassy.

Efforts to reach a resolution came as representatives from a variety of industries that could be hit by tariffs gathered in Washington to argue against the administration’s plan. Executives from industries including handbags, cookware, porcelain, champagne and cheese described the prospect of American tariffs of up to 100 percent on French imports as a threat for their businesses and begged to be exempt.

“How can you just gut my family business?” Mary Taylor, the founder of a company that brings European wines to the American market, asked a panel of government officials in a hearing room south of the Capitol. “I’ve read about farmer subsidies. Will my family be subsidized?”

“Never could I imagine my business would be threatened like this from the federal government,” Ms. Taylor added. “What do digital services have to do with European wine? Nothing.”

The Trump administration has turned to tariffs as a source of leverage in trade negotiations and other diplomatic matters. The threat of painful levies has coaxed China, Mexico, Canada and other countries into signing trade agreements with the United States, but the Trump administration has yet to make much progress negotiating new trade terms with Europe.

Instead, the trans-Atlantic trade relationship has become increasingly strained, with Mr. Trump criticizing the European Union for running a trade surplus with the United States and accusing it of being “worse than China” in its trade practices.

In November, the Trump administration stepped away from a major escalation in relations as it quietly allowed a deadline to impose tariffs on European cars to expire. But it has moved ahead with other tariffs on European products — some in response to a dispute over aircraft at the World Trade Organization, and others in response to France’s new tax on digital services.

Like other European countries, France has long been frustrated that platforms like Google, Facebook and Amazon have large digital presences and conduct a lot of commerce in their country, but pay few taxes because they have little physical presence there. In July, France passed into law a 3 percent tax on the revenue some companies earn from providing digital services to French users.

American officials have called the tax “discriminatory” and “unreasonable” and detailed a plan to retaliate by imposing tariffs on porcelain, soap, handbags, wine, yogurt, lipstick and other French products, though they have not specified the rate or total dollar value of the tariffs that might be imposed.

A spokesman for the United States trade representative said the administration was now considering duties of up to 100 percent on certain French products, as well as fees or restrictions on French services, commensurate with the level of harm to the American economy that results from the tax. A Treasury spokesman declined to comment.

International negotiators have been trying to head off such conflicts by developing a broader framework for digital taxes. Negotiations are continuing at the Organization for Economic Cooperation and Development, but the slow pace of the talks has frustrated European officials.

On Tuesday, Mr. Le Maire met with Phil Hogan, the new European trade commissioner, who will travel to the United States next week to discuss how to respond to potential American tariffs. If no deal is struck at the O.E.C.D. and American tariffs are imposed, France has vowed to retaliate with its own levies, as well as call on the European Union to move ahead with a broader European project for digital taxation.

Mr. Le Maire said that if the United States imposed tariffs during the negotiating period it would effectively end the talks. He added that other European countries were in the process of establishing similar taxes, with about 15 countries around the world planning to impose their own national digital tax by June.

“If the Americans start to hit France with sanctions because it has introduced national digital taxes, it will have to go tomorrow to also hit Italy, Austria, Great Britain,” Mr. Le Maire said. “We will enter a commercial conflict between the United States and Europe.”

Mr. Trump and many of his supporters have argued that tariffs on foreign goods do not have much effect on American companies, and have largely dismissed complaints like those shared at Tuesday’s hearing. Other officials have acknowledged that the tariffs impose some costs on American businesses, but have argued the price is worth it to secure other changes.

The businesses that are paying the levies have protested, and loudly.

Ms. Taylor, the wine expert, said she had woken up at 2 a.m. that day to get to Washington, and insisted on testifying before the panel disbanded early, before an afternoon snowstorm. Her passionate testimony was followed by cheers and applause from dozens of wine merchants in the audience of a normally staid hearing room.

Other executives complained Tuesday that the tariffs would cause them to put the brakes on hiring or expansion plans, and could force their businesses to close altogether.

Faye Gooding, the recently retired chief executive of Le Creuset of America, called the tariff “an existential threat” to the company’s existence in South Carolina.

Le Creuset’s candy-colored Dutch ovens — which feature prominently on many American wedding registries — are manufactured in France. But the company employs more people in warehouses and retail locations in the United States than in any other country, Ms. Gooding said. A tariff of up to 100 percent on the company’s premium cookware could prove catastrophic for its about 900 American employees, including around 300 in South Carolina, she said.

Benjamin Aneff, the managing partner of Tribeca Wine Merchants, called the prospect of a tax on French wine and champagne the “greatest threat to the industry since Prohibition.” Even if wines originate in France, they are typically sold in the United States by American distributors and retailers, businesses that would be hurt by higher taxes, he said.

Nate Herman, the vice president of international trade at the American Apparel & Footwear Association, which represents makers of handbags that would be hit by the tariffs, said that his members had been “baffled” at becoming embroiled in a digital sales tax dispute.

The industry agrees with the government’s objective of eliminating the digital services tax, he said. “We just don’t agree with the U.S. government’s proposal to accomplish that goal — imposing taxes on handbags.”

Liz Alderman contributed reporting from Paris.

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Philippine Peasants Were Promised Land. Staking a Claim Can Be Deadly.

SAGAY CITY, Philippines — On the day the gunman murdered her husband, Elza Balayo was planning a treat for her five children, a fish to accompany the rice that was typically their sole lunch.

The couple was walking home from the market in the midday heat with their young son when a shot pierced the silence. She recognized the attacker, she would later tell the police. He managed the sugar cane plantation at the northern end of the island of Negros, where her husband’s family had lived and labored for more than 70 years.

She had no doubt why he pulled the trigger: To punish her husband for the audacity of seeking to own a patch of the soil.

“He gambled his life to own the land,” she says.

For decades, Philippine leaders have vowed to attack a glaring economic inequality framing life in this former American colony — the dominance of a handful of landowning families, and the landlessness of tens of millions of farmers who till the soil in near-feudal conditions. The current president, Rodrigo Duterte, took office more than three years ago promising to liberate rural Filipinos from poverty by distributing land to farmers.

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Although Mr. Duterte has fashioned himself a man of the people with a bloody crackdown on criminality, he has evaded one crucial populist fight. He has not challenged the monopolistic grip of the landowners. He has instead fortified their control, reinforcing the conditions that gave him an opening to take power.

Those conditions are stark. More than 38 percent of rural-dwelling Filipino children suffer stunted development, despite living on some of the most fertile land on earth. More than one-in-five people in this country of 108 million are officially poor, even as the national economy has expanded rapidly in recent years.

To be born into the ranks of the Filipino poor is to be condemned to the fatalistic knowledge of perpetual hardship, and the dangerous futility of seeking improvement. Landowners dominate local governments, while deploying private armies to keep control.

Mr. Duterte vowed to attack this state of play. With his penchant for deriding opponents and proclaiming his own fearlessness, he has drawn comparisons to President Trump. Like right-wing populists around the world, his political fortunes have been lifted by rage toward the establishment.

In Italy, Matteo Salvini’s League party has surged in popularity as an answer to globalization. In Sweden, right-wing extremists have been propelled by anger over immigration. In India, Narendra Modi’s Hindu nationalist party has demonized Muslims.

In the Philippines, Mr. Duterte has focused on criminals as the fundamental threat to daily life, exhorting vigilantes to “slaughter them all.” On his watch, the police have executed thousands of people Mr. Duterte’s government says are drug dealers — a characterization that human rights groups dispute.

But during his tenure, job growth has slowed while prices for commodities like rice have soared. The wealthiest regions of the country have pulled further away from the poorest.

More than a year after she was consigned to widowhood, Ms. Balayo has lost hope that she will ever see justice for her husband’s murder. Her report to the police has yielded no meaningful investigation, she says. No one has been arrested.

She registers disgust at the mention of Mr. Duterte’s name. “He just talks and talks,” she says. “It’s been so long, and we still don’t have our own land.”

The president initially entrusted the cabinet-level job of overseeing land redistribution to Rafael V. Mariano, a former member of Congress and farmer’s rights activist. But Mr. Mariano was soon dismissed. In an interview, he accuses the president of caving to pressure from landowners.

“He showed his true class position,” Mr. Mariano says. “He is not really serious and sincere in addressing the fundamental problem of the Filipino peasant, which is landlessness.”

Mr. Duterte remains extraordinarily popular, with approval ratings near 80 percent. Yet among poor farmers, he is increasingly viewed as a threat, especially as he intensifies a decades-old battle against a stubborn Communist insurgency, the New People’s Army. The guerrillas have long drawn recruits from landless peasants, who have embraced armed struggle as the means of acquiring land.

In October, the Philippine National Police and military arrested 57 people in a raid on the island of Negros, later charging some with illegal possession of firearms. Among those detained were three teenagers from Hacienda Silverio, a sugar plantation. They had been rehearsing a play about a Filipino revolutionary who fought the colonial Spanish, the Americans, and the landlords.

Weeks later, a truckload of government soldiers arrived at the plantation, or hacienda, in fatigues, bearing assault rifles. They warned the farmers that participating in the play was tantamount to pledging allegiance to the guerrillas.

“When people continue to agitate for what Duterte promised them, he turns against them,” says Dioscoro Andrino, a local farmer. “They look at us like we are the enemy.”

When Mr. Duterte first took office, he expressed sympathies with the Communists, while promising to forge peace with the New People’s Army.

He affirmed one of the insurgency’s key aims — putting land in the hands of poor farmers.

To underscore his designs, he installed Mr. Mariano as Secretary of Agrarian Reform.

The son of landless farmers, Mr. Mariano had spent three decades campaigning for land distribution. As secretary, he instituted an order allowing transfers to proceed even as landowners pursued legal challenges.

In doing so, the new administration was confronting a potent historical legacy. For centuries, formidable interests had battled over the fruitful soils of the Philippine archipelago.

Commodities like sugar and coconuts were central to the colonial designs of the Spanish and the Americans.

As the Philippines claimed independence in 1946, Washington required that the fledgling country keep its currency strong against the dollar, ensuring continued imports of American-made manufactured goods.

“The big Filipino families, the oligarchies, are not able to transition away from agriculture because they can’t transition to manufacturing,” says Lisandro E. Claudio, a Southeast Asian historian at the University of California, Berkeley. “This is why they became so grubby about their landholdings.”

The American-backed dictator Ferdinand Marcos pursued land reform as part of a strategy to attack the Communist insurgency. But Washington urged him to respect property rights.

Notoriously corrupt, Mr. Marcos was swept into exile by the 1986 People Power demonstrations. His successor, Corazon Aquino, oversaw the drafting of a new constitution that explicitly called for agrarian reform.

Ninety percent of the land was then controlled by 10 percent of the population. Under a law signed by Ms. Aquino in 1988, an area roughly the size of Portugal was to be distributed to farmers over the following decade.

On paper, the government achieved substantial progress. On the ground, landowners gamed the process, officially selling holdings while maintaining control.

At one of the largest plantations on Negros, Hacienda Balatong, which stretched over 1,400 hectares (nearly 3,500 acres), the landowner fended off a government-imposed transfer through legal creativity.

The land had been owned for decades by a Marcos crony, Eduardo “Danding” Cojuangco Jr. Some 2,000 families lived there. Farmers earned as little as 100 pesos per day (less than $2).

In the late 1990s, the Cojuangcos persuaded farmers to agree to a so-called voluntary land distribution to pre-empt government action. The farmers received title, while immediately leasing the land back to the Cojuangcos in exchange for cash payments of 10,000 pesos a year.

For most farmers, this was too much to pass up.

“If we don’t work, we don’t eat,” says Maria Luisa Malvez, 51, whose husband’s family had lived on the plantation for at least four generations. “The Cojuangcos just wait for the harvest to earn.”

Her in-laws lived in a concrete block home where they had raised eight children, though five had died of various ailments not helped by abject poverty. Their corrugated aluminum roof was rusting through, even as their concrete floor was spotless.

The cash payments lifted their income by half. Twice a year, her father-in-law, Paulino Malvez, hopped on trucks the Cojuangcos dispatched to the hacienda to bring farmers to the payment center — a cockfighting arena next to a mansion shrouded in forest cover.

Mr. Malvez had left school after the fourth grade. He could not understand the agreement he was required to sign. But when a human rights lawyer, Ben Ramos, read the terms in 1999, he urged the family to stop accepting the money. The arrangement was a sham, he told them. It undermined future claims on the land.

“The Philippines is still really a semi-feudal democracy,” says Leonardo Montemayor, a former secretary of agriculture. “We have a democratic veneer. We have judges, trials, and due process. But the longer the due process takes, the longer it takes for a farmer to secure substantial justice.”

The arrival of Mr. Mariano at the Department of Agrarian Reform appeared to mark a new era. He put landowners on notice — especially on Negros, calling the island “the bastion of landlordism” where “farmworkers are still enslaved by hunger and poverty, and are being threatened, shot at and massacred by goons and soldiers.”

To advise him, he enlisted Mr. Ramos, the local human rights lawyer who represented the farmers at Hacienda Balatong.

Mr. Ramos advanced a petition seeking to annul the leasing arrangement and parcel out the estate to the farmers. The petition argued that the Cojuangcos had obtained the land illegally, through their association with Mr. Marcos.

Mr. Mariano says his department was moving to approve the petition. An executive committee convened by Mr. Duterte had already accepted his recommendation to break up the estate.

But in September 2017, less than 15 months after Mr. Duterte appointed him, Mr. Mariano was out. A congressional panel stacked with Duterte loyalists voted to deny his confirmation.

Over the course of a two-day hearing in Manila, Mr. Mariano found himself under sustained attack from the landowners he had been targeting — especially allies of Mr. Duterte in Davao, a city on the island of Mindanao, where the president had previously been mayor.

He was questioned about his transfer of land to farmers at a plantation owned by Lapanday Foods Corp., a banana exporter. A company lawyer was married to the president’s daughter, Sara Duterte, the current Davao mayor.

She and other local officials as well as the secretary of national defense submitted a written statement claiming that Mr. Mariano had aided the New People’s Army in area attacks, he says.

“There was a strong lobby of the big landlords, compradors, oligarchs and bureaucrats,” Mr. Mariano says. A spokesman for Mr. Duterte did not respond to questions.

James Castriciones, who had worked on the president’s campaign, took over as secretary. He promptly overturned Mr. Mariano’s order allowing land transfers to proceed in the face of court challenges. Mr. Castriciones did not respond to questions about his appointment or the overall thrust of the land reform undertaking.

The following year, Mr. Ramos, the lawyer, was standing on the side of the road when two men on motorcycles swept in and opened fire, killing him. He was the 34th lawyer killed since Mr. Duterte became president. In a speech in 2017, the president exhorted the police to persevere in the face of human rights lawyers probing the killings of alleged criminals. “If they are obstructing justice, you shoot them,” Mr. Duterte said.

Farmers at Hacienda Balatong complain that their petition has essentially disappeared.

“Duterte made these promises,” says Maria Luisa Malvez. “Nothing has happened.”

On the day the Malvez family recounts this, farmworkers at the hacienda stumble on a grisly sight as they hack away at the sugar cane: Two men lying in the dirt, dead. Two days earlier, another body had been fished out of a muddy river, bloated and bloodied.

As a half-dozen farmers gather in front of the Malvez home, everyone assumes they know what happened.

The men were migrant workers from southern Negros. They must have grown weary of meager pay and filthy living conditions. They must have bolted for home, leaving the contractor to answer to an angry farm manager about their disappearance before the harvest was done.

They must have been running for their lives.

On the local radio, an announcer briefly mentions that three bodies have been found at the hacienda and adds the conclusion of a police report: The men died of “natural causes.”

Plantation owners tend to dismiss land distribution as a failure. Farmers lack the money to tend their parcels, so they often sell land back to previous owners, resuming their jobs as farmworkers.

“They are happy enough to work for us,” says Gerro Locsin, who owns a sugar plantation in Negros. “There’s no problem.”

Eduardo Balayo had a problem.

His family was miserably poor. The only solution he could imagine was to own a piece of Hacienda Ubamos.

“He saw it as a way out of poverty,” says his widow. “The dream was that the kids could get an education and not follow what we are.”

Mr. Balayo earned about 800 pesos a week (less than $16). The family ate meat only at Christmas. They fashioned their house from bamboo, palm fronds and plastic rice sacks. They had no electricity. The toilet was the surrounding fields. Keeping their children in school was a constant struggle.

“Sometimes they have to walk barefoot because we can’t afford shoes,” Ms. Balayo says, her voice halting as she swallows a sob. “They have assignments demanding things I can’t buy — colored paper, crayons, scissors.”

Mr. Balayo organized a local farmer’s association to pursue land distribution, submitting the paperwork to the agrarian reform department in 2013. He and his older brother, Welter, and seven other households had been cleared as qualified beneficiaries of the 12.3-hectare estate (about 30 acres).

Each was to receive 1.3 hectares, enough to yield more than 60 tons of sugar cane a year, Ms. Balayo says. After expenses, they could fetch at least 120,000 pesos (about $2,350). Their income would double, allowing them to keep their children in school.

But in seeking the land, Mr. Balayo was taking on local authority. The hacienda was controlled by Narciso L. Javelosa, the vice mayor of Sagay City, through a lease with the landowning family, according to the Department of Agrarian Reform. Mr. Javelosa did not respond to messages left at city hall.

The vice mayor regularly visited the property, driving through in a pickup truck, residents say. Men walked the rutted trails, their faces obscured by black balaclavas, and pistols tucked into their waist bands.

“I was very worried,” Ms. Balayo recalls. “But my husband said, ‘I will not stop until we get this land.’”

Three times, the agrarian reform department dispatched surveyors to the hacienda, accompanying them with police officers. Three times, armed men turned them away.

“There are so many properties” the agency cannot enter, says Teresita R. Mabunay, who oversees the north of Negros for the agrarian reform department.

One day last year, as Mr. Balayo was walking on a muddy track through the plantation, the farm manager, Raymundo Jimenez, blocked his path in a menacing fashion, Ms. Balayo says.

Months later on Sept. 15, 2018, as they returned from the market with a fish, Mr. Jimenez opened fire, she says, an account she relayed to the Sagay City police, as confirmed by an official police report. The gunman pointed the pistol at his face and unleashed eight more bullets, she says.

When the police arrived, Ms. Balayo identified the gunman as Mr. Jimenez and told them where he lived, but he was not home, she says. She assumes the police are not trying to find him. “He works for the vice mayor,” she says.

As she recounts the experience, men appear on a hillside, peering down. “Those are the goons,” a villager says.

Mr. Balayo’s older brother, Welter, took up the mantle of seeking the land. On April 20, 2019, as he was working in a rice field just outside the hacienda, he, too, was shot dead.

In August, the regional office of the Department of Agrarian Reform ruled that the seven remaining farmers were no longer qualified to take over the land. The order affirmed a motion from the landowners that accused the farmers of “forcible entry.”

The order cited an investigation conducted by the department’s Sagay City office, then run by Hannah D. Jubay. In an interview, Ms. Jubay, who was recently transferred to a nearby district, says she was powerless to question a police report concluding that farmers had entered a field they did not own.

A gold etching of Jesus hangs on her wall, looking down on her desk, next to a sign that says: “Vision: A Just Safe and Equitable Society that Upholds the Rights of Tillers.”

Hadn’t this case collided with that spirit?

Ms. Jubay looks pained.

“The landowners are very resistant,” she says.

Jason Gutierrez contributed reporting.

Source:

NYT > Business


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