U.S. - China Trade: What Is A Memorandum Of Understanding?

February 19, 2019 05:00 PM
 
As the Chinese trade delegation makes their way to Washington, DC this week, negotiators on both sides aren’t hoping for a deal, they’re hoping for a memorandum of understanding.

As the Chinese trade delegation makes their way to Washington, DC this week, negotiators on both sides aren’t hoping for a deal, they’re hoping for a memorandum of understanding.

While many analysts are saying the inclusion of the words memorandum of understanding (MOU) in a statement from the White House signals we’re far from a deal, Pro Farmer policy analyst Jim Wiesemeyer said it could be a signal of progress.

“You have to have an overall MOU before you put flesh on it relative to getting a framework agreement, and then even flesh that out even more in final talks,” he said in last week’s Signal to Noise podcast. “That's why this week's talks are critical.”

The importance of the MOU is that, for the first time, we'll have progress on paper, Wiesemeyer said.

“Then they can take a follow up. If there's a framework of agreement that can be discussed, then the most sensitive issues can eventually be dealt with, in a possible summit between President Trump and Chinese leader Xi Jinping,” he explained. “So we have several more steps to go.”

Chinese leaders and President Trump were more happy about the progress made last week in Beijing than the actual negotiators, he added.

“While they were not negative, they kept on signaling limited progress was made and very limited concessions from China,” he said. “So while some sort of a framework deal or extension of the talks is likely by the March 1 deadline to avoid the new and increased tariffs, I just haven't seen the specifics that would up the odds of a bonafide agreement that that can be written down.”

According to Wiesemeyer, an MOU could also be the first look at promises from China to purchase American goods including soybeans.

“We could possibly find out tonnages and such, which would be friendly to the market,” he said.

Back to news


Comments

 
Spell Check

Red Foreman
Point place, WI
2/20/2019 04:01 PM
 

  Hey PJ , looks like you hung a vacancy sign over your a$$ and my foot is looking for a room !!!!! Good luck with that one dumba$$!!!

 
 
RIck
Jonesboro , AR
2/21/2019 07:39 AM
 

  Indianaman, you are so right. The last two presidents sat on their asses for 16 years and let the communists run all over us on trade! Not gonna happen now.

 
 
Indianaman
Covington, IN
2/19/2019 08:20 PM
 

  Refreshing to have a president that at least trys to make a change.

 
 

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close