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Real winner of trade deal

21 0 0
By Lee Seong-hyon
Some believe that the first phase of the U.S.-China deal to end the trade war is China's defeat. However, Vice Premier Liu He, China's chief delegate to the trade talks, said the deal "serves China's interests, the U.S.'s interests, and the world's interests." In other words, he characterized the deal as having a "win-win" outcome. Then, on what basis should we evaluate the deal?

The agreement calls for China to purchase $200 billion worth of U.S. products in two years, while the U.S. will suspend or ease its planned additional tariffs on Chinese goods. As much of the rest is about China's future commitments, it is difficult to assess which country will be hit harder in terms of gains and losses.

As an alternative, it can be approached from the perspective of how much the U.S. and China have each achieved their intended goals through their trade war negotiations. This is known as "goal setting theory." The gist of this theory, initiated by psychologist Edwin A. Locke in his 1968 paper, "Toward a theory of task motivation and incentives," places the goal as the most direct........

© The Korea Times