Vice-ministerial talks in Beijing lay foundation to solve the trade dispute
January 15, 2019 Category Foreign trade, Weekly
China and the U.S. concluded three days of trade talks at vice-ministerial level in Beijing last week, one day longer than originally planned. While the U.S. delegation included no more than 14 people, including translators and Embassy officials, the Chinese team exceeded one hundred officials and even Vice Premier Liu He, the chief trade negotiator for the Chinese side, made an unexpected appearance. While the U.S. government said the talks went very well, few details were made public. Liu He is expected to visit Washington on January 30 and 31.
“We’re making progress” on trade, U.S. Secretary of State Mike Pompeo said in an interview with CNBC. “I hope too that we’ll make progress on all of the other places where China’s not behaving in the way we wish it would. Whether that’s their cyber activity, that has had a real impact.” U.S. President Donald Trump also tweeted that the negotiations were going “very well”. Speaking to CNBC, U.S. Secretary of Commerce Wilbur Ross said that there was a “very good chance” of reaching a settlement that would satisfy both sides, but said that issues like enforcement and compliance would remain challenges. Analysts say the next stage will likely be the creation of a framework to verify China’s commitment to structural industrial reform, a move that could be a stumbling block in ending the trade war between the world’s two largest economies.
Chinese analysts said Liu’s attendance at the talks showed goodwill and Beijing’s commitment to reaching a deal with Washington. Jon Cowley, Senior Lawyer at Baker McKenzie’s international commercial and trade practice group, said he expected that negotiators may have put together a framework for an agreement, but that existing tariffs would not be fully eliminated unless China met the U.S. “all the way”. “It’s possible to reach an agreement that would further extend this truce with respect to the roll-out of new tariffs but it might not necessarily address those that have taken effect,” he said. “We’ve been hearing reports that there’s been a narrowing of a gap between the two sides, but a narrowing of a gap is not a bridging of a gap, and it’s a pretty wide gap.”
United States trade negotiators challenged their Chinese counterparts on a wide-ranging list of grievances during the talks, according to an announcement from the office of the U.S. Trade Representative (USTR) issued as the discussions in Beijing came to a close. In the first official statement from either side, the USTR said the meetings were part of a push to achieve “needed structural changes in China with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft of trade secrets for commercial purposes, services, and agriculture”. The USTR gave no indication as to what, if any, new agreements had been made during the latest round of talks, but its statement said the U.S. side pushed verification and enforcement of previous agreements. The discussions covered China’s commitment to purchasing “a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States”, the statement added. The U.S. delegation would now “report back to receive guidance on the next steps”.
Myron Brilliant, Vice President of the U.S. Chamber of Commerce, said in a statement that there were encouraging signs resulting from the “constructive dialogue”, but stressed that the business community was not primarily interested in “one-off purchasing commitments by China”. Instead, Brilliant said, U.S. companies wanted “structural reforms that would result in enduring access, a level playing field, and an end to the use of regulations that too often force technology transfer or otherwise disadvantage U.S. firms”. The overall positive tone of the negotiations is encouraging and it suggests there will be follow-up negotiations in the near term, according to Craig Allen, President of the U.S.-China Business Council.
China’s Vice President Wang Qishan said cooperation is the best choice for Beijing and Washington while reiterating his nation will stay committed to its own path. Wang was expected to meet U.S. President Donald Trump at the World Economic Forum meeting in Davos, Switzerland, but the U.S. President has canceled his attendance due to the ongoing U.S. government shutdown. Both countries might still hold talks on the sidelines of the Forum.
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