All talk, no substance as US-China trade meeting wraps up

01-Aug-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

The first face-to-face talks between top trade negotiators from Beijing and Washington since their suspension in May lasted just half a day with not much on the table from either side.

The US delegation arrived in Shanghai on Tuesday for a working dinner, before talks officially started on Wednesday. But the meeting wrapped up early in the afternoon with no a sign of a breakthrough only a willingness to continue discussions.

While the talks between US Trade Representative Robert Lighthiser, US Treasury Secretary Steven Mnuchin and Chinese vice-Premier Liu He were closely watched, they were seen as largely symbolic by Chinese diplomatic observers and advisers.

US President Donald Trump and his Chinese counterpart Xi Jinping agreed in late June to resume talks but there was no time frame for the discussions. That was in contrast to the three-month framework for negotiations that was set at their previous encounter at the G20 summit in Argentina in December.

Before Wednesday’s talks wrapped up, Trump took to Twitter to complain at length that China had not been “coming through” in terms of buying US farm products or in making progress on a deal to end the year-long trade war.

Chinese foreign ministry spokeswoman Hua Chunying said she was not aware of the latest developments from the talks, but it was clear it was the United States which continued to “flip flop”.

“I believe it doesn’t make any sense for the US to exercise its campaign of maximum pressure at this time. It’s pointless to tell others to take medication when you’re the one who is sick,” Hua told a news briefing.

For China, the urgency to end the tariff war has lessened, with the economic downturn not as serious as expected. Beijing is also watching the US presidential race with interest, to see how it will affect trade policy, although it is not relying on a Democrat victory to end the conflict.

“China has started to buy soybeans from the US, which could help Trump to counter domestic political pressure, meanwhile US tech firms have raised their voices to lobby the US administration to loosen export controls on [Chinese tech giant] Huawei,” Peking University international relations professor Wang Yong said.

“Wall Street bankers also hope to invest more in China. If both sides fail to reach a deal, they will lose China’s market which is expected to further open up in the coming years.”

In addition to buying more agricultural products, Beijing might promise to change some of its regulations to make it easier for foreign businesses to operate in the country, according to Pang Zhongying, an international relations expert with Ocean University of China.

But the Wednesday meeting would not go far beyond a signal that they were talking, with neither side rushing for a deal, he said.

“The difficult issues facing their trade relationship will not be overcome immediately,” he said, adding that while Beijing considered it unrealistic to wait for a Democrat to unseat Trump an accusation made by Trump on Twitter the Chinese leadership was assessing whether there would be any change in US China policies during and after the presidential election.

“If Trump is re-elected, he may face less election pressure and negotiations may be less tough.”

Wei Jianguo, a former Chinese vice-minister of commerce, agreed that the prospects for negotiations could be clearer after the US election.

“Right now, the most important thing for Trump is the election,” he said.

Wei also said the Chinese economy was not as bad as expected with 6.2 per cent growth recorded in the second quarter, while the US economic outlook was not good.

“All of this will complicate the next steps in trade between both sides. But, right now, Trump needs something significant to stimulate and prove himself,” he said.

Wei said it was impossible for China to buy US products at a high cost and that negotiations should be based on mutual respect.

“We cannot see the negotiations this time as being able to resolve the problems, but we need to see how we can use these talks to build mutual trust, to resolve the mistrust between both sides,” he said.

A Chinese government adviser said Trump needed a good deal to strengthen his presidential campaign and counter downward economic pressure, while China’s overall economy was not as bad as expected.

“There won’t be a deep fall in the economy even if Trump imposes tariffs on the rest of Chinese exports to the US. As long as China’s bottom line remains, China is willing to see a deal,” he said.

Beijing wanted to see the removal of tariffs and an enforcement mechanism that showed dignity to China, the adviser said.

“If the US can lift the tariffs in some form, China can make a promise in enforcement. The talks in Shanghai could be merely a formality, but I hope there will be a breakthrough by the end of the year.”

He said also that Trump and Lighthiser each had different goals in the trade talks, with the president focused on direct interests such as Chinese purchases of American goods and the trade representative prioritising system changes in China.

“The protracted trade talks will only exacerbate their conflicts,” he said. “China played tough by standing firmly against the US in the past couple of months and this has impacted the US.”

China had earlier asked the US to remove all tariffs as a precursor to a deal and said any agreement must not undermine its sovereignty. The US, meanwhile, insisted on a forcible enforcement mechanism, such as a change in Chinese law, and insisted on keeping tariffs in place until it was satisfied China had delivered on its commitment.

Wang said the US and China had different styles to address problems, with the US trusting in legislation to validate any agreement, while China relied on administrative orders to make changes. But he did not regard them as insurmountable.

“The US and China can find a middle ground to solve the enforcement issues,” he said.


Category: China

Print This Post

Comments are closed.