US, China make little headway after Shanghai trade talks

  • The US and China will continue their trade talks in September, after making modest progress on Wednesday in Shanghai
  • The two sides are yet to reach any credible landing zones on the proposed enforcement system in the US-China trade agreement with equal rights, obligations


Geneva: The US and China will continue their trade talks in September, after making modest progress on Wednesday in Shanghai over the quantum of American farm products that Beijing would purchase, and Washington’s removal of its barriers on the sale of technology-related items to Chinese telecom companies, analysts said.

The American team, led by US trade representative ambassador Robert Lighthizer and treasury secretary Steven Mnuchin, and the Chinese delegation, headed by vice-premier Liu He, remained far apart during the 12th round of talks that concluded on 31 July. The two sides are yet to reach any credible landing zones on the proposed enforcement system in the US-China trade agreement with equal rights and obligations, including the lifting of retaliatory tariffs on Chinese products once the deal comes into force.

Besides, there is limited convergence on the US’s demands for a stringent protection regime for intellectual property provisions in China, forced transfer of technology and services, including cloud-computing and data flows.

China, on the other hand, wants the US to stop imposing non-tariff barriers on the sale of high-tech products to Chinese telecoms behemoth Huawei, and intransigent trade measures on Chinese companies to operate in the US.

Despite limited progress in the talks, after more than two months of frosty exchanges, President Donald Trump claimed “there will be a trade deal with China, if he wants one, because Beijing is feeling the sting of US tariffs", Washington Trade Daily reported on 1 August. “We expect negotiations on an enforceable trade deal to continue," maintained a White House statement, claiming the talks were “constructive".

In a high-voltage war of nerves, as to who will blink first and demonstrate certain goodwill, the two sides are moving haltingly on what would constitute as the concrete give-and-take for guaranteed supplies of products, as well as removal of non-tariff barriers that impede their two-way trade, including the growing sanctions by Washington on Huawei Technologies Co. Ltd’s access to US technology.

Given the total unity of purpose/action in both the countries, the very fact that the talks took place at the ministerial level means they were “substantive". “My hope is that because we’re talking again that we are making progress, and I think we are," the former US trade representative and now Ohio senator ambassador Rob Portman told Bloomberg Television on Wednesday.

“The fact that they agreed to continue talks is also a good thing," maintained Portman, suggesting that he would agree with Trump’s assessment that Beijing is trying to slow walk the negotiations amid hopes that a Democrat, inclined to be less tough on China, will win next year’s presidential elections.

According to the Washington Trade Daily, senator Portman said there was a problem with the Chinese line of thinking, as there was bipartisan consensus in Congress that Washington needs to be tougher on China and the Democratic contenders are inclined to be as tough or even tougher than Trump. “Separately, if China is unwilling to make significant reforms to its economic model, President Trump must be prepared to walk away," senate Democratic leader Chuck Schumer insisted on the Senate floor on Wednesday. “In particular, he urged the president to “hold tough" on US sanctions against Chinese telecommunications giant Huawei- as “it is our greatest source of leverage".

China urged the US to show “more sincerity and credibility". The key for resolving the US-China impasse requires the US to show “an attitude of honesty and credibility based on win-win cooperation and mutual respect,'' the Chinese foreign ministry spokesperson Hua Chunying said on Wednesday.

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