Di­a­logue can re­duce trade fric­tions

China Daily (Hong Kong) - - VIEWS -

The first round of a com­pre­hen­sive eco­nomic di­a­logue be­tween China and the United States will be held on July 19 in Wash­ing­ton un­der the co-chair­man­ship of Chi­nese Vice-Pre­mier Wang Yang, and US Sec­re­tary of Trea­sury Steven Mnuchin and Sec­re­tary of Com­merce Wil­bur Ross. It will be one of the many first rounds of fu­ture di­a­logues, which also in­clude those on law en­force­ment, cy­ber­se­cu­rity, and peo­ple-to-peo­ple and cul­tural ex­changes.

The de­ci­sion to hold the com­pre­hen­sive eco­nomic di­a­logue on Wed­nes­day was con­firmed by Pres­i­dent Xi Jin­ping and US Pres­i­dent Don­ald Trump on the side­lines of the G20 sum­mit in Ham­burg, Ger­many, where Xi told Trump the 100-Day Ac­tion Plan on China-US eco­nomic co­op­er­a­tion has made no­table progress and both sides are work­ing on a one-year co­op­er­a­tion plan.

Com­pared with the an­nual US-China Strate­gic and Eco­nomic Di­a­logue held be­tween 2009 and 2016, the up­com­ing di­a­logue will fo­cus more on con­crete ne­go­ti­a­tions and aim to “get things done” be­fore due time.

Last week, more than 20 en­ter­prises from both sides signed agri­cul­tural trans­ac­tion con­tracts worth at least $5 bil­lion in Des Moines, Iowa, as China has re­opened its mar­ket to US beef prod­ucts for the first time since 2003. Un­der the con­tracts Chi­nese en­ter­prises will im­port 12.53 mil­lion met­ric tons of soy­beans and 371 tons of pork and beef from the US, which in turn is ex­pected to im­port Chi­nese poul­try prod­ucts.

These early gains ex­plain what the 100-Day Ac­tion Plan, which was agreed by Xi and Trump just three months ago, has the po­ten­tial to achieve. They also in­di­cate that the Trump ad­min­is­tra­tion wants a re­sult-ori­ented re­la­tion­ship with Bei­jing.

The July 19 meet­ing will likely fa­cil­i­tate ne­go­ti­a­tions on agri­cul­tural ex­changes, fi­nan­cial ser­vices, in­vest­ment and en­ergy, all key ar­eas of the 100-Day Ac­tion Plan, which is prov­ing to be more con­struc­tive and fruit­ful than some skep­tics were ready to ac­cept. Flag­ship deals inked un­der the frame­work of the ac­tion plan have helped both coun­tries avert a pos­si­ble trade war and re­store their faith in trade co­op­er­a­tion. They have also set an apt ex­am­ple for the year­long co­op­er­a­tion pro­gram.

Bei­jing’s pur­suit of free trade is res­onat­ing in other economies, too. Ear­lier this month the Euro­pean Union and Ja­pan con­cluded an out­line free trade deal in Brus­sels, send­ing a mes­sage to the in­ter­na­tional com­mu­nity that two of the world’s big­gest eco­nomic pow­ers will up­hold free trade even if the US seems to have taken the op­po­site course.

The EU-Ja­pan FTA, which would ac­count for 30 per­cent of the global GDP, would al­low Ja­pan to ex­port more cars to the Eu­rope- an mar­kets and the EU to ex­port more farm­ing prod­ucts to Ja­pan. It could also prompt Trump to re­con­sider his “Amer­ica First” credo and pro­tec­tion­ist poli­cies, as well as help China and the US to fi­nal­ize their bi­lat­eral in­vest­ment treaty.

China-US re­la­tions, in essence, are both about co­op­er­a­tion and com­pe­ti­tion, as are their eco­nomic ties. And the com­pre­hen­sive eco­nomic di­a­logue is ex­pected to re­duce the side ef­fects of com­pe­ti­tion and trade fric­tions, while in­still­ing in both sides a stronger sense of trust and un­der­stand­ing, as trade re­mains the cor­ner­stone of one of the world’s most im­por­tant bi­lat­eral re­la­tion­ships.

These early gains ex­plain what the 100-Day Ac­tion Plan, which was agreed by Xi and Trump just three months ago, has the po­ten­tial to achieve.

The au­thor is head of Amer­i­can Po­lit­i­cal Stud­ies at the In­sti­tute of Amer­i­can Stud­ies, China In­sti­tutes of Con­tem­po­rary In­ter­na­tional Re­la­tions. The ar­ti­cle is an ex­cerpt from his in­ter­view with China Daily’s Cui Shoufeng.

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