China- US trade plan yields early benefits, but far harder negotiations still to come
While the latest progress on the 100- day action plan for trade talks between China and the US was the announcement that the two markets would open up to each other in certain areas such as agricultural products and financial services, the plan has failed to address problems in some key trade areas between the two countries, stoking fears of challenges ahead for their future trade negotiations.
Wendy Cutler, former acting deputy US trade representative, said in an interview with media outlet Caixin on Monday that the initial results of the 100- day action plan are easy- to- harvest “fruits,” with breakthrough progress already having been made. But she went on to say that the difficult work has just begun as the two sides will have to face the key friction problems in Sino- US trade, such as State- owned enterprises. Cutler’s remarks underline the relatively unimpressive results of the 100- day action plan, which mainly include China’s lifting of the ban on US beef imports, allowing wholly foreign- owned financial services companies to provide credit rating services in China, and allowing US liquefied natural gas exports to China, while the US will be open to cooked poultry imports from China.
These outcomes represented genuinely big steps forward in the renewed SinoUS economic dialogue, but many believe that they are just the early and easy part of the trade negotiations. Such a view is well justified considering that topics such as steel and aluminum overcapacity and US technology restrictions have not yet come up.
From the perspective of China, tough and complicated bargaining is expected in further rounds of negotiations. For instance, China will probably demand that the US open up its high- tech market or ask the US to grant it market economy status, but this involves very sensitive issues and the US may find it hard to make such concessions.
It is undeniable that the world’s two largest economies have hundreds of issues to resolve in trade alone, and there will be tough challenges ahead. But what’s crucial is that both countries should calmly calculate gains and losses to move forward little by little in their renewed trade dialogue framework rather than confronting each other or trying to suppress the other side.
Just as the saying goes, a good beginning is half the work. Hopefully the initial results can bring good momentum and a better foundation for both sides to start resolving the more difficult problems.