Talks over US trade deficit with China set to con­tinue

The Star Early Edition - - INTERNATIONAL - An­drew Gal­braith and Do­minique Pat­ton

BI­LAT­ERAL talks aimed at re­duc­ing the US trade deficit with China have yielded some ini­tial deals, but US firms say much more needs to be done as a dead­line for a 100-day ac­tion plan ex­pires on Sun­day.

The ne­go­ti­a­tions, which be­gan in April, have re­opened China’s mar­ket to US beef af­ter 14 years and prompted Chi­nese pledges to buy US liq­ue­fied nat­u­ral gas. Amer­i­can firms have also been given ac­cess to some parts of China’s fi­nan­cial ser­vices sec­tor.

More de­tails on the 100-day plan are ex­pected to be an­nounced in the com­ing week as se­nior US and Chi­nese of­fi­cials gather in Washington for an­nual bi­lat­eral eco­nomic talks, re­branded this year as the “US-China Com­pre­hen­sive Eco­nomic Di­a­logue.”

“We hope to re­port fur­ther progress on the 100-day de­liv­er­ables next week,” a US Com­merce Depart­ment spokesper­son said on Satur­day. “That will be the ba­sis for judg­ing the ex­tent of progress.”

The spokesper­son de­clined to dis­cuss po­ten­tial ar­eas for new agree­ments since a May 11 an­nounce­ment on beef, chicken, fi­nan­cial ser­vices and LNG.

Ear­lier in April, when Chi­nese Pres­i­dent Xi Jin­ping met US Pres­i­dent Don­ald Trump for the first time at his Florida re­sort, Xi agreed to a 100-day plan for trade talks aimed at boost­ing US ex­ports and trim­ming the US trade deficit with China.

The US goods trade deficit with China reached $347 bil­lion (R4.52 tril­lion) last year. The gap in the first five months of 2017 widened about 5.3 per­cent from a year ear­lier, ac­cord­ing to US Cen­sus Bureau data.

“It is an ex­cel­lent mo­men­tum builder, but much more needs to be done for US-China com­mer­cial ne­go­ti­a­tions to be con­sid­ered a suc­cess,” said Ja­cob Parker, vice pres­i­dent of China op­er­a­tions at the US-China Busi­ness Coun­cil in Bei­jing.

Lit­tle progress

There has been lit­tle sign of progress in sooth­ing the big­gest trade ir­ri­tants, such as US de­mands that China cut ex­cess ca­pac­ity in steel and alu­minium pro­duc­tion, lack of ac­cess for US firms to China’s ser­vices mar­ket, and US na­tional se­cu­rity curbs on high-tech ex­ports to China.

The Trump ad­min­is­tra­tion is con­sid­er­ing broad tar­iffs or quo­tas on steel and alu­minium on na­tional se­cu­rity grounds, partly in re­sponse to what it views as a glut of Chi­nese pro­duc­tion that is flood­ing in­ter­na­tional mar­kets and driv­ing down prices.

North Korea has cast a long shadow over the re­la­tion­ship, af­ter Py­ongyang tested what some ex­perts have de­scribed as an in­ter­con­ti­nen­tal bal­lis­tic mis­sile on July 4. Trump has linked progress in trade to China’s abil­ity to rein in North Korea, which counts on Bei­jing as its chief friend and ally.

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