United States seeks targeted commitments from China on market access

Jul 21, 2017, 00:37
United States seeks targeted commitments from China on market access

The United States and China have agreed to cooperate on reducing the trade deficit in the first round of economic talks under the Trump administration, Washington said at the conclusion of the meeting Wednesday which produced no major breakthroughs.

At the event, Cui also called on governors of U.S. states to "make efforts to resume the negotiation and conclude the BIT", a bilateral investment treaty between China and the USA that is to address market access issues in each economy.

These issues included demands by the US for access to the financial services industry in China, reducing excess steel capacity by China, reductions in tariffs on autos, cutting subsidies for businesses that are state-owned, ending requirements by China for localization of data and lifting caps on ownership for foreign companies in China, the official added.

After a long day of meetings, the USA was only able to claim that "China acknowledged our shared objective to reduce the trade deficit which both sides will work cooperatively to achieve", but the US and Chinese trade representatives failed to agree on how best to alleviate the $347 billion trade deficit that accounts for roughly 70 percent of the US global imbalance, according to the Wall Street Journal.

China has given a positive spin to an economic dialogue with the United States that essentially ended in an impasse, saying that both sides had agreed to work together to reduce their trade imbalance.

In terms of investment, the two countries will expand mutual investment and create a more open, equitable, transparent and convenient investment environment.

Chinese Vice-Premier Wang Yang told the luncheon that Beijing has its own concerns to be addressed in the talks, including "outdated" United States export controls for high-technology products.

Although invoking the national securities concern is described by trade experts as the "nuclear option" of trade, if more countries are able to break rules for national security reasons, the global trade system could fall apart.

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He highlighted that fact that while exports to China had increased in recent times, imports from China into the USA have far outpaced this increase. And Trump has criticized China for not doing enough to pressure North Korea to reign in its nuclear weapons program. His administration has threatened new sanctions on small Chinese banks and other firms doing business with Pyongyang.

Wang co-chaired the first China-U.S. CED together with U.S. Treasury Secretary Steven Mnuchin and Secretary of Commerce Wilbur Ross on Wednesday.

But Ross and Mnuchin took a more measured tone in a statement following the conclusion of the talks with the Chinese delegation, led by Vice Premier Wang Yang.

"Even now, (although) we occasionally disagree on individual items, we have fundamentally shared objectives".

Shares of United States Steel Corp closed up 4.8 percent, while AK Steel rose 3.6 percent and Nucor rose 2.2 percent.

Trump, asked by a reporter at the White House after the stock market closed whether he would impose steel tariffs, said: "Could happen". The Commerce Department is expected to announce its findings on the review in the coming days.

China is the largest exporter in the world, sending most of its goods to the USA, according to the Observatory of Economic Complexity.

In the past, USA and China had patchy business relations.