US-China trade war: A common voice risks missing ceasefire deadline

Sunday, 2019-02-10 15:34:10
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Containers are seen at the Yangshan Deep Water Port in Shanghai, China April 24, 2018. (File photo, Reuters)
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NDO – As the 90-day trade battle ceasefire is about to end, the United States and Chinese officials are racing against time to accelerate bilateral negotiations, aiming to prevent trade tensions between the world’s two largest economies from continuous escalation. However, with numerous disagreements remaining between the two sides, it will be very difficult for them to reach a common voice before the deadline.

After the US-China trade war broke out in mid-2018, the leaders of the two countries agreed on a 90-day “truce” from December 1, 2018, in order to negotiate a deal seeking to terminate the escalation of trade tensions. If a solution to the aforementioned trade battle fails to be worked out, the US will raise tariffs from 10% at present to 25% on US$200 billion worth of Chinese goods from March 2. In the context of the suspension deadline approaching, US Treasury Secretary Steven Terner Mnuchin said that the two sides are making great efforts to reach a trade agreement before the March 1 deadline. Telling US television channel CNBC, Mnuchin revealed that the US and China have made progress in trade enforcement issues, but added that the two sides still have a lot to do.

Previously, trade officials from the two countries had talks in Washington to discuss the direction of cooperation aiming to resolve trade disputes between the two sides. Negotiators touched on the thorniest issues, such as market access, ensuring no forced technology transfers or joint venture projects, as well as ensuring a bilateral mechanism to reach an agreement and to supervise the observance of that deal.

According to the US Treasury Secretary, Washington’s negotiating purpose is to “achieve needed structural changes in China”, a factor that is said by the US to affect bilateral trade. Washington wants Beijing to allow US businesses to easily access the market and reduce other non-tariff barriers against US products. Meanwhile, the two sides also discussed Beijing’s previous commitment regarding the purchase of a significant volume of US goods and services as a solution to reduce the US’s trade deficit with the world’s second largest economy. On the Chinese side, before commencing trade negotiations with the US, over the past two months, Beijing has also expressed its willingness to negotiate through the increased purchases of US goods and farm produce, and the adjustment of certain economic policies towards creating more favourable conditions for foreign businesses to invest and do business in China.

However, despite both sides’ goodwill to promote negotiations, the resolution of the current bilateral economic and trade issues is not simple as there still exist numerous disagreements and different strategic interests between the two powers. Commenting on the recent US-China trade negotiations, many analysts stated that there are too many “barriers” related to intellectual property rights, trade deficit, and market openings. In terms of intellectual property rights, US President Donald Trump, in his 2019 State of the Union address, declared that the active trade negotiations between the two sides are aimed at ending the “stealing” of US jobs and property. However, China has repeatedly voiced its opposition to allegations from the US and its allies.

Meanwhile, the increasing trade deficit between the US and China in 2018 has also emerged as an obstacle to bilateral trade negotiations. According to the latest statistics, the US trade deficit with China reached US$413 billion in 2018. Facing the aforementioned difficulties, in his recent speech on CNBC, US Secretary of Commerce Wilbur Ross admitted that the US and China “are still far from the goal of ending the trade war”.

Regardless of difficulties currently faced in US-China trade negotiations, a positive “bright spot” is that both sides identify and believe that they will solve the bilateral trade issues through negotiations. Officials from China’s Foreign Affairs and Commerce Ministries have repeatedly affirmed that the China-US trade negotiation delegations are accelerating consultations aiming to promptly reach an agreement that is acceptable to both sides. Meanwhile, US Secretary of Commerce Wilbur Ross said there was still “an equal opportunity” to reach a mutually beneficial deal for both sides.

The US-China trade war has been taking place fiercely over recent times, and it is forecast that after 90 days of “truce”, Washington and Beijing have still yet to deal with all disagreements and the war may be prolonged. However, the leaders of the two countries taking the decision to negotiate, having the goodwill to negotiate, and endeavouring to negotiate, are the correct choice, because if not, the battle would continue without a winner.