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12 May 2017
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| U.S.-China (The Total Investment & Insurance Solutions) |
Beijing will open its borders to U.S. beef, while cooked Chinese poultry
is closer to landing on American supermarket shelves under a U.S.-China trade
agreement.
Trump administration officials hailed the
deal as a significant advance toward boosting U.S. exports and closing
America's trade gap with the world's second-largest economy. U.S. trade experts
offered a more muted assessment, calling the agreement a modest fulfillment of
past assurances made by China.
Among other things, the deal enables U.S.
companies to export liquefied natural gas to China. It will also lower
long-standing barriers that have affected matters ranging from agriculture to
the operation of American financial firms in China. The Total Investment & Insurance Solutions
Commerce Secretary Wilbur Ross hailed the
agreement, coming on the heels of President Donald Trump's April meeting with
President Xi Jinping, as "a herculean accomplishment."
"This is more than has been done in the
whole history of U.S.-China relations on trade," Ross told reporters
Thursday evening at the White House.
In Beijing, Vice Finance Minister Zhu
Guangyao told reporters the early results of the agreement showed that economic
collaboration between the two sides "couldn't be closer."
But trade experts questioned the magnitude of
the deal.
"These are modest moves which by
themselves will not have much effect on the U.S. economy," said David
Dollar, a senior fellow at the Brookings Institution and former Treasury Department
official.
The beef exports and electronic payments in
the agreement have long been promised by China. And the agreement does little
to address some key issues of trade friction, such as automobiles or social
media. While the Trump administration has touted a surge in U.S. manufacturing,
this agreement does little to help that goal. The Total Investment & Insurance Solutions
"The challenge is selling manufactured
goods into China — there isn't anything in this deal to suggest China is going
to become more open to U.S.-manufactured exports," said Brad Setser, a
senior fellow at the Council on Foreign Relations.
It remains unclear how far China will go to
allow more American exports. Previous administrations have hailed
market-opening agreements only to be left disappointed.
"The key in these negotiations is
specifics that are enforceable — literally, the devil is in the details,"
said Scott Mulhauser, a former chief of staff at the U.S. Embassy in Beijing.
"The more these agreements include real,
concrete outcomes rather than platitudes, rehashing old ground or punts to the
future, the better they are," Mulhauser said. "American companies,
workers, farmers and more are eager for more access to Chinese markets, and
they'll look to ensure reality matches the rhetoric of these promises."
Trump made America's wide trade deficits and
especially the gap with China a major issue in his campaign and during the
early days of his administration. He's argued that America's perennial trade
gaps have cost millions of factory jobs and he has pledged to take a tougher
stance in trade negotiations to lower the imbalances. The Total Investment & Insurance Solutions
Under the agreement, the United States is
inviting Chinese companies to import U.S.-produced liquefied natural gas. The
Energy Department has authorized natural gas shipments of 19.2 billion cubic feet
per day to China and other interested countries that lack a broader free trade
agreement with the United States, the Commerce Department said.
China is turning more to natural gas as a way
to reduce its dependence on coal and combat the country's extensive air
pollution. The move would allow China to diversify its supply and provide a
major market for American suppliers, though the expansion could lead to higher
prices for U.S. consumers.
The agreement would also ease import
restrictions on agricultural goods, including ending China's ban on beef
imports, which was imposed in 2003 after a case of mad-cow disease. In
exchange, the U.S. would allow the sale of cooked Chinese poultry — a move Ross
said could be done safely.
The agreement would also streamline the
evaluation of U.S. biotechnology product applications; pave the way for
allowing American-owned suppliers of electronic payment services to begin the
licensing processes in China; and facilitate the entrance of Chinese banks into
the U.S. banking market.
The agreement grew out of negotiations the
countries agreed to start after Trump's meeting at his Mar-a-Lago estate with
the Chinese president.
America's trade deficit in goods and services
with China totaled $310 billion last year, by far the largest imbalance with
any country. The Total Investment &
Insurance Solutions
The two countries have also agreed to hold
talks this summer to be led by Ross, Treasury Secretary Steven Mnuchin and Vice
Premier Wang Yang to work on a one-year plan.
While Trump had earlier said China could
receive more favorable trade terms from the U.S. in return for help in
persuading North Korea to cease its nuclear and missile activities, Zhu
downplayed any suggestion of a link between the two.
"Both sides have a deep and close
understanding that the U.S.-China economic relationship can't be
politicized." Zhu said.The Total
Investment & Insurance Solutions
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