By Randy Gordon, President
A U.S. trade delegation departed Beijing, China, on Jan. 9 after three days – including one extended day – of in-person talks with their Chinese counterparts after making what one participant said was some progress in addressing long-festering trade issues between the two countries.
A statement issued Jan. 9 by the Office of the U.S. Trade Representative (USTR) said that U.S. and Chinese officials discussed “ways to achieve fairness, reciprocity and balance in trade relations” between the two countries, as well as “the need for any agreement to provide for complete implementation subject to ongoing verification and effective enforcement.”
The USTR statement also said the talks “focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods and other products and services from the United States.” Earlier in the week, it was reported that Chinese state trading enterprises purchased additional U.S. soybeans, and may have purchased some quantity of U.S. corn. It widely is believed that China has or intends to purchase up to a total of approximately 5 million metric tons of U.S. soybeans, as well as up to 1 million metric tons of U.S. corn in the near term.
The discussions also were to cover non-tariff trade barriers erected by China, including its opaque process for approving agricultural biotechnology traits, as well as how it is planning to address the oversight of new plant breeding techniques, such as gene-editing. During the visit, China’s agriculture ministry announced the approval for import of five long-delayed biotech traits – the first approvals in 18 months.
The U.S. delegation was led by Deputy U.S. Trade Representative Jeffrey Gerrish and included Undersecretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney; Treasury Undersecretary for International Affairs David Malpass; USTR Chief Agricultural Trade Negotiator Gregg Doud; Jason Hafemeister, trade policy coordinator at USDA’s Foreign Agricultural Service; Undersecretary of Commerce for International Trade Gilbert Kaplan; Energy Assistant Secretary for Fossil Energy Steven Winberg; as well as other senior officials from the White House, USTR and each of the cabinet-level departments.
The meeting was the first in-person discussion between officials of the two countries since the Dec. 1 dinner meeting between President Trump and Chinese President Xi Jinping on the sidelines of the G20 economic summit in Argentina. During that dinner meeting, Trump agreed to delay for 90 days – until March 1 – the imposition of tariffs on another $200 billion worth or more of Chinese imports. The USTR statement issued Jan. 9 reiterated the administration’s demand that the negotiations achieve “needed structural changes in China with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft of trade secrets for commercial purposes, services and agriculture.”
The U.S. delegation is scheduled to brief President Trump and administration officials upon their return. But it is widely expected that the next round of negotiations will occur in Washington within a few weeks and will be led by U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, the latter of whom unexpectedly attended the first day of talks in Beijing.
U.S.-Japan-EU Join in Trilateral Approach on Trade: In a related matter, and while not expressly citing China as the target, the top trade officials from the United States, Japan and the European Union met in Washington on Jan. 9 to develop a coordinated trilateral approach to address non-market-based trade issues. In a USTR-issued joint statement, the three officials said they had “advanced discussions on their shared objective to address non-market-oriented policies and practices of third countries that lead to severe overcapacity, create unfair competitive conditions for their workers and businesses, hinder the development and use of innovative technologies and undermine the proper functioning of international trade, including where existing rules are not effective.”
The three trade ministers also agreed to “deepen” their cooperation in addressing nonmarket policies and practices, market-oriented conditions, industrial subsidies and state-owned enterprises, forced technology transfer policies and practices, World Trade Organization reform and digital trade and e-commerce.
U.S. Trade Representative Lighthizer, European Trade Commissioner Cecilia Malmström, and Japanese Minister of Economy, Trade and Industry Hiroshige Seko issued the joint statement, which said the three ministers also had agreed to:
- Discuss ways to intensify the exchange of information on nonmarket-oriented policies and practices and to identify additional criteria indicating market-oriented conditions. They also “confirmed that market-oriented conditions are fundamental to a fair, mutually advantageous global trading system…and their…commitment to continue working together to maintain the effectiveness of existing WTO disciplines, including through ongoing WTO disputes.”
- Direct their staffs to finalize trilateral text-based work addressing industrial subsidies by spring so that they can engage other key WTO members thereafter, “as appropriate.”
- Cooperate on enforcement, developing new rules, reviewing investments for national security, and export controls concerning forced technology transfers.
- Intensify engagement with other trading partners to advance their joint transparency and notification proposal to reform the WTO and to urge WTO members that claim “developing country” status (as China does) to undertake the “full commitments in ongoing and future WTO negotiations.”
- Reaffirm the importance of promoting data security as essential to facilitating digital trade and the growth of the digital economy, and to enhance business environments. In that regard, they specifically confirmed their support for the timely initiation of WTO negotiations on trade-related aspects of electronic commerce that “seek to achieve a high-standard agreement with the participation of as many WTO members as possible.”