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TRADE WARS
US-China trade pact: a Trump triumph or rehashed news?
By Jeremy TORDJMAN
Washington (AFP) May 14, 2017


China, US seal trade deal as ties warm up
Beijing (AFP) May 12, 2017 - Beijing and Washington announced Friday an agreement giving US beef, natural gas and certain financial services access to China's massive market in a deal highlighting the warm ties nurtured by their presidents.

The deal was unveiled a month after Chinese President Xi Jinping and Donald Trump launched a 100-day action plan on economic cooperation during their meeting at the US leader's Mar-a-Lago resort in Florida.

Relations between the two governments have been warmer than expected after Trump lashed out at Beijing throughout the US presidential campaign.

"We are excited about US trade policies and I think you probably saw we made an announcement of a 100 day economic plan with the Chinese so I think we're very happy with how we're proceeding with the Chinese," US Treasury Secretary Steven Mnuchin said as he arrived for a meeting of G7 finance ministers in Italy.

US Commerce Secretary Wilbur Ross told reporters at the White House that the deal will help reduce the US trade deficit with China, which reached nearly $350 billion last year.

"This was pretty much a herculean accomplishment to get this done," Ross said, according to Bloomberg News.

"This is more than has been done in the whole history of US-China relations on trade," Ross said.

In Beijing, foreign ministry spokesman Geng Shuang said the two countries "enjoy very close economic cooperation".

"The nature of this relationship is mutually beneficial. The two sides decided to press ahead with this economic plan and the fact that much progress has been made in a short amount of time shows... we can establish more cooperation for the joint benefit of the people," he said.

- 'Paltry benefits' -

During last year's election, Trump had threatened to impose trade tariffs and label Beijing a currency manipulator, neither of which he has done.

But his tone changed after he took office and met with Xi in April, calling the Chinese leader a "good man" who was trying to help Trump rein in North Korea.

But a report by Capital Economics consultancy saw "paltry trade benefits" from the deal because it would amount to "just a few billion dollars."

The agreement "won't make any meaningful difference to the bilateral trade imbalance, which could still trigger a flare-up of tensions between the two sides in the future," it said.

- Ending beef ban -

Under the agreement announced by both nations, China will authorise US beef imports by July 16 while the United States will lift barriers on Chinese cooked poultry exports "as soon as possible".

China banned US beef following a case of mad cow disease in the United States in 2003.

Beijing had announced an end to a 14-year embargo on American beef last year, but the decision has yet to be implemented.

Regaining access to China, the world's most populous country with 1.4 billion people, has been a key goal of American cattle farmers.

The deal will also allow Chinese companies to buy liquified natural gas from the United States.

"This will let China diversify, somewhat, their sources of supply and will provide a huge export market for American LNG producers," Ross said.

China will also give permission to wholly foreign-owned financial services firms to provide credit rating services in the country.

And it will give "full and prompt market access" to US-owned suppliers of electronic payment services, including credit and debit card transactions -- something China had already said it would do in 2015 after losing a case at the World Trade Organisation.

The joint statement said the United States would send a delegation to China's One Belt, One Road summit on Sunday and Monday -- Xi's signature project.

The new trade agreement unveiled Friday between China and the United States is yet another olive branch from the Trump White House to Beijing, but some skeptics wonder how long the cooperative tone will last.

One thing is sure: the initial measures of the 100-day action plan launched in mid-April by China and the United States stand in stark contrast with the anti-Chinese rhetoric Donald Trump used on the campaign trail.

The president has significantly softened his stance, declining last month to declare China a currency manipulator -- one of the most strident pledges he made as a candidate.

And, at least at first glance, the new Sino-American trade deal appears to have vindicated this softer approach that is starting to bear fruit.

"We have made...more progress in 40 days than the prior trade negotiators had in this century," Commerce Secretary Wilbur Ross said recently on Fox News.

- Seemingly familiar aspects -

The two-page plan of action calls for the lifting of the 13-year embargo Beijing had kept on American beef, as well as gradually opening the Chinese market to certain US financial services.

"It's impossible to overstate how beneficial this will be for America's cattle producers," said Craig Uden, president of the National Cattlemen's Beef Association, adding that he was eager to court 1.4 billion new consumers in China.

As important as they may be, these developments are not entirely new. Plans to lift the beef embargo had already been agreed to in principle last September under former President Barack Obama.

The only truly new development was the plan to speed up direct exports of American liquefied natural gas to China, delighting some in the American hydrocarbon industry.

"It's a strong signal from both governments that there is a real interest in using LNG produced in the US in China," Charlie Riedl, director of the Center for Liquefied Natural Gas, told AFP.

As for the Chinese, they got the US to lift trade barriers to Chinese exports of cooked poultry, a concession that does not appear to worry US producers.

"It would serve a niche market and we don't think that it would be a problem for our domestic industry," said Jim Sumner, director of the USA Poultry and Egg Export Council.

According to Douglas Paal, a China expert at the Carnegie Endowment for International Peace, these achievements are the low-hanging fruit.

- The easy steps -

"It's not negative but it's not a major step," he said. "These are the easy steps. The heavy work hasn't started yet."

Indeed, the agreement does not touch on theft of intellectual property or the American manufacturing sector, which has suffered most of all from Chinese competition -- and which Trump had promised to rescue on his arrival in the White House.

Imports of Chinese-manufactured goods are nevertheless blamed for the colossal US trade gap in goods with China, which stood at $347 billion in 2016. Trump has vowed to reduce it.

"For American manufacturing, there's not a lot there although I'm not terribly surprised," said Scott Paul of the Alliance for American Manufacturing.

"Those issues are going to be much harder to solve."

Paul said the Trump administration may need to get tougher, even threaten sanctions or fresh trade barriers, to win concessions from Beijing.

"The administration may need to take a more aggressive stance," he said.

Analysts say that, despite its repeated promises on joining the World Trade Organization in 2001, China has still not honored promises to open its markets to foreign competition.

"There's a lot of skepticism about whether or not China will really follow through," said Paal.

TRADE WARS
Nepal signs up to China's new Silk Road plan
Kathmandu (AFP) May 12, 2017
Nepal on Friday signed up to China's new Silk Road drive, a massive infrastructure project spanning some 65 countries at the centre of the Asian giant's push to expand its global influence. The long discussed deal between impoverished Nepal and its much bigger neighbour comes just days before China hosts a summit for 28 leaders near Beijing, showcasing the ambitious plan. The One Belt, ... read more

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