JAKARTA (TheInsiderStories) – The United States (US) and China will end years of intense bilateral negotiations with a phase one deal on Wednesday, (USTR) said on Monday (01/13). To discuss China’s trade policies, USTR reports that top trade officials from the US, Japan and the European Union (EU) will meet in Washington on Tuesday.
US Trade Representative Robert Lighthizer met Monday with his Japanese counterpart, Hiroshi Kajiyama, and will meet for bilateral talks with EU Trade Commissioner Phil Hogan on Thursday, a USTR spokesman said to Reuters on Tuesday.
The meetings bookend Wednesday’s signing of a phase one trade agreement between the US and China that is aimed at defusing an 18-month war of tit-for-tat tariffs that have roiled financial markets and dragged down global growth.
Reportedly, the trade deal to be signed will include pledges by China to buy US$200 billion of US goods over two years in four industries. The target for manufactured goods purchases will be the largest, worth around $75 billion. China will also promise to buy $50 billion worth of energy, $40 billion in agriculture and $35 billion to $40 billion in services.
On Monday night, meanwhile, the US removed China from a list of currency manipulators, a sign that the relationship between the world’s two largest economies was thawing slightly in the lead up to the signing of the phase one deal.
“In this context, Treasury has determined that China should no longer be designated as a currency manipulator at this time,” the Treasury said.
Upon the announcement of the phase one deal in December, China also secured some tariff relief, with Washington canceling tariffs that were due to come into force on December 15, and halving a 15 percent tariff on $120 billion worth of Chinese goods, however, 25 percent tariffs on $250 billion worth of Chinese goods remain in place.
Top economists and experts say the US-China phase one trade deal marks a positive step forward but leaves many significant challenges to be resolved. Key issues at the heart of the bilateral dispute, including China’s subsidies for state-owned firms, digital trade, and cybersecurity, must still be addressed, but it is not clear if the phase two talks will make any headway before the 2020 US presidential election in November.
The EU and Japan share many of the US’ concerns about those issues and China’s behavior in global markets, but Tokyo and Brussels have been put on the defensive by tariffs threatened and imposed by President Donald Trump.
Japan reached its own interim trade deal with the US in September. While tensions between Washington and Brussels remain high after Trump in December threatened to impose 100 percent tariffs on French goods over France’s digital services tax, and to increase tariffs on an array of European goods unless the two sides can resolve a longstanding dispute over aircraft subsidies.
Written by Lexy Nantu, Email: email@example.com