Tuesday January 22, 2019
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Analysts Hopeless Over the Trade Talks Between the U.S. and Chinese Government

“It depends on how big Washington’s expectations are and how big its demands for reform and opening up of the Chinese market,” Liao says. “China will make some concessions, but if Washington’s appetite is too big, that will be tough for Beijing to accept.”

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US billionaire investor Warren Buffett said on Saturday that the world depends on the US and China for progress, dismissing concerns that the two countries' trade tensions could potentially escalate into a trade war.
US-China Meeting, wikimedia commons

A high-level U.S. trade delegation has begun talks with Chinese officials in Beijing as Washington tries to address deep concerns about China’s economic policies. The meeting is seen by some as a positive step, as the two sides attempt to avoid the possible outbreak of a trade war. Analysts say it is unlikely their differences will be resolved during the meetings but a decision to keep talking would be welcome progress.

President Donald Trump said on Twitter U.S. officials are “trying to negotiate a level playing field on trade.”

Raymond Yeung, a senior economist for Greater China at the Australia and New Zealand Banking Group, says if the two sides can at least agree to keep talking with each other that would be big progress.

The policy clearly sets goals for domestic industries to dominate over foreign players in the Chinese market and globally.
Donald Trump, Wikimedia Commons

“I think it is too demanding to expect that both sides can come up with an agreement or an announcement or sign a deal,” Yeung said. “But if they are able to promise that they are willing to sit down and continue the dialogue and try and resolve their differences, at least that would signal that the relationship between the two governments is warming up.”

Differences over trade policy and market access have been a persistent concern for the United States and other foreign investors in China. In recent weeks, the debate has become even more heated with President Trump threatening to slap a long $50 billion list of tariffs on Chinese goods to punish Beijing for what his administration calls its unfair trade practices: forced technology transfer, intellectual property rights and state subsidies for technology development.

Beijing has denied Washington’s accusations and insists its market is opening. It recently pledged to do away with a 25 percent tariff on imported foreign cars, albeit by 2022. The Chinese government has also responded with threats of its own, saying that if the U.S. presses ahead with tariffs it will respond in kind.

The seven-member U.S. delegation is led by Treasury Secretary Steven Mnuchin and is meeting with a group of Chinese officials led by Chinese Vice Premier Liu He, a close aide to China’s president, Xi Jinping.

Although it is difficult to predict how the meetings will turn out, Liao Qun, chief economist at China CITIC Bank International, says it is a positive sign that both sides have a desire to sit down and negotiate. How much can be accomplished, depends on Washington, he says.

“It depends on how big Washington’s expectations are and how big its demands for reform and opening up of the Chinese market,” Liao says. “China will make some concessions, but if Washington’s appetite is too big, that will be tough for Beijing to accept.”

Beijing has characterized President Trump’s threats to tax exports and attack the government’s policies as an attempt to contain China and force the Chinese market to become more open, something that officials and state media have repeatedly stressed will never happen.
Xi Jinping, wikimedia commons

Since Xi Jinping rose to power in 2012, China has taken big steps to increase the central government and the communist party’s control over the economy and business, even as Beijing pledges to continue to further open its markets.

In 2015, the government unveiled a key policy plan called Made in China 2025, a plan that aims to make China dominant in 10 major next generation industries from robotics to electric cars, artificial intelligence, bio-tech and aerospace, among others. An investigation by the Trump administration into China’s unfair trade practices mentions the policy more than 100 times.

The policy clearly sets goals for domestic industries to dominate over foreign players in the Chinese market and globally. Beijing has characterized President Trump’s threats to tax exports and attack the government’s policies as an attempt to contain China and force the Chinese market to become more open, something that officials and state media have repeatedly stressed will never happen.

Bridging such a huge gap during two days of talks will be difficult, says Christopher Balding, a professor at Peking University’s HSBC Business School.

“I would be somewhat surprised if there was any real change in the negotiating stance of either party. Specifically China, they don’t want to open their markets, that’s the fundamental point,” Balding says.

Also Read: Jammu and Kashmir cabinet gets five fresh additions

He says the best that could be hoped for is that the two can find enough room to compromise to not go forward with the trade war. But these disputes are unlike any other in recent history, he adds.

“This is about how disputes are settled: About how one country views the international system as compared to the other. This is about how one country views how a country should be run and how they have conflicting views of those two things,” Balding says. (VOA)

Next Story

As U.S.- N.Korea Summit Nears, Path To Denuclearization Remains Unclear

For Trump to actually get a real concrete measurement on denuclearization would allow him to really get more buy-in to keep the process rolling in Washington

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U.S., North Korea
U.S. President Donald Trump and North Korea's leader Kim Jong Un meet at the start of their summit on the resort island of Sentosa, Singapore, June 12, 2018. The U.S. should not grant unilateral concessions and sanctions relief to North Korea. VOA

Despite the Trump administration asserting there’s been ongoing progress in talks with North Korea over its commitment to denuclearize, it is unclear what has been achieved ahead of the U.S. announced summit between President Trump and Kim Jong Un.

Bruce Klinger, Senior Research Fellow for Northeast Asia at the Heritage Foundation, says “that while some speculate that behind the scenes there had been quiet successes between the two sides, in reality, that really hasn’t been the case.”

North Korea’s denuclearization process has been stalled for months with little signs of outward progress, despite a call by South Korean President Moon Jae-in for Washington and Pyongyang to meet again. That’s something that is likely to take place before the end of February, when U.S. President Donald Trump said he’d meet North Korean leader Kim Jong Un for a second summit.

“A few days ago Vice President Pence said that [the U.S. is still waiting for North Korea to commit to denuclearization. That’s been consistent with the divergence between the U.S. and North Korean position, not only since last year’s summit but for decades,” said Klinger.

North Korea, Summit, U.S.
U.S. Secretary of State Mike Pompeo escorts Kim Yong Chol, North Korea’s lead negotiator in nuclear diplomacy with the United States, into talks at a hotel in Washington, Jan. 18, 2019. VOA

But, that may not be the case, says Rodger Baker, Vice President of Strategic Analysis for Stratfor.

“It seems that the North Koreans are the ones who have been driving the push for this second summit almost more so than the United States,” he said, referencing announcements in Kim Jong Un’s New Year’s speech which “laid out that North Korea saw a need for some change in behavior of the United States or else they would restart their program.”

“[North Korea] reached out to China to make sure that everything was going okay there and that China had their back, and then they reached out to the United States,” Baker assessed.

However, Harry Kazianis, director for Defense Studies at the Center for the National Interest, told VOA that at this point both sides may have realized there needs to be concrete progress towards denuclearization.

Kazianis said the “trick” now is to construct an interim deal “where both sides can come across as being a winner.”

North Korea, Summit, U.S.
FILE – U.S. President Donald Trump meets with North Korean leader Kim Jong Un on Sentosa Island, in Singapore, June. 12, 2018.

“That’s a very hard thing to do at any sort of negotiation,” he said.

Trump met with North Korean nuclear envoy Kim Yong Chol for nearly two hours, saying the announcement of the location of the next summit would be made shortly and that Kim was looking forward to their meeting.

“We’ve made a lot of progress that has not been reported by the media but we have made a lot of progress as far as the new denuclearization is concerned,” he said.

Neither Trump nor the White House gave details about the talks.

Getting talks to move forward

When South Korean President Moon Jae-in met North Korean leader Kim Jong Un this past September in Pyongyang, “the North expressed its willingness to continue to take additional measures, such as the permanent dismantlement of the nuclear facilities in Yongbyon, as the United States takes corresponding measures in accordance with the spirit of the June 12 US-DPRK Joint Statement,” according to the joint declaration issued at the end of the summit.

Currently, what North Korea means by “corresponding measures” remains debatable among experts.

United Nations, U.S.
Members of the United Nations Security Council gather for a meeting on North Korea, Sept. 27, 2018, at the United Nations in New York. VOA

Kazianis suggests that one possible measure the United States could offer would be to make a formal peace declaration or begin the process to issue a peace treaty to formally end the 1950-1953 Korea War.

But Baker said that a peace declaration may not be sufficient.

“The United States has already made basically peace declarations or assertions of having no intent to attack North Korea, and that wasn’t enough,” said Baker.

Furthermore, Kazianis said, “The biggest thing that the North Koreans always talk about their propaganda media statements… is how afraid they are of America’s nuclear assets.”

He suggested that if Washington were to scale the assets back, “I think the North Koreans would be really, really incentivized to do a lot.”

Both Kazianis and Baker added that Pyongyang is also looking for sanction relief.

Although Klinger said many underestimate the complexity involved with reducing or eliminating sanctions, noting the difference between sanctions imposed by the United Nations and those by the United States.

Korea
A train transporting dozens of South Korean officials runs on the rails which leads to North Korea, inside the demilitarized zone separating the two Koreas in Paju, South Korea. VOA

“The U.N. sanctions are,” he said, “is sort of behavior modification, and a lot of the sanctions are trade restrictions, either import or export. In a way, those are more negotiable.”

“The U.S. sanctions are far more difficult to remove because they’re not just focused on the nuclear and missile programs. They are U.S. laws and they focus on human rights violations, criminal activities, such as money laundering, counterfeiting, as well as related to North Korea being on the state-sponsored terrorism list,” he said.

What needs to happen in February?

A criticism of previous summits between Kim and the leaders of South Korea and the United States has been the lack of concrete statements outlining how denuclearization will be achieved.

While Washington may still desire complete, verifiable denuclearization, Baker suggested that may not be “a viable and a realistic outcome anytime soon.”

“So the reality is that what the United States and North Korea and South Korea really are working towards is some way to manage North Korea and to find a way to ease a sense of imminent conflict,” he said.

USA, Trump, North Korea
A man looks at a TV screen showing North Korean leader Kim Jong Un, left, and U.S. President Donald Trump shaking hands before their meeting in Singapore, in Tokyo, June 12, 2018. VOA

Klinger said a key deliverable from the upcoming second U.S. – North Korean summit should be a commitment “to flesh out a comprehensive, integrated agreement which very clearly delineates everyone’s responsibilities.”

The problem he said, is that past agreements have been “short and vague enough that everyone can claim their own interpretation, and it doesn’t clearly identify what everyone has to do… and they all had very weak verification.”

Kazianis remains optimistic that the upcoming summit will make progress on the denuclearization front since both sides have a lot to offer in terms of concessions.

Also Read: North Korea Working For Second Summit With US to Achieve Results, Says Kim Jong-un

“For Trump to actually get a real concrete measurement on denuclearization would allow him to really get more buy-in to keep the process rolling in Washington and keep the people that are completely against this process on the left and the right, maybe to buy in a little bit more,” he said.

Neither Washington nor Pyongyang has yet to officially announce the date or location of the second U.S. – North Korean summit, although some speculate it may take place in Vietnam. (VOA)