US, China discuss purchases and progress in phase one deal

Bloomberg August 25 | Updated on August 25, 2020

Chinese and US national flags flutter at the entrance of a company office building in Beijing   -  Bloomberg

US and Chinese trade negotiators discussed the phase-one trade deal, with the US. saying that both sides saw progress and are committed to its success.

The two countries addressed steps that China has taken as a part of the deal such as ensuring greater protection for intellectual property rights and removing impediments to American companies in the areas of financial services and agriculture, the US Trade Representative said in a statement. Both sides agreed to create conditions to push forward the deal, the official Chinese news service Xinhua reported on Tuesday morning in Beijing.

Trade between the world’s largest economies has emerged as a rare area of cooperation as the relationship sours on a number of other fronts ranging from tech security to Hong Kong and the pandemic response. Yet Beijing is far behind where it needs to be to meet its promises to increase purchases of agricultural, energy and manufactured goods from the US.

China would need to buy about $130 billion in the second half of this year to comply with the original terms of the agreement signed in January, in which it agreed to purchase an additional $200 billion of American goods and services over the 2017 level by the end of 2021.

“The parties also discussed the significant increases in purchases of US products by China as well as future actions needed to implement the agreement,” the US statement said.

China has made progress on other commitments. It modified regulations to allow imports of a variety of American farm and food products, while removing foreign equity caps in insurance, securities, and futures. It also lowered other financial market barriers and gave the greenlight to enterprises such as American Express Co, MasterCard Inc and Fitch Ratings Inc to enter its market.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice-Premier Liu He on Monday Washington time, according to the US statement. The USTR later corrected that statement as they misspelled Liu’s first name, a mistake that drew attention on Chinese social media.

Prior to the talks Bloomberg News reported that China would raise the issue of Washington’s recent crackdown on businesses including TikTok and WeChat. That wasn’t mentioned in the US announcement or the Chinese report.

Published on August 25, 2020

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