Nikkei Asian Review (01/02/2019) - President pushes for more market access, as China promises additional soybean imports.
WASHINGTON -- U.S. President Donald Trump told reporters on Thursday that any final deal with China on trade would be made in a face-to-face meeting with Chinese President Xi Jinping, which could be part of a scheduled trip to Asia to meet North Korean leader Kim Jong Un later this month.
Trump was speaking ahead of a meeting with Chinese Vice Premier Liu He, who was being received at the White House following two days of trade negotiations. Trump also suggested that an encounter with Xi could happen "once or twice," adding that he may invite the Chinese president to his Florida estate for a second time.
The Wall Street Journal reported Thursday that the Chinese side had suggested a Trump-Xi summit on the resort island of Hainan in February.
Liu, who led the Chinese delegation in the cabinet-level trade talks, used Thursday's meeting to deliver a letter from Xi, which promised that China would purchase an additional five million tons of American soybeans.
The chief negotiator on the American side, U.S. Trade Representative Robert Lighthizer, told reporters he would lead a delegation to China after the Lunar New Year holidays end in mid-February to follow up on the discussions.
The White House issued a statement summing up the two-day trade talks, saying seven topics were discussed, including forced technology transfer to Chinese companies, intellectual property protection and the need to remove market barriers and tariffs that limit sales of American manufactured goods, services and agriculture to China.
The statement acknowledged that progress has been made in the talks but that "much work remains to be done." It also noted that the 90-day period for talks agreed to in a Buenos Aires meeting between Trump and Xi remains "a hard deadline," and that U.S. tariffs will increase unless the two sides can reach a satisfactory outcome by March 1.
"Looking for China to open their Markets not only to Financial Services, which they are now doing, but also to our Manufacturing, Farmers and other U.S. businesses and industries," Trump tweeted during the morning hours. "Without this a deal would be unacceptable!"
"No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points," Trump wrote.
At the same time, Trump sent out a reminder that the clock is ticking on a settlement. "China's representatives and I are trying to do a complete deal, leaving NOTHING unresolved on the table," he tweeted. "All of the many problems are being discussed and will be hopefully resolved. Tariffs on China increase to 25% on March 1, so all working hard to complete by that date!"
Bill Reinsch, the Scholl Chair in International Business at the think tank Center for Strategic and International Studies, said pressure is mounting on Trump to make a deal, especially from farmers who have been affected by the trade war.
"In January and February, farmers usually go to the bank to borrow money to buy seeds, fertilizer and equipment for the coming season. They will be unhappy when they find that banks are unwilling to lend," he said.
Reinsch said that the U.S. side will be looking for ways to regularly check that China keeps its end of the deal, with the threat of higher tariffs, and over a wider variety of goods, if violations are found. "Lighthizer does not believe that the Chinese side will stick to the agreement," he said.
Beijing is apparently circumspect about accepting the inspection regime, and the two sides seem to be at odds on this issue.
The Trump administration includes hawks who are distrustful of China. Trade and economic adviser Peter Navarro says China has a "long history" of breaking commitments. One example this faction points to is a May 2017 agreement to allow U.S. credit card companies to operate in China; the deal has yet to result in a U.S. provider fully participating in the market.
The U.S. has long emphasized the process of carrying out and verifying agreements. In the first ministerial-level meeting last May, one page out of four of written requests focused on implementation.
China is taking action to appease the U.S. side. At the end of December, Beijing wrote draft legislation that would bar state-forced transfer of technology from foreign-owned enterprises. The bill will be put to the vote in the National People's Congress in March.
Read more at https://asia.nikkei.com/Economy/Trade-War/Trump-says-trade-deal-rests-on-potential-Xi-summit-this-month