3 Min Read
WASHINGTON (Reuters Breakingviews) - China's dealmakers edged out their U.S. counterparts in their first round of trade talks. U.S. beef producers and financial firms will get more access to Chinese markets in exchange for chicken imports and a potential opening for Chinese banks. It’s a good start but Beijing didn’t give up much.
President Donald Trump's administration, eager for a win amid a furor over his firing of the FBI chief, was quick to crow about trade concessions wrangled from the People's Republic of China. The deal is part of a 100-day plan hashed out when Trump met Chinese President Xi Jinping in April.
American enterprises like Visa and Mastercard will get access to the Chinese market and two banks will get bond underwriting licenses. "I have a new boss who's very demanding that things get done on time,” Commerce Secretary Wilbur Ross told CNBC. “So I'm quite relieved that we had tangible achievements.”
Though a decent start, it won’t do much to reduce Uncle Sam's trade deficit with China, which stood at nearly $350 billion in 2016 – and which widened in March. American rivals won't find it easy to compete with Chinese firms which are experienced, and at this point deeply entrenched. For example in electronic-payment services, China has already leapfrogged the United States in many ways.
The agricultural liberalizations are overdue, and in the mutual interest of both counties. American beef is a premium product that will compete with imports from other countries, not domestic farms. As for chicken, the complementary trade is one that Beijing has long pushed. Chinese consumers tend to prefer dark meat and are happy to export the breast meat that Americans like. However, Chinese chicken could raise U.S. food-safety concerns.
On other matters beyond trade, Washington appears to be taking a softer stance than Trump promised on the campaign trail. The former reality-TV star rattled Beijing by taking a congratulatory call from Taiwanese President Tsai Ing-wen after the November election. Since then, Trump said he would refrain from speaking directly with Tsai unless he first checked with Xi. Meantime, the White House appears to be stalling on planned arms sales to Taiwan.
Most of the contentious issues, like barriers to U.S. carmakers and product dumping by state-owned heavy industry, have yet to be addressed. It’s also unclear how these incremental steps affect a comprehensive investment treaty that the two parties have been negotiating for years. American negotiators will have to push harder than this if they want better bargains.
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.