Climate change

Sino-US talks run into snag on two issues

PUBLISHED : Monday, 16 April, 2007, 12:00am
UPDATED : Monday, 16 April, 2007, 12:00am

Talks on environment and energy projects stalled, says US

Negotiations between China and the US to resolve their differences and economic issues have hit a snag as talks on a series of groundbreaking environmental and energy co-operation projects came to a standstill.

The environmental co-operation issues are intended to be part of a package of trade agreements to be announced during next month's Strategic Economic Dialogue summit in Washington between Vice-Premier Wu Yi and US Treasury Secretary Henry Paulson.

According to US sources, Chinese officials abruptly stopped their discussions on a proposal by Washington that Beijing purchase 15 coal-mine methane capture projects - which would cut the equivalent of 25 million metric tonnes of carbon dioxide gas - 15 next-generation coal-fire plants and the elimination of import tariffs for US environmental goods and services into China.

The proposal also included a public statement that the Chinese government seek to achieve greenhouse gas emissions reduction targets.

'We do not know what is going on with the Chinese. All of a sudden, the talks have stopped,' a US official said.

The environmental and energy issues were part of a package of trade and economic items the US hopes Beijing could agree on for the May 23-24 Washington summit.

Earlier this month, it was reported that China had drafted a multibillion-dollar shopping list aimed at addressing its trade surplus with the US, which hit US$232.5 billion last year.

The list is said to include at least US$12.5 billion worth of US goods including electronics and soybeans.

US Trade Representative Susan Schwab announced last week the US would file two wide-ranging trade cases against China with the World Trade Organisation over copyright piracy and restrictions on the sale of US movies, music and books on the mainland, raising the stakes in Washington's trade wrangle with Beijing.

A crucial determinant of whether Sino-US trade relations will continue to worsen is whether Beijing will provide enough 'deliverables' at the may summit to placate critics in the US Congress.

The environmental protection proposals were presented by Mr Paulson to Ms Wu during his visit to China in March. While reacting negatively to US demands on issues such as the valuation of the yuan and financial market access, sources said Ms Wu responded positively to the environmental items.

Beijing later provided its own short list of proposals for Washington, which included setting up formal co-operation mechanisms on the reduction of greenhouse gas emissions and research on renewable energy.

When asked to comment yesterday, a Chinese Foreign Ministry spokesman said the ministry was not aware of changes in the discussions.

Xiao Chen, a professor with Peking University's school of economics, said the big-brother attitude of the US often made the process of negotiation less flexible.

Anti-China trade legislation has reached fever pitch with at least 15 bills currently in the US Congress seeking to punish Beijing. In late March, import tariffs were slapped on Chinese-made paper products.