Trade war truce may placate US, but changing China in 90 days is ‘wildly optimistic’
- Reform of China’s IP rules that was already planned may offer the US a fortuitous win
- State-owned ‘dinosaurs’ more entrenched than ever, with US demands for structural change to China’s economy looking unrealistic
The clock is ticking on the 90-day trade war truce agreed to by US President Donald Trump and Chinese President Xi Jinping in Buenos Aires last weekend, with analysts warning it is nowhere near long enough to allow the two sides to bridge the large differences between their positions on key issues.
Moreover, while progress in intellectual property protection may be possible during the three-month grace period, expectations for major Chinese concessions in other areas, particularly the reform of state-owned enterprises, are all but certain to be disappointed.
US demands for China to make economic reforms are long-standing. The official White House communique said that negotiations on “structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture” would begin immediately. China is preparing to send a delegation of as many as 30 officials to Washington later this month to start the talks, the South China Morning Post reported on Monday.
However, in trade negotiations, 90 days barely equates to the blink of an eye.
“I agree, 90 days is wildly optimistic in terms of what can be achieved,” said Elliot Papageorgiou, a Shanghai-based partner at law firm Clyde & Co specialising in intellectual property. “This looks like a happy announcement for Christmas – we’ve got the trade war averted – but it has really been kicked into next year.”
Several analysts interviewed for this article viewed the “deal” as something to placate those at home through what could be troubling economic times, rather than as a binding and significant piece of diplomacy.
Trade negotiations are typically notoriously complex, layered and protracted, and drag on for years. The China-Australia Free Trade Agreement took more than a decade to negotiate, while the Canada-EU deal has yet to be applied in full, despite negotiations that started in 2007.
“The most extreme example is the Doha Round of World Trade Organisation negotiations, which dragged on for more than 12 years, and failed,” said Stephen Olson, research fellow at the Hong Kong-based Hinrich Foundation, a pro-trade lobby group, and a member of the US negotiating team for the original North American Free Trade Agreement (Nafta) deal.