US-China trade talks collapse was ‘not normal’, says veteran US negotiator, as focus turns political

Face-to-face talks are set to resume in Shanghai on Tuesday and Wednesday for the first time since May

Veteran US trade negotiator Claire Reade warns economics are now ‘not the driver’ of talks as Washington political consensus against China grows

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Overall trade between the world’s two largest economies has been declining, and in the first half of 2019, China’s exports to the US fell by 8.1 per cent to US$199.4 billion, while imports from the US dropped by 29.9 per cent to US$58.9 billion. Photo: EPA

Published: 1:39pm, 29 Jul 2019Updated: 11:27pm, 29 Jul 2019

The dramatic collapse in US-China talks in May suggested that Chinese negotiators did not have full political backing for the concessions they proposed to reach a deal to end the trade war, according to a veteran US trade official ahead of the resumption of face-to-face negotiations this week in Shanghai.

China was reported to have made last minute, large-scale edits to a near-150 page trade agreement draft, which scuppered the prospects for a deal after 11 rounds of negotiations.

The changes suggested that Chinese negotiators never “really connected with all the people who needed to be connected to in order to make the deal”, said Claire Reade, who spent eight years negotiating with China as a senior figure in the Office of the United States Trade Representative (USTR).

The unexpected changes mean there “is going to be a premium on being very careful and conservative” in future talks on the Chinese side, Reade told the South China Morning Post.

Claire Reade left her role as assistant United States trade representative for China Affairs in 2014. Photo: Handout

“It is very normal for a piece of text to be proposed and the other side to then red line it back, but you don't have text that's been in place for months and all of a sudden come back striking-out what has been agreed. That's not normal – something happened,” Reade explained.

Talks are set to resume on Tuesday and Wednesday as the two sides meet for the first time since May, with some discussions having already taken place during several phone calls in recent weeks. The resumption of talks came after President Xi Jinping and his US counterpart Donald Trump held a summit in Osaka at the end of June and agreed to postpone an escalation in the trade war, which has now dragged on for more than a year.

China has since bolstered its negotiating team with the addition of Commerce Minister Zhong Shan, a perceived Communist hardliner, with whom Reade negotiated with during her years in China between 2006 and 2014. Zhong joins Vice-Premier Liu He at the top of China’s team, with Liu viewed as the more liberal figure of the two.

“Liu He’s sophisticated international economic perspective of where the long term best interest of China lies is one viewpoint, but someone who is more domestically-oriented and may have a strong sense of domestic politics as opposed to optimal economic outcomes, then that can create a different decision making mix and perspective,” Reade observed.