American business community in China lacks confidence in ‘phase one’ trade deal, AmCham chief says
- Agreement ‘good for farmers’, but companies want to see structural changes to China’s business environment, says Tim Stratford, chairman of the American Chamber of Commerce in China
- US President Donald Trump more likely to use negotiations to support his political ambitions than American firms, he says
“Of course, it’s helpful for the farmers and I’m glad to see farmers benefit, but that’s not really what we’re looking for,” the former US assistant trade representative said on the sidelines of a business forum organised by the Center for China and Globalization in Beijing.
“It seems to fit the political goals of the president,” Stratford said. “But it’s not addressing the systemic trade issues that the business community would be concerned about on a long-term basis.”
The phase one deal is expected to include China buying more agricultural products from the US, and taking steps to further open up its financial services markets to American firms.
For its part, Beijing wants the US to cancel a new round of tariffs – on a range of Chinese goods, including laptops, smartphones and toys – that is scheduled to take effect on December 15.
White House economic adviser Larry Kudlow told reporters on Friday that the two sides had made “enormous progress” towards completing the deal.
Stratford, however, does not share Kudlow’s confidence.
“To be honest, it’s hard to be terribly optimistic between now and the presidential election,” he said.
“I think the presidential election is going to put some uncertainty into the process. If you’re President Trump, do you want to start retaliating against China again because we’re not making progress on phase two? If so, then that will undermine agreements that were made in phase one.”
Stratford said there had already been lots of opportunities to reach a consensus on the key issues.
“If we’re not able to solve that in phase one, after 13 or 14 rounds at the ministerial level, why should we be optimistic that we’ll be able to solve it in phase two?”
In an interview with Bloomberg News, US Commerce Secretary Wilbur Ross expressed optimism on Sunday that the US would reach a deal this month and said licenses would be coming “very shortly” for American companies to sell components to Huawei.
Trump on Sunday told reporters at the White House that a trade agreement, if one is completed, would be signed somewhere in the US. “First of all I want to get the deal,” he said after returning for a trip to New York. “The meeting place, to me, is going to be very easy.”
Ross said Iowa, Alaska, Hawaii and locations in China were all possible. He called the agreement “particularly complicated” and said the US was “making sure that each side has a very correct and clear, detailed understanding of what each side has agreed to.”
Beijing has been working hard to counter the global narrative that China is not a good place to do business, and to woo foreign investors with the promise of a more even playing field through initiatives like the foreign investment law, which takes effect in January and promises to reduce red tape.
But Stratford said that was not enough, as Beijing had not made any real effort to tackle the systemic issues that were of the greatest concern.
“For every government policy in China, there’s a contradictory policy,” he said. “The government says, ‘OK, we’d better do a bit more to help the foreigners’, but does that change industrial policies? Does it change that the state sector is dominant? No,” he said.
“As long as they have plans that Chinese enterprises should have more and more market share in China, in their sector and globally, we know that they will welcome us, but only with conditions,” he said.
“We [US negotiators] have to be very, very cautious and measured because they [the Chinese negotiators] will be cautious and measured in the way that will help us,” Stratford said.
Donald Trump says phase one of China trade deal is ‘ahead of schedule’
- ‘Probably we’ll sign it,’ US president says, ahead of meeting with Xi Jinping at Apec summit in Chile
- Steven Mnuchin and Robert Lighthizer spoke with China’s Vice-Premier Liu He about deal on Friday and signalled progress in negotiations over weekend
US President Donald Trump said on Monday that negotiations for the so-called phase one of the United States' trade deal with China were “ahead of schedule”.
“We are looking probably to be ahead of schedule to sign a very big portion of the China deal, and we’ll call it phase one but it’s a very big portion,” Trump said.
“That would take care of the farmers. It would take care of some of the other things. It will also take care of a lot of the banking needs.”
The comments come ahead of Trump’s meeting with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in Chile on November 16-17.
“So we're about, I would say, a little bit ahead of schedule, maybe a lot ahead of schedule,” the president said. “Probably we'll sign it.”
On Friday, Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer spoke with China’s Vice-Premier Liu He about the deal and signalled progress on negotiations over the weekend.
The Office of the US Trade Representative released a statement after the call, noting that both parties “made headway on specific issues”.
It was announced earlier this month that Beijing would buy US$40 billion to US$50 billion worth of US agricultural products, in exchange for a stop on the United States' scheduled October 15 tariff increase.
Officials, however, have left open the potential for a tariff increase on December 15.