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China, the U.S. agrees to enforce trade negotiations given the virus controversy

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China, the U.S. agrees to enforce trade negotiations given the virus controversy
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Chinese Vice Prime
Minister Liu He’s introducing the U.S. President Donald Trump signed a
“Step One” trade deal with China in the Oval Office at the White
House on October 11, 2019, in Washington, DC, in a letter from Chinese
President Xi Jinping.
Chinese and US trade
negotiators decided on Friday to “establish favorable conditions” for
the phase one trade agreement concluded in January, officials said, given
recent strains over the coronavirus pandemic.
Vice-Prime Minister Liu
He, who led the Beijing talks, had a morning call with US Trade Representative
Robert Lighthizer and Secretary of State Steven Mnuchin.
“Both sides said they
should strengthen macroeconomic and public health cooperation, strive to create
a favourable atmosphere and conditions for the implementation of the phase one
US-China economic and trade agreement, promoting positive results,” a notice
from China’s Ministry of Commerce said.
U.S. officials said,
following the meeting, that the sides settled on “strong steps” in
developing the policy structures required to make the deal a success. They also
agreed that in spite of the current global health emergency, both countries
fully expect to meet their obligations under the agreement in a timely manner,
said the Office of the US Trade Representative and Treasury in a statement. The
countries have also agreed to maintain communication and coordination.
The call is believed to be
the first time they have officially spoken about the agreement since it was
signed, and comes after both nations traded barbs over the deadly virus.
Last week, US President Donald
Trump announced fresh tariffs against China, alleging that there was
information tying COVID-19 to the top security lab in the central city of
Wuhan, where the pathogen first appeared late last year. The claims have been
refuted by China.
In January, Beijing
decided to buy an extra USD 200 billion in US goods over two years, double the
amount obtained in 2017, signaling a pause in the grinding trade war that had
battered the global economy for almost two years.
Analysts, however, doubt
whether China would be able to fulfill its optimistic obligations after the
virus epidemic nearly stopped commercial activity earlier this year. Recovery
has been slow since, and consumption has yet to bounce back to pre-virus
levels.
China’s imports plummeted
14.2 per cent in April, following a 0.9 per cent decline in the month before,
given the fact that the nation had already put coronavirus under local
regulation.
Nick Marro of The
Economist Intelligence Unit said that “shipments from the US remain well below
the levels needed to achieve the purchase pledges under the trade accord”. He
added that the pandemic has disrupted supply and demand on both sides of the
Pacific, highlighting risks around the survival of the deal.
While China’s exports
exceeded forecasts of an increase of 3.5 per cent in April, analysts agree that
this is unlikely to continue as data has been bolstered by imports of medical
supplies against the global pandemic, as well as by the backlog of sluggish market
resumption in the first quarter.
Mnuchin said this week,
though, that he expected China to stick with the agreement reached this year,
speaking of “extremely serious implications” if that did not happen.
The US has a trade deficit
with China and the goal has been to realign the trade relationship between the
two nations.

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