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US demands fair trade ties with China

WASHINGTON — The Donald Trump administration launched its first round of trade talks with China in an unusually blunt manner yesterday, demanding a “fair, equitable and reciprocal” relationship, with more access to American-made goods and services.

WASHINGTON — The Donald Trump administration launched its first round of trade talks with China in an unusually blunt manner yesterday, demanding a “fair, equitable and reciprocal” relationship, with more access to American-made goods and services.

Noting the more than 200 per cent surge in Chinese exports to the United States in the last 15 years, which created a trade deficit of US$309 billion (S$423 billion) last year, Commerce Secretary Wilbur Ross insisted that change was necessary.

“If this is just the natural product of free market forces, we could understand it, but it’s not,” Mr Ross said in the opening ceremony of the one-day meeting between the world’s top two economies. “So it is time to rebalance our trade and investment relationship in a more fair, equitable and reciprocal manner.”

The talks are a continuation of the process undertaken by the previous two administrations, which the Trump administration has rebranded as the US-China Comprehensive Economic Dialogue (CED).

Treasury Secretary Steven Mnuchin said the talks with the Chinese delegation, led by Vice-Premier Wang Yang, would focus on concrete steps to provide greater access and a “level playing field” for US companies to the world’s second-largest market.

“We need to work together to maximise the benefit for both sides, but this is only possible if there is a fairer and more balanced economic relationship between the US and China,” Mr Mnuchin said.

“It means addressing the imbalances caused by the Chinese intervention in its economy,” he said, adding that “a more balanced economic relationship will create prosperity for our two countries and the world”.

During his campaign, Mr Trump attacked China for unfair trade practices, but his meeting with Chinese President Xi Jinping at his Florida resort in April prompted a change of rhetoric and the launch of a 100-day economic cooperation plan.

That led to specific but narrow achievements, including opening the Chinese market to US beef exports and pledges to remove barriers to US credit card transactions, credit ratings, and other financial services, including bond underwriting.

Mr Wang said the key point about the CED is the two countries are “having dialogue, not confrontation”.

“We don’t need to defeat each other in handling differences,” he cautioned, stressing that “confrontation will immediately damage the interests of both (countries)”.

Mr Wang also quoted a passage from Mr Trump’s 2009 business advice book, Think Like a Champion — which in turn quoted industry pioneer Henry Ford — saying, “Coming together is a beginning; keeping together is progress; working together is success.”

“China is ready to work together,” Mr Wang added.

Trade experts say that the CED will likely yield some small-scale agreements to grant US firms more access to some of China’s markets.

But the talks are not expected to solve major problems between the two nations, such as US complaints about China’s excess capacity in steel and aluminium and subsidies for state-owned enterprises, nor China’s complaints about US refusals to sell Beijing advanced technology products.

“What I think we will see is an attempt by both sides to be able to declare victory by coming up with a few very specific areas in which China agrees to open up its markets more and which the US can claim as victories,” said Dr Eswar Prasad, a trade policy expert at Cornell University. AGENCIES

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