Irregularities hinder trade deal - Harry Broadman

Harry Broadman

Analysts watched the 'announcement' of a first trade deal between China and the US with amazement. Former US trade negotiator Harry Broadman points out that typically you wait till you have something in writing, in both languages, to avoid hiccups before the signing, he explains to Reuters. 

Reuters:

It could be weeks before the 86-page agreement is translated into Chinese and further details are released. Several Chinese officials this week said the wording of the deal remained a delicate issue and care was needed to ensure expressions used in text did not re-escalate tensions, raising concerns it could still unravel. 

Jorge Guajardo, a former Mexican ambassador to China who is now a senior director at McLarty Associates, said both the dust-up with the Mexicans over U.S. plans to monitor changes to Mexican labor rules, and the delayed release of the text of the China deal raised questions about how Lighthizer operated. 

"Both Mexico and China seem to have been caught off guard," Guajardo said. "It's troubling. It does indicate a bit of a pattern on the U.S. side of presenting different agreements than their parties think they agreed to." 

Harry Broadman, a former senior USTR official, said there was no reason the Mexico issue should have spilled into public view. Announcing the trade deal with China before the text was translated was also unusual, he said. 

"That is not the procedure usually followed in trade negotiations worldwide. Usually you speak after you have something in writing, and both sides release it," Broadman said.

More in Reuters.


Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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US does not want more market, but contain China - Arthur Kroeber

Arthur Kroeber

The disruption caused by trade tensions is not going to give the US more market share for American companies, says leading economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know® to Bloomberg. And that is not what the US wants: "The USTR is not trying to bargain with Beijing: it is trying to force a deep change in behavior."

Bloomberg:

The U.S. Trade Representative’s office, along with national security officials labeling China a "strategic competitor" ultimately aren’t interested in things such as greater market access for American companies, says Arthur Kroeber, head of research at economic consultancy Gavekal Dragonomics in Beijing. Instead, these Trump administration elements are engaging in an effort to contain the growing sway of a state-driven Chinese economic model on the global stage, he argues. 

"The USTR is not trying to bargain with Beijing: it is trying to force a deep change in behavior," Kroeber wrote in a March 2 note. The policy "is to either get China to dismantle its industrial-policy edifice and conduct its economy more along Western lines, or failing that, ensure the U.S. defeats China in the race for technological supremacy." 

Kroeber added that "the odds are that the trade and security hawks will have the better of the battle in 2018" in the administration, unless supporters of globalization such as White House economic adviser Gary Cohn can organize greater support from U.S. companies with major China operations that could be under threat.

More in Bloomberg.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Is China´s Great Firewall a trade-barrier? - Sara Hsu

Sara Hsu

The USTR, the United State Trade Representative, has qualified the Chinese Great Firewall,  blocking and filtering internet traffic, as a trade barrier. Analyst Sara Hsu is not that sure, and suggests more research to find this our, in the Diplomat.

Sara Hsu:

At present, international online sales account for only a small percentage of total online sales. This is because international shipping costs for goods purchased by Chinese consumers on American websites remain high compared to average purchase prices for online retail goods, restricting U.S.-China online retail sales to relatively low levels. Most non-bulk, lighter manufactured products covering such a distance move via air transportation. Still, online stores with branches in China, such as Amazon, are able to get around the firewall and to ship retail products domestically by maintaining a local presence. For truly international sales from the U.S. to China, shipping costs may decline in the future, and American firms do not want to reduce sales and marketing opportunities even before they open up. 

To truly understand the impact of China’s firewall on international online commerce, more energy must be devoted to scrutinizing the costs and benefits surrounding this industry. The financial and economic impact of firewall restrictions on online commerce is a research topic that is vastly understudied, so there is no information about how much business American firms lose annually due to Chinese firewall blocking. In addition, while the World Trade Organization does study e-commerce, the implications of China’s firewall on international online business has not been examined. E-commerce issues analyzed by the WTO include discussion of IT goods, internet infrastructure services, electronically traded services, and digital products, and not online international sales per se. 

To some extent, then, the impact of the Great Firewall on international e-commerce and trade is a gray area, and assertions supporting or rejecting the idea that the firewall is a trade barrier must be bolstered with concrete economic and regulatory study. As use of online sales spreads, as is occurring rapidly in China, international retail sales are likely to expand on the assumption that shipping constraints will ease. Until that time, this controversial area should be made a point of study, both by the Office of the US Trade Representative, and by the World Trade Organization.

More in the Diplomat.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´request form.

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