A US-China deal on agricultural products, trade, financial services, investment and energy will likely make little difference to the US trade deficit.
The unexpectedly friendly meeting between the US and Chinese presidents in April is showing signs of bearing fruit – but it is not clear how much.
On Friday China promised to increase access for US financial firms and natural gas imports, and open up markets for beef and chicken.
It is part of 100 days of talks designed to ease trade friction between the world’s two largest economies, with tensions stoked by Donald Trump’s complaints over the trade imbalance and Chinese market barriers.
China’s Deputy Finance Minister Zhu Guangyao said: “Both sides have agreed, on the basis of the 100-day China-US economic cooperation plan, that we will discuss extending that into a one-year economic cooperation plan, and boost actions aimed at promoting the economic exchange between China and the US.”
The measures include the lifting of a 2003 ban on importing American beef linked to concerns about ‘mad cow’ disease, and China being allowed to send cooked poultry to the US.
Not a breakthrough
The US trade deficit with China was $347 billion last year. It is not clear how much difference this will make in the near-term.
Ker Gibbs, the chairman of the American Chamber of Commerce in Shanghai, said the measures were a good beginning but not a breakthrough.
“Past foot-dragging means we won’t celebrate until these promises are executed,” Gibbs said, calling the opening in the electronic payments market “mainly symbolic”.
“This should have been done years ago when it would have made a difference. At this point, the domestic players are well entrenched so foreign companies will have a hard time entering the China market.”
China’s UnionPay system has had a near monopoly for card payment services.
Martin Wolf: What the US-China deal tells us about the future of global trade https://t.co/Usa8uBnpCD
— Martin Wolf (@martinwolf_) May 12, 2017
US says China trade relations reach a “new high.” Experts aren't so sure. https://t.co/emr397mIdD
— Simon Denyer (@simondenyer) May 12, 2017
U.S.-China trade deal opens China to US beef & gas, but unlikely to have large impact on trade deficit. Via
latimes</a> <a href="https://t.co/LNkjOnvqLp">https://t.co/LNkjOnvqLp</a></p>— NBR (NBRnews) May 12, 2017
Cooperation, but no progress on big trade issues: eg China's steel/aluminum overcapacity; US national security cases https://t.co/wRVZ9qYVuC
— Chad P. Bown (@ChadBown) May 12, 2017