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US team in Beijing for trade talks after IMF ‘storm’ warning
BEIJING, Feb 11, 2019 (BSS/AFP) – US negotiators were in Beijing Monday
for a new round of high-stakes trade talks, hoping to reach a deal before the
March 1 deadline set by Donald Trump as the IMF warned of a possible global
economic “storm”.
Preliminary discussions had been expected to start on Monday, according to
the White House, before US Trade Representative Robert Lighthizer and
Treasury Secretary Steven Mnuchin step in for the main event on Thursday and
Friday.
In December, Washington suspended for three months its plan to increase
tariffs on $200 billion worth of Chinese imports — to 25 percent from the
current 10 percent — to allow time for negotiators to work out a trade spat
that has triggered fears of a global economic slowdown.
Deputy trade representative Jeffrey Gerrish was due to lead the US
delegation in preparatory meetings to begin on Monday, the White House had
said.
The talks will include officials from the agriculture, energy and commerce
departments.
Gerrish left his hotel in central Beijing on Monday morning without
talking to the media. Neither side offered any confirmation that talks
actually started.
Mnuchin and Lighthizer will be joined by David Malpass, Trump’s nominee
for president of the World Bank who has worked to limit the bank’s assistance
to Beijing.
The Chinese delegation will be led by Vice Premier Liu He, who will be
joined by central bank governor Yi Gang.
Liu, China’s chief trade negotiator, met last month with Trump, who
announced that a final resolution of the trade dispute would depend on a
meeting with Chinese President Xi Jinping “in the near future” to iron out
the “more difficult points” fuelling the spat.
While the two sides said major progress was made after talks last month in
Washington, more recent comments have jarred financial markets, amplifying
concerns about how the dispute will affect global growth.
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Trump said last week that he did not expect to meet his Chinese
counterpart before the trade truce expires on March 1, and top White House
economic adviser Larry Kudlow said that while Trump was “optimistic” about a
deal, a “sizable distance” still separated the two sides.
Washington is demanding far-reaching changes from China to address
commercial practices that it says are deeply unfair, including theft of
American intellectual property and myriad barriers that US and other foreign
companies face in the Chinese domestic market.
China has offered to boost its purchases of US goods during the truce, but
is likely to resist calls for structural changes to its industrial policy
including slashing government subsidies, said Louis Kuijs of Oxford
Economics.
“The US side will not fully remove the spectre of tariff hikes any time
soon,” Kuijs said, given that there is “broad support in the US for a hard
stance on China”.
The two sides have already slapped tariffs on more than $360 billion in
two-way trade, which has weighed on the two countries’ manufacturing sectors
and sent jitters through global markets.
– Economic storm –
The International Monetary Fund warned on Sunday of a possible economic
“storm” as growth forecasts dip.
It cited the trade row as one of four “clouds” over the global economy,
along with financial tightening, Brexit uncertainty, and China’s slowdown.
“We have no idea how it (the trade dispute) is going to pan out and what
we know is that it is already beginning to have an effect on trade, on
confidence and on markets,” IMF managing director Christine Lagarde told the
World Government Summit in Dubai.
Last month, the IMF lowered its global economic growth forecast for this
year from 3.7 percent to 3.5 percent.
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