New approach needed following ‘phase one’ failure, says analyst
The Trump administration’s “phase one” trade agreement with China alienated U.S. allies while failing to deliver on its promises of mammoth purchases by Beijing, wrote trade policy expert Chad Bown on Monday in calling for a new approach. “Only a group of countries working together and sharing the burden will be able to make progress with China,” said Bown in a Peterson Institute for International Economics blog.
“The lesson from year one of the U.S.-China agreement is that purchase commitments did not work,” said Bown. “Attempting to manage trade with purchases and an intention to reduce the bilateral deficit is the wrong approach. It distracts from the engagement necessary to address the costly incompatibilities of the Chinese economic system with the more market-oriented economies of the United States, European Union, Japan, and other like-minded countries.”
Some elements of the agreement should be retained, including China’s commitments to reduce barriers to food imports and to allow more foreign investment along with promises to crack down on intellectual property violations, he said. The pact was supposed to lead to negotiations for reform of predatory Chinese trade practices, such as forced technology transfer, but discussions never were held.
President Biden has not spoken to Chinese President Xi Jinping since taking office. The White House says it is reviewing the China-U.S. trade relationship. Biden has discussed China during phone calls with leaders of Japan, South Korea, Australia and Europe, said press secretary Jen Psaki on Monday. “So part of our strategy is certainly engaging with partners in the region and allies, and doing those calls and engagements first, and also having consultations with Democrats and Republicans on Capitol Hill.”