Commerce Sec Wilbur Ross: 10 U.S.-China Trade Agreements ’Herculean Accomplishment’

Trump, Xi Jinping Jim WatsonGetty
Jim Watson/Getty

WASHINGTON, D.C. — China and the United States have agreed to many initial cooperative economic actions as part of a 100-day plan that Presidents Donald Trump and Xi Jinping settled on during their Florida Summit, U.S. Secretary of Commerce Wilbur Ross explained on Thursday.

Just one month after the April summit, the two countries have come to these initial agreements on agricultural trade, financial services, investment, and energy.

Under the new agreement between the two nations, China is to start accepting imports of U.S. beef no later than July 16, 2017 with conditions stipulated under the 1999 Agricultural Cooperation Agreement. The U.S. and China have also agreed to resolve outstanding issues with importing Chinese origin cooked poultry to the U.S. as soon as possible. The U.S. will publish a rule on the issue no later than July 16, 2017.

Ross said this has been going on for years. He quantified this as a $2.5 billion dollar market that is opening up for U.S. beef for which “We now, for the first time, have a precise approval and precise date by which beef shipments will start.” Ross later said the U.S. market share of that  will depend on effectiveness of cattle people’s marketing, but he expects that U.S. beef will be popular in China.

The Secretary was later asked if the Administration saw any safety issues with importing the poultry or if the poultry industry anticipates a drag on U.S. poultry prices. Ross replied, “The Department of Agriculture feels that this will not cause major injury to the U.S. poultry industry.”

Ross called the third item on a list of ten agreements a very big, contentious issue:

China’s National Biosafety Committee (NBC) is to hold a meeting by the end of May 2017, to conduct science-based evaluations of all eight pending U.S. biotechnology product applications to assess the safety of the products for their intended use…

He said this is about applications that have remained pending for many years. This will accelerate approvals, according to the Secretary.

The fourth agreement states that the U.S. invites China to receive U.S. imports of LNG (liquefied natural gas). “Companies from China may proceed at any time to negotiate all types of contractual arrangement with U.S. LNG exporters, including long-term contracts, subject to the commercial consideration of the parties,” according to the U.S. Department of Commerce announcement of the ten agreements.

“This is a very big change and this is very good news for the LNG industry,” said Ross. Later asked about concerns with this move, Ross referred to Dow Chemical, stating that that company has indicated that, as long as the LNG exports don’t exceed 15-30 percent of total output, “It should not be a problem for domestic chemical companies.” Ross said there shouldn’t be an adverse effect on consumers.

Ross later stated that as China attempts to wean itself off of coal, it is significantly dependent on outside sources for its LNG, much of which comes from Russia. He said this allows China to diversify their sources and “will provide a huge export market for American LNG.”

Fifth on the list is a July 16, 2017 deadline for China to allow “wholly foreign-owned financial services firms in China to provide credit rating services, and to begin the licensing process for credit investigation.”

Sixth is a U.S. Commodity Futures Trading Commission (CFTC) six month extension of current no-action relief to Shanghai Clearing House. Further extensions could range to three years. The CFTC intends to do this by July 16.

By the same deadline, China shall issue any further guidelines and “allow wholly U.S.-owned suppliers of electronic payment services (EPS) to begin the licensing process.” The Commerce Department release states, “This should lead to full and prompt market access.”

Ross said of the eighth agreement item:

The Chinese would like to enter the U.S. banking markets in the same way. Applicable U.S. federal regulatory authorities remain committed to apply in the United States the same bank prudential supervisory and regulatory standards to Chinese banking institutions as to other foreign banking institutions, in like circumstances and in accordance with U.S. law.

Agreement nine read, “China is to issue both bond underwriting and settlement licenses to two qualified U.S. financial institutions by July 16, 2017.”

Ross said this request has been “longstanding to the Chinese.”

The tenth initial agreement is, “The United States recognizes the importance of China’s One Belt and One Road initiative and is to send delegates to attend the Belt and Road Forum in Beijing May 14-15.”

In addition, the U.S. Commerce Department announcement welcomed Chinese investment and participation in the SelectUSA Investment Summit set to commence June 18-20 in Washington, D.C.

Ross stated that the document laying out the ten agreements is an official document signed by both the United States and China. In response to questions on whether these agreements related to diplomatic negotiations with China concerning North Korea, Ross said there was not a quid pro quo in the discussions of these agreements.

These ten agreements are merely initial within the 100-day action plan under the framework of the U.S.-China Comprehensive Economic Dialogue, according the the Department of Commerce. Co-chairs Secretary of the Treasury Steven Mnuchin and Secretary of Commerce Ross and Chinese Vice Premier Wang Yang lead the negotiations on these issues and objectives for next steps.

The Commerce Department stated also that both sides are to begin discussions on a “one-year plan to further solidify actions in promoting U.S.-China economic engagement and cooperation.” After the 100-day plan is implemented, the two countries hope to deepen engagement on other issues this summer at the first Comprehensive Economic Dialogue meeting in Washington, D.C.

Ross said there would be another set of prioritizations in the one-year plan. He called this a “Herculean accomplishment to get this done. This is more than has been done in the whole history of U.S.-China relations on trade.”

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