Washington and Beijing began formal negotiations towards a bilateral investment treaty (BIT) in June 2008. A year later, the highly sensitive talks were halted until July 2013. The US is interested in getting Chinese restrictions on foreign ownership in about 100 sectors — from soybean oil and automobiles to life insurance and other financial services — lifted for US companies which want to expand their market presence there. The Chinese government is interested in getting more security for highly-scrutinised Chinese investments in the US and its massive holdings of US sovereign debt ($1.3 trillion).
In late 2013, China agreed to initiate talks on a possible BIT with the European Union as well.
Beijing’s top priority in any phase one trade deal with the United States is the removal of existing tariffs on Chinese goods.
China and the United States are “moving closer to agreeing” on a “phase one” trade deal, according to Communist Party’s official People’s Daily.
China said it will raise penalties on violations of intellectual property rights in an attempt to address one of the sticking points in trade talks with the US.
Trump has decided that rolling back existing tariffs, in addition to canceling a scheduled Dec. 15 imposition of tariffs on some $156 billion in Chinese consumer goods, requires deeper concessions from China.
Two sides ‘not on the same page’ on issues such as the removal of tariffs. Beijing will not buy agricultural goods it may not need ‘and definitely will not agree to it being written into a deal.
The two sides have found themselves at odds over the finer details of an agreement, including Chinese agricultural purchases from the US and the level of tariff relief.
China wants the US to drop 15% tariffs on about $125 billion worth of Chinese goods that went into effect on Sept. 1. It is also seeking relief from earlier 25% tariffs on about $250 billion of imports.
White House trade adviser Peter Navarro said the United States’ trade deal with China will require three phases.
Chinese officials are working on the text of an agreement on trade in close contact with US negotiators, and have begun discussions on the next stage.
China wants to hold more talks this month to hammer out the details of the “Phase One” trade deal touted by President Trump before Xi Jinping agrees to sign it.