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This Week In Trade

Blinken, Sullivan to meet with Chinese counterparts as Tai awaits Senate vote

Posted: March 15, 2021

Secretary of State Antony Blinken and White House National Security Adviser Jake Sullivan will head to Alaska on Thursday to meet with their Chinese counterparts in a discussion unlikely to focus much on trade, or result in the reset of relations that Beijing has been looking for with the Biden administration.

The Anchorage meeting will be the first in-person discussions between high-level U.S. and Chinese officials since President Biden took office. Blinken and Sullivan have said the talks will cover issues on which the two sides do not see eye to eye -- specifically, China’s human rights abuses in Xinjiang, crackdown on democracy in Hong Kong and assertive actions toward Taiwan.

Those three issues are precisely what Chinese Foreign Minister Wang Yi, who will attend the meeting, has said the two sides should avoid discussing. Wang has repeatedly called for a reset in U.S.-China relations and suggested the best way to move the bilateral relationship forward is for the U.S. to stop meddling in China’s “internal affairs.”

Sullivan on Friday said the talks likely would not focus much on trade and economic issues, like the phase-one deal between the two sides. However, the meeting could set the tone for the U.S.-China relationship under Biden.

The U.S. has more work to do with its allies before tackling economic issues, Sullivan said.

Biden officials have emphasized that the Alaska meeting will follow the president’s virtual Quad talks with the leaders of Australia, Japan and India, as well as Blinken’s meetings this week with counterparts in southeast Asia, including in Japan and South Korean. The U.S. diplomatic outreach is part of the Biden administration’s strategy of dealing with China from “a position of strength,” according to Sullivan.

China has broadly warned countries against engaging in “false multilateralism” and using small group structures to counter China. Countries like those in the Quad “should not target or harm the interests of third parties,” Chinese Foreign Ministry spokesman Zhao Lijian said during a press conference on Friday. “We hope that relevant countries will uphold the concept of openness, tolerance, and win-win results, not to engage in closed and exclusive ‘small circles,’ and do more things that are conducive to regional peace, stability and prosperity.”

The U.S. and China have yet to announce when they will hold a second six-month check-in on the phase-one deal, as required by the agreement. It took effect last February. One issue likely holding up a high-level check-in is that the Senate has yet to confirm Katherine Tai as U.S. Trade Representative. The Senate Finance Committee unanimously approved Tai’s nomination earlier this month, fueling speculation that the upper chamber would quickly approve her nomination. Senate Majority Leader Chuck Schumer (D-NY) filed cloture on her nomination last week, setting up a vote that could come later this week.

USTR has not responded to queries about the one-year evaluation of the phase-one deal.

Geneva goings-on

The World Trade Organization’s Dispute Settlement Body will hold a special meeting on Friday to adopt a panel report that faulted the U.S. Commerce Department for improperly calculating some antidumping and countervailing duties on Korean goods. The panel report, circulated in January, found Commerce had too hastily resorted to using “adverse facts available” in certain trade remedy investigations, which had the effect of driving up duties on Korean goods.

The scheduling of a special DSB meeting indicates the U.S. has accepted the WTO panel’s decision and will not appeal the case. If the U.S. were to appeal, the special meeting would be canceled and the appeal would not be heard, as the Biden administration has maintained the U.S. hold on nominees for the WTO’s Appellate Body.

Negotiators this week are meeting in Geneva hoping to advance talks on curbing harmful fisheries subsidies. Members had initially hoped to conclude the talks by the end of 2019, as called for in United Nations sustainable development goals. That deadline was pushed to the WTO’s June 2020 ministerial, which was postponed until November 2021. Deep divisions remain in the talks over the level of obligations that developed and developing members should undertake.

Plurilateral talks on e-commerce rules also will continue this week. Those talks have been subject to debate as India and South African have repeatedly raised concerns that plurilateral talks undermine the multilateral process, even contending such negotiations are “legally inconsistent” with WTO rules.

Events

  • The U.S. Chamber of Commerce on Tuesday hosts a virtual discussion with Irish Taoiseach Michael Martin on building trans-Atlantic economic resilience. President Biden will meet virtually with Martin on St. Patrick's Day.
  • The Center for a New American Security on Tuesday will discuss how to craft a national technology strategy to best compete with China. Panelists include James Geurts, who is performing the duties of under secretary of the Navy; former Principal Deputy Director of National Intelligence Sue Gordon, now a senior adviser at Pallas Advisers; Loren DeJonge Schulman, vice president for research and evaluation at the Partnership for Public Service; Megan Lamberth, research associate in CNAS’ technology and national security program; Martin Rasser, a senior fellow in CNAS’ technology and national security program; and CNAS CEO Richard Fontaine.
  • Ambassadors to the U.S. from Costa Rica, the Dominican Republic, El Salvador, Honduras, Guatemala and Nicaragua on Tuesday will participate in a discussion hosted by the World Trade Center in Washington, DC, on trade, investment and near-shoring opportunities.
  • The Senate Foreign Relations Committee on Wednesday will hold a hearing on strategic competition with China. Witnesses will include Elizabeth Economy, a senior fellow at the Council on Foreign Relations, and Tom Shugart, an adjunct senior fellow at CNAS.
  • The Washington International Trade Association on Thursday will host a webinar on opportunities for engagement on trade and gender. Participants will include Pamela Rosemarie Coke-Hamilton, the executive director of the International Trade Center; Heather Mae Kipnis, inclusive business lead at the IFC Gender and Economic Inclusion Group; Laura Lane, chief of corporate affairs, and communications and sustainability officer at UPS; Canadian Chief Trade Commissioner Sara Wilshaw; and Chilean Vice Minister of Trade Rodrigo Yanez Benitez.
  • Deputy Assistant Secretary of State for Trade Policy Matt Murray on Thursday will participate in a discussion on secure, sustainable and values-based supply chains hosted by the American Institute for Contemporary German Studies. Murray will be joined by Katharina Dröge, the Alliance 90/The Greens group’s parliamentary spokesperson on economic policy and a member of the German Bundestag; Stormy-Annika Mildner, the executive director of the Aspen Institute Germany; Peter Rashish, the director of AICGS’ geoeconomics program; and Marianne Schneider-Petsinger, a senior research fellow at Chatham House.
  • The Senate Finance Committee on Thursday will hold a hearing on how to improve customs enforcement and fight forced labor. Witnesses include Julia Hughes, president of the U.S. Fashion Industry Association; Martina Vandenberg, founder and president of the Human Trafficking Law Center; Joseph Wrona, member of the United Steelworkers in Buffalo, NY; and Leonardo Bonanni, founder and CEO of Sourcemap.
  • The Commerce Department’s Bureau of Industry and Security on Friday will hold a teleconference meeting with its emerging technology technical advisory committee.
  • European Commission Director General for Trade Ignacio Garcia Bercero on Friday will participate in a discussion on the EU’s new trade agenda hosted by the Peterson Institute for International Economics. He will be joined by Peterson’s Anabel Gonzalez and Marcus Noland.
  • The U.S.-China Economic and Security Review Commission on Friday will hold a hearing on U.S. investment in China’s military. -- Brett Fortnam (bfortnam@iwpnews.com)

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