On April 7, 2017, U.S. President Donald Trump and Chinese President Xi Jinping, at the conclusion of a two-day presidential summit in Palm Beach, Fla., agreed to a 100-day plan to launch new bilateral trade consultations. While the scope and the structure of the trade consultations are yet to be determined, this agreement appears to signal the two countries' willingness to co-operate and avoid trade stand-offs.
During a White House briefing, U.S. Secretary of State Rex Tillerson stated that the two leaders had established what he called a "new high-level framework for negotiations" to be known as the U.S.-China Comprehensive Dialogue, based on the four pillars: a diplomatic and security dialogue; a comprehensive economic dialogue; a law enforcement and cybersecurity dialogue; and a social and cultural issues dialogue.
U.S. Commerce Secretary Wilbur Ross emphasized in the briefing that the 100-day timeframe, "given the range of issues and the magnitude...may be ambitious, but it's a very big sea change in the pace of discussions." He went on to note that the dialogue was "a very important symbolization of the growing rapport between the two countries." The main objective of the U.S. includes increasing American exports to China while reducing the net trade deficit, which totalled US$347 billion in 2016.
Again, as in the case of NAFTA renegotiations discussed in our previous international trade briefs, the rhetoric and aggressive posture during the electioneering campaign of candidate Trump, is not being reflected in President Trump's post-election actions. The reference to the "growing rapport" between the two countries by Secretary Ross would suggest that we can look forward to potentially seeing a more diplomatic and conciliatory approach to resolving the trade and other differences between the U.S. and China.
In the meantime, Canada and China have already engaged in exploratory discussions for a possible free trade agreement (FTA), holding the first set of face-to-face discussions in February of this year. Last month, the Government of Canada launched public consultations on FTA negotiations, and a second round of discussions is expected to take place later this month.
Canadian businesses are encouraged to participate in the consultation process by making submissions before the deadline of June 2, 2017, and monitor developments in future trade discussions.
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