U.S.-China meeting concludes with agreements on trade finance, other issues
December 8, 2008
World Trade\Interactive
The final meeting of the U.S.-China Strategic Economic Dialogue under the Bush administration concluded Dec. 5 in Beijing with the two sides reaching agreements and pledging further cooperation on a number of issues. Officials from both countries have urged the incoming Obama administration to continue the SED, which a joint fact sheet called “an effective framework for resolving differences and addressing challenges arising from fast-moving bilateral trade and investment issues” that has “advance[ed] the fundamental interests of our countries and peoples.”
According to information from the Treasury Department, achievements at the recent SED meeting include the following.
Trade Finance. To maintain exports of U.S. and Chinese goods and services,
including to emerging and developing economies, in the current difficult financial conditions, the U.S. Export-Import Bank and the Export-Import Bank of China agreed to make available up to $20 million in combined additional resources for trade financing facilities. This is expected to increase the availability of trade finance by $38 billion due to the ability of short-term trade financing to support three or more times the value of financing in trade volume during a year.
Import Safety. The U.S. and China reaffirmed the implementation and progress of existing memoranda of agreement and understanding concerning food and product safety, with the aim of enhancing cooperation and dialogue on product quality and food safety. They also agreed to participate in the activities and capacity building of international organizations related to food and agricultural products.
Rules of Origin. A joint experts dialogue was held on rules of origin issues and another such dialogue is planned before the next SED.
Investment. Against the background of deteriorating economic conditions worldwide, the U.S. and China highlighted the importance of and their shared commitment to fighting protectionism and promoting open trade and investment. To this end the second meeting of the joint Investment Forum was held Dec. 3, with specific areas of discussion including (a) the creation of conditions that will increase bilateral investment and enhance transparency and predictability for investors and (b) how investment can make sustained contributions to bilateral economic cooperation and development.
In addition, the U.S. reaffirmed that it welcomes foreign investment, including in its financial sector and commercially-oriented investments made through China’s foreign exchange reserves and sovereign wealth fund, as well as its commitments to (a) the open and non-discriminatory principles for recipients of sovereign wealth fund investment identified by the Organization for Economic Cooperation and Development and (b) ensure that the Committee on Foreign Investment in the United States process accords consistent and fair treatment of all foreign investment without prejudice to the place of origin.
Financial Services. To further open China’s financial services sector, the following steps will be taken.
• Foreign incorporated banks in China will be allowed to trade bonds in China in the inter-bank market, both for their customers and their own accounts, on the same basis as Chinese-invested banks.
• China’s State Administration of Foreign Exchange will allow foreign banks to increase their liquidity through either guarantees or foreign currency loans from overseas affiliates on a temporary basis, notwithstanding foreign currency debt quotas.
• China’s Industrial Bank announced its adoption of the Equator Principles, an important step in the implementation of China’s green credit program that demonstrates the increased emphasis Chinese banks and regulators are placing on borrowers adhering to strong environmental standards in China and abroad.
• The U.S. encouraged China to continue and accelerate the appreciation and flexibility of its currency.
Transportation. The first meeting of the joint Transportation Forum was held Dec. 3 and working groups were established to discuss priority areas of cooperation, including railway technologies, urban congestion, innovative financing, transport of hazardous goods and disaster assistance coordination.
Innovation. The second U.S.-China Conference on Innovation and Commercialization held Dec. 2 brought together government, industry and university leaders to address key challenges and opportunities for fostering innovation and commercialization. The two sides discussed ways to develop human talent for innovation, attract financial investment for entrepreneurial enterprises, adapt policies and regulatory frameworks to promote and protect innovation, commercialize technologies and recognize the importance of market-driven standards.
Metrology. The U.S. Department of Commerce and China’s General Administration of Quality Supervision, Inspection and Quarantine signed a Protocol for Cooperation on Metrology, Standards and Conformity Assessment that will facilitate bilateral trade, improve product quality and increase the development of technical standards and collaboration.
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