Fair and equal dialogue the key to solving China-U.S. trade dispute

Note: The following article is taken from the Chinese-language "Commentaries on International Affairs".

China's President Xi Jinping and United States President Donald Trump agreed to meet at the upcoming G20 Summit in Osaka during a phone call on Tuesday. They also agreed to have the trade teams from both countries continue to keep in contact in order to work towards resolving the dispute. News about the upcoming meeting between the two presidents has offered temporary relief for the world's anxious markets and given global stock markets an instant boost.

U.S. Trade Representative Robert Lighthizer at the Senate Finance Committee hearing on Tuesday, June 18, 2019. [Photo: IC]

But U.S. Trade Representative Robert Lighthizer's testimony in Congress after the phone conversation between the two presidents came as a surprise. At a Senate Finance Committee hearing, Lighthizer said that dialogue alone has proven to be unsuccessful in solving trade disputes between China and the United States. When asked what would happen if the talks failed to produce an agreement, he said he hadn't heard of any instrument that would do the job better than tariffs. But when speaking at a House Ways and Means Committee hearing, Lighthizer said the United States had an obligation to resolve the dispute in a way that improves the bilateral relationship and "preserves the competitive advantage of the United States."

In short, the U.S. trade representative is willing to resume the talks for the sake of China-U.S. relations, while at the same time signaling that more tariffs could be on the way. This is not a helpful attitude if he's genuinely seeking to find a way to resolve the current impasse.

China has always seen consultation and negotiation as the first option for resolving disputes, and has repeatedly expressed its willingness to work with the United States to find a solution. Beijing has also stated its bottom lines and principles: The key to China-U.S. economic and trade negotiations is to meet each other half way. Both sides should follow the consensus reached during the two leaders' meeting in Argentina last year, be respectful of each other's legitimate concerns, and hold talks on the basis of mutual respect, mutual benefit, and on an equal footing.

What has happened over the past year has shown that the extreme pressure Washington has been trying to put on China with regard to the trade issue has failed to achieve results. It hasn't had the effect Washington was hoping for, and it never will. Since the United States increased the tariff on 200 billion U.S. dollars of goods from China in May, Beijing has responded with countermeasures including additional tariffs on some 60 billion U.S. dollars of American imports, issued a warning against using China's rare earths to produce products aimed at containing China's development, and started to create a list of unreliable entities targeting companies taking actions that harm China's firms. These moves have made it clear that China is fully prepared for any malicious suppression of its economy.

Respect, good faith, equality, and mutual benefit are the key to ensuring that China continues to take part in the trade talks. The United States should have been well aware of China's core concerns and understood that China's red lines must not be overstepped and the bottom line not be challenged.

The G20 Summit will kick off in less than 10 days. Hopefully the two trade teams can find a way forward so that the differences between the two countries can be resolved. But if Washington insists on exerting pressure on China by threatening more tariffs while talks are going on, the result will be counterproductive. Only by sticking to dialogue on an equal footing and taking into account each other's legitimate concerns can China and the United States solve their problems.