US, China tiptoeing toward trade deal

(US-China Security & Diplomatic Dialogue, Nov 9, 2018)

The joint press conference in Washington on Friday after the second US-China 2+2 (“Diplomatic & Security Dialogue”) throws much light on the tango between the two big powers. Delhi must draw some serious conclusions.

Broadly, the American side is adopting a two-track approach – on the one hand, resorting to some grandstanding by rhetorically pressuring China while also underscoring at the same time that the all-important differences and disputes are being discussed and resolved, which is of course the core agenda for the Trump administration today, and, on the other hand, ensuring that effective cooperation and coordination at the military-to-military level ensures that no flashpoint or confrontation ensues.

It is a delicately poised tango, for sure, that will need both sides to share every moment. The press conference showed that US Secretary of State Mike Pompeo grandstanding and the Chinese Politburo member and director of the Office of Foreign Affairs of the CPC Yang Jiechi could achieve the feat, with US Secretary of Defence James Mattis and his Chinese counterpart State Councilor and Defence Minister Wei Fenghe moderating and conducting themselves as the adults in the room.

Pompeo taunted Yang and at times spoke provocatively, presumably with the larger US domestic audience in mind, to convey President Trump’s “maximum pressure” strategy. But Yang deflected the barbs and pushed back firmly where needed – such as on China’s “One China” policy or the South China Sea. Both also highlighted the positive aspects of the relationship, especially the upcoming summit in Argentina. There were some interesting nuances, too – such as on North Korea or Iran.

On North Korea, Pompeo confined himself to seeking China’s cooperation on the denuclearization issue and UN sanctions, while Yang insisted on a holistic approach whereby Washington and Pyongyang “will meet each other halfway, accommodate each other’s legitimate concerns, build trust, and advance denuclearization process and the establishment of a peace mechanism in tandem.”

On Iran, Pompeo tried to introduce into the agenda China’s imports of Iranian oil and Iran’s missile programme. Yang instead stressed the importance of the US’ “proper handling of the Middle East situation… in particular matters related to Iran… About the deal on Iran, it needs to be continued to be implemented and observed to – and the two sides should make – contribute – make continued contribution to peace and stability of the region.”

Pompeo was very specific on the controversial issue of Iran sanctions: “We hope to work with the Chinese Government and Chinese energy companies in this regard. Bringing Iran’s oil export revenues to zero is a critical component of this campaign, and we discussed this today.” Yang simply avoided making any public reference to the topic.

Mattis and State Councilor Wei altogether sidestepped the polemics and interestingly, the latter spoke for both, saying, “The two sides share the view that the two sides need to further step up strategic trust, properly handle differences, promote exchanges and cooperation, so that this military relationship will be a source of stability for the overall bilateral ties… We need to prevent frictions from other regions to spread into the military sector to keep this mil-to-mil relationship a source of stability.”

Xinhua has given a positive, forward-looking account of the discussions in Washington. It echoed Yang’s presentation that the Dialogue on Friday largely focused on preparing the agenda for the Trump-Xi summit. The Xinhua dispatch noted,

“The dialogue was candid, constructive and produced great results… The two sides spoke highly of the strategic leading role of the two presidents’ diplomacy in the bilateral relations, noting that under the current circumstances, their meeting carries great importance to the stability of bilateral ties. The two sides agreed to strengthen communication, keep close coordination and conduct elaborate preparations to ensure that the important meeting will yield positive results. In their talks, the Chinese and U.S. officials exchanged their views thoroughly on their own strategic intentions.”

The remarks at the press conference signaled that a mutually acceptable trade deal is indeed in the works, as President Trump had also hinted earlier in the week following his phone call to Xi. It appears that the summit in Argentina may witness some major announcement. In fact, Pompeo concluded his initial statement saying:

“In closing, I want to state that this was an incredibly productive conversation. The United States is not pursuing a Cold War or containment policy with China.

“Rather, we want to ensure that China acts responsibly and fairly in support of security and prosperity of each of our two countries.

“I hope that our discussions today as well as the upcoming discussions between Presidents Trump and Xi will yield tangible results towards this goal. I am confident that they will.”

The transcript of the press conference on Friday is here.

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