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Business

US and China announce deal aimed at reducing trade gap

© JIM WATSON, AFP file US President Donald Trump (R) and Chinese President Xi Jinping (L) shaking hands during dinner at the Mar-a-Lago estate in West Palm Beach, Florida on April 7, 2017

Text by FRANCE 24

Latest update : 2017-05-13

Beijing and Washington on Friday unveiled a trade deal aimed at reducing the US trade deficit with China, as the Kushner family’s real estate company abandoned a business programme targeting Chinese investors.

The trade deal would give US beef, natural gas and certain financial services access to China's massive market of 1.37 billion people. In exchange, the US would lift barriers to Chinese cooked chicken products.

The deal seems to be part of warming trade relations between the US and China. Despite President Donald Trump’s aggressive rhetoric against China throughout the US presidential campaign, Trump and Chinese President Xi Jinping launched a 100-day action plan on economic cooperation last month.

In Beijing, foreign ministry spokesman Geng Shuang said the two countries "enjoy very close economic cooperation".

"The two sides decided to press ahead with this economic plan and ... much progress has been made in a short amount of time," Geng told reporters during a regular press conference on Friday.

US Commerce Secretary Wilbur Ross told reporters at the White House that Friday’s deal will help reduce the US trade deficit with China, which reached nearly $350 billion last year.

Ross called the agreement a “herculean accomplishment” and “more than has been done in the whole history of US-China relations on trade".

Meaty details

Under the agreement, China will authorise US beef imports by July 16 while the United States will lift barriers on Chinese cooked poultry exports "as soon as possible".

China banned US beef following a case of mad cow disease in the United States in 2003.

Beef is rising in popularity in China. The country's residents are projected to eat roughly 8 billion kilograms of the meat this year, according to the US Department of Agriculture's Foreign Agricultural Service. That is a rise of more than 40 percent over the past five years.

The deal also has implications for US natural gas and financial services. Chinese companies would be allowed to buy liquefied natural gas from the US, while US firms providing credit rating services and electronic payment services would gain greater access to Chinese markets.

'Paltry trade benefits'

However, experts said the deal would fail to substantially reduce the US trade deficit with China, which is by far the biggest imbalance America has with any country.

A report by Capital Economics consultancy expected "paltry trade benefits" from the deal because it would amount to "just a few billion dollars".

The agreement "won't make any meaningful difference to the bilateral trade imbalance, which could still trigger a flare-up of tensions between the two sides in the future", it said.

Kushner family withdraws from investment-visa swap

But trade with China hit a snag for one particular company Friday.

The real estate company owned by the family of US President Donald Trump's son-in-law and adviser withdrew from a controversial sales pitch to Chinese investors involving US visas.

Nicole Kushner Meyer, the sister of White House aide Jared Kushner, had headlined events in Beijing and Shanghai last weekend that encouraged Chinese businessman to invest more than $150 million in a US luxury apartment complex.

In exchange, investors would be eligible for the US’s EB-5 visa program that offers US residency in exchange for at least $500,000 investment in a US business that must also create at least 10 American jobs.

Meyer’s participation raised conflict-of-interest concerns after it emerged that she had mentioned her brother's name during the sales pitch for the investment-visa exchange.

Kushner, who is married to the president’s daughter Ivanka, resigned as chief executive of Kushner Companies in January in order to begin his job as White House adviser. His work involves serving as a liaison between the administration and Beijing.

The Meyer and the Kushner family company will not attend a series of events advertising the investment programme this weekend, James Yolles, spokesman for the firm, said.

(FRANCE 24 with REUTERS, AFP, and AP)

Date created : 2017-05-12

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