Coronavirus Outbreak Will Not Benefit The US In Negotiations With China

The outbreak of coronavirus in China has so-far killed over 300 people and infected over 14,000 people. Not only the Chinese, but the global economy seems to have been impacted by the outbreak of coronavirus but the US should not expect any extra leverage in negotiations for a phase two trade agreement writes the Global Times.

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The state-run Chinese media states that if US officials are banking on the disease to gain more leverage for phase two trade negotiations, they are severely misguided.

The coronavirus outbreak will pose a grave difficulty for the Chinese economy, with some believing the pandemic will cut growth in the first quarter by two percentage points. But China will not and cannot give ground on core issues of national interests in the trade talks, especially at such a difficult time.

Also important to note is that Beijing is now even more unlikely to hasten the phase two talks as it has diverted its full focus onto containing the outbreak and its impact on the domestic economy.

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The GT in its report writes – During a recent interview, an anchor for the Fox Business Network asked White House economic adviser Larry Kudlow if the coronavirus outbreak will give Washington an advantage in the phase two negotiations. While Kudlow said that the outbreak is “completely separate from trade, jobs and all the rest,” but it looks like some in the US are anticipating such a scenario.

Last week, US Commerce Secretary Wilbur Ross made an unexpected statement, suggesting that the coronavirus outbreak in China could “help to accelerate” the return of jobs to the US and predicting that businesses could shift their supply chain out of China due to the virus.

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US officials have long been very anxious to launch negotiations for a phase two trade agreement, as US President Donald Trump faces a heated general election and continues to be engulfed in constant domestic political battles. Even before the phase one deal was inked, Washington said phase two talks would start immediately and have even indicated that tariffs could be reserved for a phase two deal.

Chinese officials have been reluctant to rush into talks for a phase two deal and have instead stressed the implementation of the phase one agreement. With their full attention now on stopping the virus outbreak, they are unlikely to commit to trade negotiations anytime soon, let alone giving ground on core issues.

However, the coronavirus outbreak, despite its deadly nature and negative impact, poses a rare opportunity for China and the US to cooperate to ease their tensions, which is also the goal of the trade talks. For instance, China has a huge demand for healthcare products and services in the fight against the epidemic, which the US could supply. China’s increasing import of US products, including medical instruments, is already part of the phase one deal.

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Instead of calculating how to gain more leverage in the elusive phase two negotiations, the US should work with China to fight the virus that poses risks for not just the Chinese economy but also the global economy. That is conducive to carrying out the phase one deal and paving the way for phase two talks, which US officials so crave.

Via: The Global Times