Since the trade tension started between China and the United States, the world’s attention has been focused on the prospects of the row between Beijing and Washington. Fortunately, the leaders of the two powers have never lost their keen interests in holding negotiation which is seen as the fundamental feature of classical diplomacy. On May 3-4, Chinese vice-premier Liu He, a Harvard-trained high-ranking official, met his U.S. counterpart Steven Mnuchin who is Treasury Secretary and also as President Trump’s special envoy. During the two-day talks in Beijing, China and the United States reached a consensus on some issues followed by a constructive agreement.
In foreign affairs, “consensus” refers to the accepted framework in which the adjustment of disputes through negotiation is only the legitimate way. China media stated that both parties held frank, efficient and constructive discussions on Sino-U.S. economic and trade issues, sharing that healthy and stable economic and trade relations are very important to the two countries which should be committed to solving relevant economic and trade issues through dialogue and consultation. To that end, the two sides agreed to establish a communication mechanism and maintain close communications.
In effect, this is what the world has expected the outcome. Although both parties recognize that there are still major differences on some issues, they agreed to continue to intensify their mutual work on expanding U.S. exports to China, bilateral service trade, two-way investment, the protection of IP rights, and the settlement of tariff and nontariff measures. In some areas, some consensus has been reached. In light of classical diplomacy, continuing talks with sincerity and mutual compromise serve to produce the win-win result.
Accordingly, it makes sense to see the Sino-U.S. trade talks as a reflection of classical diplomacy that highlights negotiation, persuasion and compromise. From the very beginning, Chinese FM has said that the outcome is in line with the general expectation, for it is unrealistic to expect all trade-related problems between the world’s two largest economies to be solved in one round of talks. Due to this, the positive end of the two-day talks concluded on May 4 is the constructive protocol between Beijing and Washington. No doubt, this is all the more reason why the softening tone at the two-day meeting is welcome: it creates room for future discussion and negotiation between the two sides so they can find more common ground and work out a plan based on mutual respect and mutual benefit.
To the anti-globalist groups, they are more interested in who was made more concession, and therefore the outcome of the win-win formula is a little bit fussy or unbelievable. After all, the United States is in general stronger than China, particularly in terms of core technologies. Yet, the reality over the past months showed China would not compromise on its core interests no matter how desperately the US tries. What the US should and can do is to respect China’s economic sovereignty and engage in consultations on an equal footing to seek a mutually acceptable solution. In return, owing to the great benefits of four decades of reform and opening-up, China agrees to further open up its economy so the international community including the U.S. can benefit from its large and fast-developing market. But China will do so on its own conditions, not to suit the agenda of other countries.
In view of the U.S. domestic opinion, there is still optimistic mood about long-term cooperation on innovation between China and the United States, even considering some temporary difficulties between the two in trade. For example, at the first China-US Quality Summit on April 30, Elmer Corbin remarked that despite the disputes at the moment, the U.S. has a long standing relationship with China and the current politics would not harm that, because it’s really a political situation. He further said the US-China trade frictions is not going to be a long-term disagreement in our relationship, and intellectual property (IP) rights would not impair the sharing of knowledge with China. In a long-run, the dialogue between the two sides is an opportunity to “create new innovation if we have the right experts from different geographies and from different points of views working together.”Also, the new head of the National Economic Council Larry Kudlow has long been an advocate for free market and trade, and has frequently criticized Trump’s tariff approach. Upon taking the position, he has referred to tariffs as a negotiating tactic aimed at achieving fairer trade relationships.
True, China is now a developing country, but meanwhile it is a rising power as well. Due to this, what supports China at the negotiating table is neither the ideology nor hard power, but the reality and the type of fairness in terms of legitimacy. China does not deliberately seek trade surplus with the US, as a firm believer of market economy and free trade, which incidentally are lectured by the US. But the Chinese use them too well and the US does not feel they are taking fair advantage of it. In addition, Chinese consumption power is on the rise, and is particularly represented by an expanding middle class and the rising buying power in rural areas. So China has a very strong domestic market base and also has the capability to upgrade on its own innovation program, particularly Made in China 2025.
In summary, classical diplomacy is a component process based on negotiation, persuasion and compromise. On the one hand, a sound and stable China-US trade relationship is crucial for both and the world as whole. To that end, both sides are committed to resolving relevant economic and trade issues through dialogue rather than any type of the tit-for-tat punitive tariffs. Yet, on the other hand, China agrees to further negotiate but never be forced to reduce the United States-China trade deficit by $100 billion in the twelve (12) months beginning June 1, 2018, and an additional $100 billion in the twelve (12) months beginning June 1, 2019, such that the U.S. trade deficit with China will have decreased compared to 2018 by at least $200 billion by the end of 2020.After all, diplomacy falls into negotiations rather than an ultimatum.