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China, US edge closer to trade deal
February 22, 2019, 10:33 am

Will a possible trade agreement with China boost global markets?

With less than a week to go before the deadline for China and the US to avert an escalation in their ongoing trade disputes, negotiators from both sides have indicated that they have made significant progress.

Trade delegations are today meeting for the second day of talks in Washington to formalize an outline of a deal which may be made public next week.

In previous talks – the last round was held in Beijing on February 14 – the Chinese delegation indicated that Beijing was willing to increase purchases of agricultural products to ease the trade deficit between the two countries.

Media reports surfaced earlier this week that Beijing would buy $30 billion worth of agricultural products such as soybeans and corn.

The US agricultural sector could suffer huge losses if a trade deal is not worked out because most of its exports end up in Chinese markets.

Friday’s talks are expected to focus on cyber theft and intellectual property, both important issues which US President Donald Trump has accused China of abusing.

The talks may go into extended hours because this is the last time the two trade delegations are expected to meet before the March 1 deadline.

Failure to reach a deal by the deadline is expected to have adverse economic effects on both countries as well as create a cascade effect for the global economy. While several sectors of the US economy have lost ground – the agricultural sector has lost nearly $2 billion in the seven months since the trade war began – China has experienced lower-than-expected GDP growth in 2018.

On March 1, absent a trade deal, the US will raise tariffs on $200 billion worth of Chinese products from 10 to 25 per cent. China would be expected to respond in kind.

Both Presidents Xi Jinping and Trump, who agreed to the three-month talks during the G20 Summit in Buenos Aires in September, have sounded optimistic about the trade deals ending the seven-month trade dispute.

Earlier in February, Xi said that cooperating on trade issues is ideal for the benefit of both countries.

The BRICS Post with inputs from Agencies