Can the Japan-US trade agreement become the blueprint for the “small agreement” between China and the United States?

China-US trade negotiations are about to enter the 13th round. The outside world has long abandoned the illusion of a comprehensive truce in China-US trade. Looking back, China and the United States will temporarily suspend the escalation of the tariff war and reach a “small agreement” so that both sides can ease.

However, the US position is still as vague as ever. White House economic adviser Larry Kudlow said on Monday that the US is “open-minded” to “short-term” or “long-term” agreements; however, on the same day, Trump said “I prefer a big agreement” and was When asked about the possibility of negotiations, he said, “I think, maybe. Who knows? But I think it is unlikely.”

Because the core of the Japan-US trade agreement is simply “relaxing US agricultural imports” in exchange for “the United States does not increase automobile tariffs”, and the logic behind the China-US small agreement is very similar, so the Japan-US agreement is likely to be the blueprint for the China-US agreement.

Japan-US agreement “emergency chapter”

In fact, this Japan-US trade agreement seems to be an agreement to achieve results in an “immediate chapter.” First of all, the Japanese side’s relaxation of the US is mainly focused on agricultural products and food. For example, cheese, beef, pork and other US goods will receive gradual tariff reductions, and these treatments are in line with the Trans-Pacific Partnership Agreement before the US exit. TPP) is the same. Therefore, it is widely believed that the focus of this agreement is to restore the competitiveness of American farmers after the implementation of the TPP in the Japanese market.

However, above these details, American farmers have not actually benefited from the original TPP. For example, butter, rice, barley, etc. have not received the same treatment as the original TPP. It is believed that the opposition from the Japanese agricultural community and the complexity of various quota systems have not been dealt with.

In the US’s relaxation of the Japanese side, it is all small favors, such as the provision of tariff relief for Japanese agricultural products worth 40 million US dollars, as well as bicycles, musical instruments and some mechanical tools (the latter may help some of the towns and villages of the three-dimensional system of Ampere Regional support). In terms of the tariffs on cars that Japan is most concerned about, the US maintains the original 2.5% (in contrast, Japan does not impose tariffs on US cars).

The only seemingly complete agreement content is only on a project of e-commerce. Japan and the United States agreed to ban tariffs on virtual electronic products, reach arrangements for barrier-free cross-border data circulation, and prohibit data localization requirements. As such, it is very similar to the content of the USMCA, and is considered by the outside world to be the only advancement on the TPP.

Will the small agreement between China and the United States embark on this road of Japan-US agreement?

The incomparability between China and the United States and Japan and the United States

On the top of trade, China and the United States are very similar to Japan and the United States: both sides have huge surpluses with the United States; both sides have been criticized by the United States as not opening up the market, and its mode of non-opening is often indirect – for example, the United States has been Criticizing Japan’s lack of auto tariffs, it is difficult to break into the Japanese market by regulating environmental protection and safety.

However, under Trump’s “America First” banner, China-US relations with Japan and the United States are essentially different. The former is basically seen as a confrontation in which the ideological level falls on the various practical categories, while the latter is only a partial conflict between allies.

Far away, the US on Monday added a low-profile 28 Chinese companies or institutions, including Hikvision, to its “entity list”, prohibiting US companies from providing them with technology products. The reason for the US side is that these companies involve high-tech surveillance, arbitrary detention, human rights violations, etc. of Muslim minorities, but American officials also use the Financial Times to distribute Huawei’s 5G technology rivals, such as Nokia. By providing loans to support their competition, we can know the intentions of the US.

When the list of new entities was announced, the US emphasized that this has nothing to do with China-US trade negotiations. This is actually true, because there are many possible conflicts between China and the United States outside of trade. Even if trade disputes can be alleviated, other confrontations will come one after another.

Although under these circumstances, China is still willing to release goodwill and buy agricultural products from the United States. According to the US Commerce Bureau, China has purchased $1.5 billion worth of agricultural products from the United States in August, the most since January 2018. In the last week of September alone, China has purchased more than 1.5 million tons of US soybeans – but the United States insists on continuing to confront the policy outside the scope of trade or for reasons other than trade reasons. The conclusion of the agreement constitutes a threat.

After all, under this China-US relationship, it is possible to negotiate a small agreement like the Japan-US agreement, and both sides continue to try to solve some problems at the negotiating table, which is already the most ideal way out. A small agreement reached in an urgent chapter, although there is no trade contradiction, but at least will bring a rare positive message, let the spirit of the tight market breathe a sigh of relief.