Trump-Xi meeting: Best likely outcome is agreeing to let talks continue

BEIJING (The Straits Times/ANN) - Analysts not hopeful of an agreement in Osaka, but avoiding all-out trade war is key.

With less than two weeks before Chinese President Xi Jinping meets his US counterpart, Donald Trump, in Japan, China-based experts are cautious about any positive outcomes from the encounter.

While the two leaders strived to make clear in a phone call late on Tuesday night that communication lines remained open between their trade negotiators, analysts said that the best likely outcome from the meeting would be agreement to continue with the trade talks.

"A face-to-face meeting means there is a chance for trade talks to continue taking place, and for both sides to prevent an all-out trade war," said Professor Jia Qingguo, dean of Peking University's School of International Studies. "There isn't much time from now till then, so the chance of them signing any agreement is small," he added.

Still this would be an improvement after talks effectively stalled last month, when Mr Trump raised tariffs on US$200 billion (S$273 billion) of Chinese goods to 25 per cent just as Vice-Premier Liu He, China's top trade negotiator, was headed to Washington for discussions.

While Mr Liu proceeded with the visit and insisted that talks had not broken down, there has been no new development since.

Chinese foreign ministry spokesman Lu Kang said at a regular briefing yesterday that Mr Xi and Mr Trump would discuss whatever they wanted when they meet at the G-20 summit in Japan, adding that an agreement on trade between both sides meets the aspirations of the world.

Global Times editor Hu Xijin claimed in a series of tweets yesterday that China was the one that "broke the one month-long stalemate" on the trade dispute, as it had acceded to the phone call between the two leaders "at the request of the US side".

"Will the deadlock be broken? I feel Beijing has a cautious attitude," he wrote.

Ahead of the meeting, the state-run nationalistic tabloid said in an editorial that China has taken the moral high ground in the ongoing dispute, as evidenced by each side's choice of tactics.

"China never threatens other countries, but seeks common interests through negotiations (while) the US frequently resorts to a maximum pressure approach," it wrote.

But the US consul-general to Hong Kong and Macau, Mr Kurt Tong, told reporters yesterday he hoped that both sides would find a way to get back on-track with negotiations, or even "get back to where we were a couple of months ago in terms of China's willingness to execute a binding, executable, and far-reaching agreement."

"This is not easy stuff; we are asking a lot but it's because there's a lot that needs to happen," he said yesterday. "I hope that China, in its own enlightened self-interest, will realise that what the US is requesting is not unreasonable."

Many, like former US trade negotiator Stephen Olson, remain sceptical about prospects for any breakthrough soon, telling reporters on Monday that any meaningful negotiation to address systemic issues in the Chinese system would take years.

"There is virtually no chance that any type of an agreement will be reached in Osaka, as the countries are simply too far apart and presidents don't negotiate down to that level of nitty-gritty," said Mr Olson, now a research fellow at the Hinrich Foundation in Hong Kong.

"The best outcome we could probably hope for is a formal decision to restart negotiations."

Prof Jia said any hope of a deal would require pragmatism from both sides. "Both sides have to be willing to make concessions if they want to achieve any positive outcome; it cannot only be China giving way," he said.

Additional reporting by Danson Cheong

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