Trade expert sees no deal in sight for U.S. and China due to fundamental differences

There’s an important point that is being missed in the trade negotiations between the United States and China and ultimately it’s why an international trade law professor from the University of Kansas believes there will not be a deal between the two world powers at this week’s meeting.

“The Chinese said we will not implement what you, the U.S. have requested in our local law,” said Raj Bhala, the Brennesein Distinguished Professor at the University of Kansas Law School and a Senior Advisor at Dentons. “Please just trust us. We will make the changes by administrative and regulatory actions.”

The U.S. has seen this movie before and they aren’t interested in empty promises. They want Chinese trade changes codified.

“The American Chamber of Commerce in Beijing has said that you can no longer rely on the U.S. business community as the anchor for Sino-American relations,” said Bhala. “The U.S. businesses in China are frustrated after dealing with decades of intellectual property, trade secret theft, dealing with national treatment discrimination. We’ve had it.”

This is ultimately philosophical.

“Here we really have this existential clash between the reforms that the Americans are, I think, rightly demanding and the corner that the Communist Party is in, in terms of making those reforms but possibly losing its grip on power,” said Bhala.

Trade is about trust as much as it is about money.

“This is not about how many soybeans Kansas sells to China over the next couple of years,” said Bhala. “This is not just about that. It’s not just about the movements of the S and P or the Dow Jones over the next few months. This is about reforms in the Chinese economy that the United States needs to make, because, on current course, the way the Chinese economy has been operating systematically, is a threat to the economic and national security of our country.”

This is profoundly non-partisan. Bhala says this is probably the greatest area where Democrats and Republicans alike agree since President Trump was elected.