Question

United States-Popular Republic of China Trade Talks:

a) What contitues each party's baigaining power? (where does it's power comes from?) Elaborate in brief

b) What is the current state of bilateral negotiation, given the power steucturw between the two parties? (How was the difference in or balance of power shaped the process of the given negotiation?)

Answer 1

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Abstract

United States-Popular Republic of China Trade Talks:

There are various factors that are considered in between trade talks between US and China -

A) To reduce the deficit of bilateral trade and increase the number of jobs

B) To limit access of Chinese companies to American technologies and prevent digital technology copyrights.

This trade talk is an ongoing economic conflict between China and the United States.

1) China's Bargaining Power

• PRC leadership argued for a quick resolution to the trade war in order to save China's economy, as per this openion the country should push back against the United States and avoid an agreement at all costs.
• Trade war revealed underlying weaknesses in the Chinese political system and criticized President Xi Jinping for his over rated politics that have liberal stance over US Trade.
• state-backed Chinese Academy of Social Sciences, expressed pessimism about the outcome of upcoming trade talks and its final outcome.

2) United States Bargaining Power

Agricultural Related Bargaining

• Pork producers in US have seen the value of their pigs fall after a previous Chinese tariff, pig producers experienced effect of the new tariff that is very strict and barriers to trade.
• Due to High Tariff rates imposed on the Soyabean product, U.S. industries could permanently lose global market share as a result.

Business Related Bargaining

Top authorities from US Business claimed that due to increased rate of Tariff in Chinese steel, aluminum, and certain chemicals contributed to rising fertilizer and agricultural equipment costs in the United States.

Consequence of this is that US industries in China adjusting supply chains or seeking to source components and assembly outside of China as a result of tariffs and 28% were delaying or cancelling investment decisions in China

All major trade associated and retail companies requested to Federal government to reduce the tariff rates which would have "a significant, negative, and long-term impact on American businesses, farmers, families, and the US economy.

3) Current state of bilateral negotiation between US and China

US is working consistently to resolve the issues with regards to China's technology transfer policies and market access constraints.

In recent meeting of Bilateral negotiaon as on 01st Jun 2018 - American, European and Japanese officials have discussed joint strategy and taken actions against unfair competition by China.

Chilean vice minister proposed that it's very important for Chile that a trade deal between the U.S. and China is signed soon and it will foster the economic growth between both coutries by reducing adverse policies of tariff on trade.

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