The trade disputes between the two largest economies in the world continue to be in the spotlight at the New Economy Forum taking place in Beijing from November 21 to 22.
The former U.S. Trade Representative and Ambassador Charlene Barshefsky, who currently serves as WilmerHale's Senior International Partner, argues that tariffs are not "a pro-growth solution to any problems." She considers the current situation a "1+1=-2" and called for productive negotiations between China and the U.S. so that it can be created a "1+1=3" outcome.
Barshefsky advises the U.S. to get back to business and continue to strengthen its own value, while China should keep working on reforms and opening up.
China-U.S. trade talks
"Tariffs are not a pro-growth solution to any problems. And this is demonstrable. Get back to pro-growth trade policies, which means productive negotiations with partners with whom you have a disagreement, and move on from there to try and create a '1+1=3' scenario rather than the current situation, which is '1+1=-2'", according to Barshefsky.
"The situation remains very tense and uncertain, quite volatile, (and) is destined to remain difficult and not just in 2020 either. You have a fundamental clash between different economic models, quite apart from different political systems, different cultures and so on. The economic models are radically different."
She held that the U.S. isn't taking care of itself and needs to remember that its basic strength comes from its values, which are attractive to many people around the world. Secondly, the U.S. should develop infrastructure and build its own economy. Third of all, the U.S. should focus on education and other similar reforms.
Barshefsky added that China must recognize it needs to again shift its model and converge toward a more market-oriented model. "I applaud China for making further reforms with respect to its financial sector, further opening, this is very important."
WTO in desperate need of updating
The Ambassador also shared her insights about the WTO reform with CGTN.
"WTO is weak now. The agreements that exist in the WTO are old. They're (in) desperate need of updating, let alone the issues not covered adequately by the WTO, whether investment or new forms of technology, the digital economy so on and so forth," said her.
"At the WTO level, the impetus is quite limited. But if you look beneath that, at the various regional and sub-regional arrangements that people are negotiating, China is a good example with the Regional Comprehensive Economic Partnership (RCEP). The U.S. at one point had been in the TPP and should certainly rejoin," Barshefsky noted.
"These arrangements are in part designed to facilitate a new set of rules, which hopefully ultimately will help a filter up to the WTO level," added the former U.S. Trade Representative.