Aurelia Butler

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen will meet with Chinese Vice Premier He Lifeng in San Francisco this week to try to deepen a fledgling economic dialogue between the world’s two largest economies ahead of a U.S.-hosted summit of Pacific Rim leaders.The Treasury said the Nov. 9-10 meetings will also convene the new economic and financial forums launched in October by the Treasury and China’s finance ministry and central bank.Yellen first met with He, China’s new economic czar, in July, when she visited Beijing to try to stabilize a deteriorating U.S.-China relationship amid growing U.S. restrictions on sensitive technologies.The San Francisco meetings will take place just before the Biden administration hosts ministers and leaders of Asia Pacific Economic Cooperation countries from Nov. 11-17 — a gathering during which U.S. President Joe Biden is aiming to meet with Chinese President Xi Jinping.A senior U.S. Treasury official downplayed the idea that there would be specific “deliverables” from the Yellen-He meetings, saying it was not a “policy trade” situation “where we trade one thing for another.”But the official said a key aim for Yellen was gaining a better understanding of how the new U.S.-China economic communication line will work, and how to make sure that “it is not vulnerable to shocks,” adding that there will be more frequent interactions.Yellen also is keen to discuss what steps Chinese officials are contemplating to support their flagging economic growth, and what circumstances might change their policy path.’NON-MARKET’ TOOLSAmid growing concerns that China will try to dump more manufactured goods on U.S. and global markets, Yellen is expected to warn He against using massive industrial subsidies to state firms and shutting U.S. companies out of domestic markets, the official said.”This week, I will speak to my counterpart about our serious concerns with Beijing’s unfair economic practices, including its large-scale use of non-market tools, its barriers to market access, and its coercive actions against U.S. firms in China,” Yellen said in an opinion piece published by the Washington Post.She reiterated that the U.S. was seeking “healthy competition” with China and was not trying to “trigger a “disorderly wholesale private-sector pullback from China with actions to diversify supply chains and protect U.S. national security.”The communications so far have helped U.S. officials to explain policies such as export controls and restrictions on outbound U.S. investment to China to counterparts in Beijing.NOT S&EDBut Yellen said her engagement with He was not meant to reconstitute the broad, Obama-era U.S.-China Strategic and Economic Dialogue, which was widely criticized for its ineffectiveness.Instead, Yellen said she was “focusing on specific, high-priority economic topics on which we can make tangible progress.”Among these are cooperating on global challenges such as tackling climate change, speeding debt relief to poor countries, and reducing illicit financial flows that support terrorism and the illegal drug trade. More

BRASILIA (Reuters) – Brazil’s Finance Minister, Fernando Haddad, said on Monday that revenue shortfalls resulting from past tax changes have an impact on new fiscal rules approved by Congress during President Luiz Inacio Lula da Silva’s administration.Speaking at an event hosted by BTG Pactual bank, Haddad reinforced that he had informed the president that the ministry had been observing considerable frustration in public revenues since July. More

The Expropriation Bill contradicts the requirements of the African Growth and Opportunity Act (AGOA). AGOA provides zero-tariff market access to nations that are progressing towards a market-based economy and safeguarding private property rights. The proposed legislation, however, introduces EWC for reasons such as the appropriation of hijacked buildings and invaded land.At the AGOA Forum in Johannesburg, the risk of South Africa’s exit from AGOA due to the EWC provisions in the Expropriation Bill was largely overlooked. To be eligible for AGOA, an African nation must protect private property rights. However, the Expropriation Bill approved by the National Assembly, which is set to be enacted before the 2024 election, threatens these rights by endorsing EWC on various grounds.Despite no public warnings from US delegates, some US lawmakers have voiced concerns over the bill’s impact on US-South Africa trade. Congressman Jim Baird questioned the potential implications of the bill, while Congressman John James labeled EWC a “disastrous policy” that threatens South Africa’s constitutionally protected private property rights.The Biden administration, known for its stringent AGOA eligibility criteria, has recently removed several African countries from potential benefits. This move highlights the seriousness with which the US government views adherence to AGOA criteria. While South Africa’s Expropriation Bill is yet to become law, its potential effects on trade relations and private property rights are already causing concern among stakeholders.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

BEIJING (Reuters) -President Xi Jinping said on Monday stable ties between China and Australia served each other’s interests and both should expand their cooperation, sending a clear signal that Beijing was ready to move on from recent tensions. China and Australia should promote the development of their strategic partnership as they build up mutual understanding and trust, Xi told Australian Prime Minister Anthony Albanese, the first Australian leader to visit Beijing since 2016, at the Great Hall of the People in the heart of the Chinese capital. A strong relationship “will be beneficial into the future,” Albanese told Xi in their second face-to-face talks in a year, a meeting that lasted more than an hour.For decades, China and Australia built a relationship on trade, with Beijing becoming Canberra’s biggest commercial partner with purchases of Australian food and natural resources.But ties soured after Australia in 2017 accused China of meddling in its politics. The following year, Australia banned equipment from Chinese tech giant Huawei Technologies Co for its 5G network out of national security fears.An Australian call in 2020 for an international inquiry into the origin of the COVID pandemic, which emerged in the Chinese city of Wuhan in late 2019, infuriated Beijing, which responded with blocks on various Australian imports.As relations deteriorated, China warned its students against studying in Australia, citing racist incidents, threatening a multi-billion-dollar education market.Earlier on Monday, Albanese stopped by Beijing’s iconic Temple of Heaven and posed for a photograph at the circular Echo Wall where Australia’s then prime minister, Gough Whitlam, stood in 1973, a year after the two countries established ties.”In China we often say that when drinking water, we should not forget those who dug the well,” Xi said. “The Chinese people will not forget Prime Minister Whitlam for digging the well for us.”‘VERY POSITIVE’Albanese took steps to stabilise relations after he became prime minister in May last year and met Xi on the sidelines of a G20 summit in Indonesia in November.China soon began lowering trade barriers, allowing imports of coal in January and ending tariffs on barley in August. Last month, Beijing agreed to review dumping tariffs of 218% on Australian wine. “I noted very much unimpeded trade was in the interest of both countries, was good for Chinese consumers as well as Australian exporters,” Albanese told reporters after the meeting. “He certainly agreed that Australian wine is good.”China’s January-September imports from Australia increased 8.1% from a year earlier to $116.9 billion, Chinese customs data show. In 2022, imports plunged 12.7% to $142.1 billion.The meeting was “very positive”, Albanese said, adding that he had invited Xi to visit Australia.”Both of us certainly agreed that we shouldn’t be defined by our differences, recognise that they are there, but also recognise the mutual benefit that we have.”Obstacles remain in their relationship.Australian backing of a U.N. ruling rejecting China’s territorial claims in the South China Sea has angered Beijing, which has told Canberra the issue is not its concern.Australia says the South China Sea is an important passageway for its trade with Japan and South Korea. Beijing’s projection of power among Pacific island nations also alarmed Australia, while Canberra’s security alliance with the United States and Britain in the Indo-Pacific – known as AUKUS – stoked Chinese worries about containment.”AUKUS didn’t come up explicitly. We discussed, though, regional stability,” Albanese said, without giving specifics. “I spoke about guardrails and military-to-military cooperation between the United States and China. That’s important.”Albanese also raised the case of Australian writer Yang Hengjun, who has been jailed in Beijing for four years on espionage charges. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.This article is an on-site version of our Trade Secrets newsletter. Sign up here to get the newsletter sent straight to your inbox every MondayWelcome to Trade Secrets. There’s an interesting event coming up this week, as Australian prime minister Anthony Albanese meets China’s Xi Jinping. Diplomatic relations between the two countries are rapidly improving, with China lifting its coercive restrictions on Australian exports. But let’s remember what underpins that. Australia’s bargaining position was hugely strengthened by its exporters finding other markets in response to Beijing’s bullying rather than Canberra having to escalate a trade war. In today’s main pieces I look at the Biden administration’s break with the previous US trade policy consensus on data flows and digital trade, and ask what those issues are doing in trade deals anyway. Charted waters is on the Bank of Japan and the weak yen.Get in touch. Email me at [email protected]’s break with the digital consensusA longstanding constant of US trade policy (and one that survived the Trump presidency) was rocked a couple of weeks ago. The US withdrew from its previous position in negotiations on digital trade at the World Trade Organization, saying that the right to regulate was more important than pushing for the free cross-border movement of data.The Biden administration has always been keener on reining in Big Tech than was either Obama’s or Trump’s. Its new stance is closer to the position the EU has long taken — that privacy is a fundamental right, and the ability to regulate it is not to be bargained away in trade deals. In theory, together with a general move towards tighter rules on the use of personal data, at least at state level, it looks as if the different US and EU regulatory philosophies — laissez faire versus tough privacy protection — are converging somewhat. (This trend has already been identified by the guru in this area, Columbia University’s Anu Bradford.)Now, as noted by Simon Lester, who founded the WorldTradeLaw.net website, in practice the US shift might not make a dramatic difference to how data is actually treated in trade deals, which are often shot through with exceptions.I’d add that no strong and binding rules guaranteeing the free flow of data would ever have made it out of the WTO ecommerce negotiations alive in any case. Along with the EU’s reservations, China wants to preserve its incredibly pervasive system of controls, with companies wanting to take data out of the country facing multiple barriers.But that just raises a bigger question: what are the likes of data flows (and AI, policymakers’ latest obsession) doing in trade agreements in the first place?Trade in data needs trustTo answer this we turn to Susan Aaronson of George Washington University, who’s often to be found pushing out the boundaries of creative thinking on digital trade and the like. Here’s her latest paper on the subject — an earlier piece from Trade Secrets favourite Dan Ciuriak is also worth a read.Aaronson’s take is that the case for including data flow and digital trade in trade agreements is strongly conflicted. There’s a good argument from the practical and institutional point of view. Trade deals are legally binding and have provisions to arbitrate disputes, unlike the softer guidelines that emerge from discussions in places such as the OECD.But data isn’t really like a normal traded service. As Aaronson says, data flow isn’t always accompanied by an actual commercial transaction, and although data can be a commercial asset, it’s also a public good and a national security issue. Countries have a whole variety of different data protection laws that they somehow have to make compatible with their obligations in trade deals, and so far there hasn’t been much progress towards developing international norms of behaviour. For example, governments have shut down parts of the internet in the past (including democracies such as India and Brazil, which have banned particular apps) but no other government has managed to challenge this as an illegal restraint of trade. There’s a lot of public suspicion of the big internet platforms and the way in which personal data is used and transferred. Trade deals, which are typically negotiated in secret and subject to intense lobbying from affected companies, are unlikely to be the best way to address that. If governments are going to maintain public support for making data flows work, they’re going to have to do a lot of work building trust in their own regulations first. The US, for example, badly needs a comprehensive federal data protection regime rather than a state-by-state and sector-by-sector patchwork, but there isn’t much sign it’s going to get one soon.This all seems a pretty plausible argument. Putting digital issues into a trade deal sounds like a good idea, but it has to be a complement to building public confidence in the way personal information is handled, not a substitute for it.Charted watersThe Bank of Japan last week ended its long experiment of keeping monetary policy loose by preventing long-term bond yields rising higher than 1 per cent. This might help arrest the fall in the yen, which has slid pretty much throughout the year, without having to resort to currency intervention.Trade linksThe EU is launching a drive to improve economic growth and competitiveness. It is concerned about the strength of the single market and Europe’s lagging performance in high-technology sectors.The shipping giant Maersk has cut 10,000 jobs as the post-Covid rebound in global container trade has eased off and the freight industry returns to something more like normal.The challenges the EU will have in admitting Ukraine as a member, as very well described in today’s Europe Express newsletter, have been underlined by Polish hauliers threatening to block Ukrainian trucks from entering Poland, saying they are being undercut by low-paid drivers. Following its constraints on selling germanium, gallium and graphite abroad, China is imposing export controls on its hitherto flourishing giant panda export trade. I’m saying nothing.The UK continues to repair the damage Brexit has done with painful slowness, this time boosting its tourist industry by cutting the bureaucracy required for school trips from France to enter the UK. Trade Secrets is edited by Jonathan MoulesRecommended newsletters for youEurope Express — Your essential guide to what matters in Europe today. Sign up hereChris Giles on Central Banks — Your essential guide to money, interest rates, inflation and what central banks are thinking. Sign up here More