[ferro-alloys.com]The United States Trade Representative Robert Lighthizer recently indicated that there has been some progress in the US-China trade negotiations, "but not near enough that anybody is going to be signing on to this without more work," Dan DiMicco, one of 21 members on the USTR's Advisory Committee for Trade Policy and Negotiations told S&P Global Platts Wednesday. 

"There needs to be more forceful language and the proper language in any deal," DiMicco said.

"The soybeans, the natural gas, the corn -- all this stuff -- that's the easy stuff," he added. "That's not the hard stuff; that's easy for China to offer and for the United States to say, 'yeah, we'll take advantage of that'."

DiMicco, chairman emeritus of US-based steelmaker Nucor, defines the hard stuff as "the fundamental changes that need to be made in the structure under which China and the Chinese Communist Party run its economy."

He's of the opinion that China must change "its predatory practices, its mercantilist practices, state ownership, the massive subsidies of all kinds."

He stressed that it's not his intention to imply that the farming and energy issues are not important, "but in all honesty they would be the frills on any deal that gets done."

Pushing China for fundamental structural change means changing the way China does business. "They need to move away from state ownership," DiMicco insisted. "They need to move away from keeping foreign companies from owning 100% of a business they bring to China and forcing a partner to give away technology and only have a minority position. All these issues have to be dealt with and this is what they are negotiating."

DiMicco is careful to couch his comments as his own opinions. "I think these fundamental issues have been the subject of most of the talks that have been going on. Talks have not revolved around soybeans, corn and natural gas," he said.

Another key from the US perspective is accountability that can be easily monitored. The US needs to have the ease of knowing whether China is abiding by the terms of any agreement, or not, according to DiMicco. If not, "there has to be immediate and strong retaliation on the part of the United States, i.e. tariffs need to go back in place at 25% or more," he said.

CHANCES FOR A FLORIDA MEETING?

There is the possibility of a meeting in Mar-a-Lago, President Trump's golf club in Florida, but it's not a given, DiMicco told Platts.

"The Chinese Communist Party leader is going to be in Europe [later this month] and supposedly on his way back from Europe there is an opportunity for him to stopover in Florida and meet with the President," he explained.

But DiMicco emphasized: "This is not a set meeting. It has not been defined or set yet at all. And again, even if there is a meeting -- which has not been announced -- just the chance of one has been [acknowledged]. But even if there is a meeting, my point is just because they meet doesn't mean there is an agreement coming."

He also described the USTR advisory committee -- members come from "all different walks of life: academia, labor, business, industry." He explained it's "not a rulemaking committee -- we give advice. We review all of the [trade] agreements. We give advice in a joint format. There are groups that will present dissenting opinions, and so on," he said.

On the subject of US-China trade talks, DiMicco's opinion is clear: "No agreement is better than a bad agreement. And by no agreement I mean tariffs remain in place and get increased."

(S&P Global Platts)

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