After their trade war, the United States and China are trying to regulate their relations.

After rounds of tit-for-tat tariffs and negotiation of a fragile truce, Washington and Beijing are considering a new mechanism to regulate their trade exchanges.

For some observers, this could distort fair competition. Others see it as a way to pave the way for a more peaceful coexistence between the two top world economic powers.

Here is some explanation on the ongoing work, ahead of a hypothetical meeting between Presidents Donald Trump and Xi Jinping.

– What is it about? –

Following a meeting on March 15 and 16 between high-level American and Chinese economic officials in Paris, White House representative for Trade (USTR) Jamieson Greer mentioned the creation of a “Trade Committee” between the US and China.

According to him, this would be a hybrid mechanism to formalize and determine “what types of products” the United States should export to China and vice versa.

Wendy Cutler, Vice President of the Asia Society Policy Institute, believes this committee could assess the possibility of increasing trade in non-sensitive products or discuss a mutual reduction in tariffs in non-strategic sectors.

So far, she points out in an analysis note, officials seem close to unlocking purchase commitments from China (agricultural products, energy, and aircraft).

– Is this new? –

Chad Bown, from the Peterson Institute for International Economics, sees it as a form of “regulated trade.”

He cites the example of Japan voluntarily slowing its car exports to the United States in the 1980s.

More recently, during Donald Trump’s first term, Washington and Beijing signed an agreement in which China pledged to increase imports of American products by $200 billion over two years. This commitment was not fulfilled.

– Why is this causing concerns? –

“Instead of removing regulations, reducing tariffs, and allowing companies to more easily decide what to sell and at what price, the system would become more bureaucratic,” warns Joerg Wuttke, associated with the consulting firm DGA-Albright Stonebridge Group.

“This is not a good sign,” he adds, questioning, “Where are the laws of the market?”

According to him, this approach could reduce competitiveness and annoy other countries.

An anonymous American business leader wonders: if the government controls trade, how will it choose priority companies and favored sectors?

– Will the relationship be better? –

According to Chad Bown, the new mechanism could prove more fruitful than previous attempts to smooth out their trade disputes.

“It is clear that the old system was not working. Could we try something else?” he suggests, emphasizing that a “more enduring relationship” is better than “conflicts that constantly reignite.”

But for it to work, the agreement must be acceptable and realistic for each of the signatories.

“Both parties would have to commit sincerely,” he warns. “And even then, it will be really, really difficult.”

Published on March 22 at 2:37 pm, AFP.