WASHINGTON — The U.S. and China signed a 10-year framework to cooperate on energy and the environment and launched negotiations on a bilateral investment treaty at the close of the Strategic Economic Dialogue here on Wednesday. But no specific agreements were reached on the key issues of currency policy or intellectual property rights.
This story first appeared in the June 19, 2008 issue of WWD. Subscribe Today.
During the two days of meetings, part of a series of high-level economic and trade talks between the world powers, the U.S. and China resolved to begin talks on an investment treaty that would extend legal protections to U.S. companies looking to invest in China. The agreement comes after 17 months of exploratory conversations. U.S. officials said it was unlikely that the discussions would be resolved in less than a year.
Leading up to the latest round of meetings, a group of senators, including presumptive Democratic presidential nominee Barack Obama, sent a letter urging the Bush administration and Treasury Secretary Henry Paulson Jr. to continue pressuring China about reforming its currency policy. Critics have asserted that Chinese currency is undervalued and allows Chinese goods into the U.S. at unfairly low prices.
Since June 2005, the Chinese yuan has appreciated 20 percent against the dollar. In his closing remarks, Paulson said the role of currencies in the global economy was discussed during the meeting.
“I welcome the recent increased pace of appreciation of the [yuan] and urge China to continue its move toward greater exchange rate flexibility,” Paulson said.
Other developments in the weeks leading up to the talks in Annapolis, Md., included the announcement that China had unveiled a new strategy to address intellectual property rights. The initiative aims to improve protection in China and attract more intellectual resources, said China’s vice premier, Wang Qishan.
Protection of intellectual property is a hot-button issue in U.S. business relations with China and was designated a top priority of the talks. The countries agreed during the meeting to intensify cooperation on intellectual property rights protection as soon as possible.