Last week, the United States and China announced their intentions to negotiate a U.S.-China Bilateral Investment Treaty (BIT) that would cover all stages of investment and sectors. This marks an important step in opening China’s economy to U.S. investment by eliminating market barriers, and leveling the playing field for American workers and businesses. The commitment was announced at the close of the fifth U.S.-China Strategic and Economic Dialogue, an annual meeting bringing together high-level officials from both countries to bolster cooperation and mutual understanding on issues across the economic relationship.
Significantly, this represents the first time that China has agreed to negotiate a BIT that includes all stages of investment and sectors. China’s commitment to negotiate on the premise of openness and transparency demonstrates a substantial opportunity to promote trade and investment, and will better enable American businesses to invest and compete in China.
“A high-standard U.S.-China Bilateral Investment Treaty is a priority for the United States and would work to level the playing field for American workers and businesses by opening markets for fair competition,” Treasury Secretary Jacob J. Lew said in a statement last week. U.S. BIT negotiations are led by the Department of State and the U.S. Trade Representative, with strong participation from Treasury and other agencies.
A BIT between the world’s two largest economies and the reforms negotiated during this week’s dialogue will not only be good for the United States and China, but also for the global economy. To learn more about U.S. efforts to promote a balanced relationship and the U.S.-China Strategic and Economic Dialogue, watch Fareed Zakaria’s interview with Secretary Lew on CNN, which aired yesterday.
Many in the business community lauded the announcement to negotiate a BIT that includes all stages of investment and sectors, which is expected to level the playing field and provide new opportunities for American businesses, including:
Financial Services Forum: President and CEO Rob Nichols
"The Bilateral Investment Treaty announced today is a significant and welcome step forward for the economic relationship between the United States and China. If the two countries are able to reach an agreement for the United States to gain market-access to China's economy - especially in the financial services sector - it would be a win-win for both countries, businesses and workers, as well as increase prospects for job creation and economic growth. We applaud the leadership of Treasury Secretary Jack Lew and Chinese Vice Premier Wang Yang in their dedication at the S&ED to reach this outcome. We stand ready to be a substantive resource as this important treaty moves forward between our two countries."
Securities Industry and Financial Markets Association: CEO Judd A. Gregg
“SIFMA has long been supportive of a high quality U.S.-China BIT. We applaud both governments for a agreeing to negotiate a treaty that will not only protect investments after they are made, but also create new market access in China for U.S. investors.”
U.S. Chamber of Commerce: Executive vice president and head of International Affairs Myron Brilliant
“Today, China provided important commitments to further bilateral relations with the United States, and we applaud both governments for their hard work. These important steps forward in investment negotiations have the potential to substantially increase two-way investment and thereby contribute to increased jobs, growth, and innovation in the two economies.”
US-China Business Council: President John Frisbie
"USCBC has been advocating over the past two years that the U.S. and Chinese governments negotiate and finalize a meaningful Bilateral Investment Treaty (BIT). USCBC believes that a BIT provides one of the best opportunities to reduce investment barriers in both countries and improve protections for US and Chinese investors in each other's markets. For a BIT to be "meaningful", it has to include pre-establishment and a negative list approach. If China is serious about putting these two components on the table, this could be significant. Investment barriers in China are market access barriers, so a meaningful BIT would expand market access in China for American manufacturers, services providers, and agriculture companies."
American Chamber of Commerce in Shanghai: Chair Robert Theleen
“We also welcome China’s commitment to a high standard BIT and a revised offer to join the WTO Government Procurement Agreement (GPA) by the end of 2013. However, concluding the BIT and GPA negotiations should be a high priority. A successful BIT and GPA will create a more open, fair and transparent investment environment in China and promote U.S. exports.”
Emergency Committee for American Trade: President Calman Cohen
“This is welcome news. A substantive relaunch of these negotiations is long overdue. Achieving a strong framework for investment that guarantees due process, transparency, and enforceability, while also respecting legitimate national security interests, will further strengthen the rule of law in our bilateral economic relations. And that will contribute to a more secure bilateral relationship overall. ECAT will continue to work with the Administration to promote a high-standard bilateral investment treaty with China.”
Betsy Bourassa is a Media Affairs Specialist at the U.S. Department of the Treasury.