US-China trade review delayed as Beijing lifts farm, oil spending

Signs of Xi Jinping relenting on trade could help US President Donald Trump silence domestic critics. (AFP)
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Updated 16 August 2020

US-China trade review delayed as Beijing lifts farm, oil spending

  • The trade agreement has emerged as a lone source of stability amid strain in the US-China relationship over coronavirus

WASHINGTON: The US and China have delayed a review of their Phase 1 trade deal initially slated for Saturday, sources familiar with the plans told Reuters, citing scheduling conflicts and the need to allow time for more Chinese purchases of US exports.

No new date for the initial six-month compliance review between US Trade Representative Robert Lighthizer, US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He has been agreed, the sources said.

The officials were expected to hold a video conference on Saturday, the six-month anniversary of the trade deal’s Feb. 15 entry into force as the coronavirus pandemic began spreading globally.

One source familiar with the talks said the delay was related to a conference of senior Communist Party leaders at the seaside town of Beidaihe on China’s northeast coast. The postponement did not reflect any substantive problem with the trade deal, the source said, adding: “The new date has not been finalized yet.”

US President Donald Trump on Friday repeated his view that the trade deal was “doing very well,” but did not comment on the delayed meeting. The White House referred queries on the talks to Lighthizer’s office, which did not respond to a Reuters query about plans for the review.

Another source familiar with the plans said that US officials wanted more time to allow China to increase purchases of US goods agreed in the deal, to improve the political optics of the review.

China’s imports of US farm and manufactured goods, energy and services are behind the pace needed to meet a first-year target increase of $77 billion over 2017 purchases.

But as China’s economy has recovered from a coronavirus lockdown earlier this year, purchases have increased. On Friday, the US Department of Agriculture reported the sale of 126,000 tons of soybeans to China, marking the eighth consecutive weekday with large sales to Chinese buyers.

US oil traders, shipbrokers and Chinese importers also said Chinese state-owned oil firms have tentatively booked tankers to carry at least 20 million barrels of US crude for August and September, indicating a ramp-up in energy purchases.

Trump administration officials have signaled that they are satisfied with the pace of purchases in recent weeks and have no plans to abandon the trade deal, which also includes some increased access for US financial services firms in China, strengthened intellectual property protections and removal of some agricultural trade barriers..

Delaying the meeting, even briefly, could allow China to complete more purchases, which would help Lighthizer persuade Trump to stick to the deal.

Signs of Chinese compliance could also help blunt criticism from Democratic presidential candidate Joe Biden, who last week said the agreement that Trump has called a historic win is “failing.”

The trade agreement has emerged as a lone source of stability amid strain in the US-China relationship over coronavirus, human rights crackdowns and sanctions.

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Businesses win COVID-19 insurance payouts after UK top court ruling

Updated 37 min 34 sec ago

Businesses win COVID-19 insurance payouts after UK top court ruling

LONDON: Small businesses, from restaurants to nightclubs and wedding planners to beauty parlors, have won the right to insurance payouts after Britain’s highest court ruled their policies should cover losses caused by coronavirus lockdowns.
Six of the world’s largest commercial insurers — Hiscox, RSA, QBE, Argenta, Arch and MS Amlin — argued many business interruption policies did not cover widespread disruption after Britain’s first national lockdown last March.
But the UK Supreme Court dismissed appeals by the insurers after scrutinizing non-damage insurance policy clauses — which cover disease, denial of access to business premises and hybrid clauses — in a victory for the regulator and policyholders.
The test case, which has been watched closely overseas, has pitched the industry regulator against major insurance companies since last May and has been expected to affect 370,000 policyholders, 60 insurers and billions of pounds in claims.
Alistair Handyside, executive chair of the Professional Association of Self-Caterers UK, whose members had a policy with RSA, said he was delighted by a judgment that would mean survival for many amid a third lockdown.
But policyholders are now bracing for the next stage in their fight for payouts.
“It would appear we have won another battle 10 months too late,” said Murray Pulman, who runs The Posh Partridge cafe in Dorchester, southwest England.
“The war is not over, however,” he said.
“Getting payment, compensation and costs ... is another whole new fight which begins today.”
Hiscox, MS Amlin, Argenta and RSA said they would be paying claims as soon as possible.
Other insurers were not immediately available for comment. Hiscox estimated its 2020 COVID-19 estimate for business interruption had risen by $48 million net of reinsurance, bringing total claims to £136 million ($185.52 million).
Britain’s Financial Conduct Authority (FCA) said it would work with the industry to ensure they settled claims quickly and made interim payments if possible.
The case turned on business interruption policies with clauses offering cover when insured premises cannot be accessed because of public authority restrictions, in the event of a notifiable disease within a specified radius and hybrid wordings.
Insurers said they were paying valid claims but that they could not provide limitless cover for losses amassed when almost the entire economy was shut down and healthy people consigned to their homes in the most stringent restrictions on public life since World War Two.
London’s High Court ruled last September that some insurers had been wrong to deny cover, prompting six insurers, the FCA and the Hiscox Action Group of policyholders to challenge elements of the ruling they had lost in an appeal that leapfrogged the Court of Appeal because of its critical nature.
Christopher Croft, CEO of insurance brokers’ association LIIBA, said the industry’s reputation had been damaged.
“We need to think hard about how we redress that,” he said.