US and China prepare to talk trade again
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Roshan Amiri
- . November 5, 2021
- . Update: August 17, 2020 6:23 pm
Afghanistan–“The Islamic Emirate orders all citizens, shopkeepers, merchants, businessmen, and the general public to conduct all transactions in Afghans and to refrain from using foreign currency strictly,” said the Taliban in a statement posted online by the group’s spokesperson, Zabihullah Mujahid. Anyone who violates this order will face legal consequences, the report continues. An Afghani, the local currency, is now worth $ 0.0075.
According to Reuters, the Taliban’s decision will undoubtedly cause further disruption to an economy already pushed to the brink of collapse by the abrupt withdrawal of international support. Furthermore, it is essential to remember that the use of the US dollar is widespread in the markets of Afghanistan. Moreover, the currency of neighboring countries is also used for trade in the border areas with Pakistan, Iran, and Tajikistan. The decision to ban the use of foreign currencies came on the same day that at least 25 people were killed and more than 50 were injured in an assault on the capital’s most significant military hospital, Kabul.
At the same time, for months now, the Taliban government has been lobbying for access to the billions of dollars of Central Bank reserves, blocked following the coup. Similarly, everything that was owned abroad by the Afghan state cannot be touched by the Taliban until the executive is recognized as legitimate. Meanwhile, the country is severely hit by drought. It faces a liquidity crisis and the continuing shortage of necessities that leads part of the population to have nothing to eat.
In this context, G20 leaders pledged to provide humanitarian assistance directly to Afghan citizens, following the special summit on October 12. The European Commission has announced the disbursement of one billion euros in aid, specifying that this will not go through the Taliban government. Some of the European Union funds have been allocated to guarantee support also to neighboring states.
“We must do everything possible to avoid a serious humanitarian and socio-economic collapse in Afghanistan. We have to do it quickly,” said Commission President Ursula von der Leyen. The protection of human rights, specifically those of women and minorities, remains a critical point for European countries, which will not recognize the government if it does not commit itself to these issues.
Instead, in the first high-level visit between the two sides, on October 25, China assured that it would respect Afghanistan’s sovereignty, independence, and territorial integrity. Faced with the country’s difficulties, Beijing has urged the United States and the West to lift the sanctions imposed and called on all parties to engage with the Taliban in Afghanistan rationally and pragmatically. After morthey left off.
The two countries were met to kick off a series of meetings from today that would review the implementation of the Phase One deal from January this year. But this virtual meet has been postponed without a new date. While sources from the Chinese side have said that it was because senior communist party leaders were busy with a conference inside the country, there is no denying that there is a lot of tension to iron out between the giants.
Since January, tensions have escalated between China and the US over a variety of issues including the new security law in Hong Kong, the origin of the coronavirus pandemic, the prospective banning of Chinese apps and firms in the US. This has led to an intense war of words and even the tit-for-tat closure of consulates in the two countries. Amidst this, trade experts from both sides need to sit together to re-evaluate where they stand vis-a-vis the old deal.
For example, China had committed to buy at least $200 billion more in goods and services from the US this year compared to previous yet. This now could be seen as an unrealistic target, especially since the pandemic has hit the economies of both the countries and stifled global trade. In fact, sources say that the recent round of talks has been postponed so that China, which has recovered from the pandemic, can make up for the lost time by increasing purchases. This would make for good optics for the review and also for future negotiations. At the same time, China has also realised that no deal can save its companies from US pressure, and might be reconsidering its commitment to the deal.
The US has long accused China of unfair trading practices and theft of intellectual property. China meanwhile sees the US as getting defensive over growing Chinese influence. But despite this, the trade deal is the lone source of stability in an increasingly hostile relationship between the two countries.
