ANNUAL REPORT

67
• Accelerating Bilateral Investment Treaty (BIT) negotiations: *
The United States and China agreed to submit revised negative
list offers in mid-June, after both countries missed a March
2016 deadline for exchanging offers. Both sides agreed to accelerate
negotiations, but did not set a deadline for concluding
BIT negotiations. 233 After both sides exchanged new offers, U.S.
Trade Representative Michael Froman said China’s latest offer
“[showed] a serious effort on their part” but remained “a fair
distance away from being acceptable.” 234
• Enhanced cooperation on climate change and environment: The
United States and China strengthened their cooperation on climate
change and environmental protection, which comprised
nearly half of the listed strategic outcomes; however, most of the
outcomes highlighted existing exchanges and agreements. 235
For instance, the two countries committed to working toward
full implementation of the Paris Agreement.† 236 The listed
outcomes also enumerated multiple collaborative projects under
the Climate Change Working Group, including initiatives
on smart grids, heavy-duty vehicles, and building and industry
energy efficiency. 237
U.S.-China Bilateral Investment Treaty Negotiations
A recent report prepared by Commission staff analyzes the
costs and benefits of the U.S.-China Bilateral Investment Treaty
(BIT) and concludes that while a U.S.-China BIT “could potentially
unlock sizable benefits, there are a number of potential concerns
derived from China’s recent BIT practice that policymakers
should weigh when considering the treaty.” 238 For the United
States, the BIT presents an opportunity to address and ban Chinese
investment practices that are out of line with international
investment and legal standards, including unclear regulatory and
legal enforcement, forced technology transfer, preferential policies
for SOEs, and long-standing market access barriers. 239 For China,
the BIT could secure a more politically stable operating environment
for Chinese companies in the United States and also
serve to facilitate domestic reform of its investment framework
by imposing external obligations. 240 However, given China’s history
of noncompliance with its World Trade Organization (WTO)
obligations, critics of the BIT worry that even a high-standard
U.S.-China BIT may not be meaningfully enforceable because it
conflicts with Beijing’s stated development path. 241
To date, the United States and China have exchanged negative
list offers four times, mostly recently in September 2016. 242 According
to David Dollar, senior fellow at the Brookings Institution
(and formerly the Treasury attaché to China), “China has been
slow to produce a credible offer on the BIT because enterprises
and ministries with vested interests have opposed to opening up
* For background on U.S.-China BIT negotiations, see Lauren Gloudeman and Nargiza Salidjanova,
“Policy Considerations for Negotiating a U.S.-China Bilateral Investment Treaty,”
U.S.-China Economic and Security Review Commission, August 1, 2016.
† For more information on China’s commitments at the Paris Climate Conference, see U.S.-China
Economic and Security Review Commission, Economics and Trade Bulletin, January 6, 2016.