Ⅱ MUTUAL GOAL: FREE AND OPEN TRADE AND INVESTMENT

The participants noted that economic reform, openness, and competition have had a positive impact on growth, job creation, and innovation in both countries. They endorsed the view that they and their governments should support the development of free and open trade and investment on a bilateral, multilateral, and regional basis to the maximum extent possible. Participants noted that pursuing such a path, especially at a time of global economic difficulties, requires strong leadership from enterprises and governments. Participants pledged to actively support such efforts through their own actions and through recommendations to their governments as described below.

1. Trade

The participants noted that since the establishment of diplomatic relations between China and the United States, bilateral trade has expanded dramatically to the benefit of both countries. However, the participants agreed that many obstacles remain to realizing the full potential of the bilateral trade relationship. The participants agreed that both countries should set as their goals (1) the development of rules-based, free and open trade based on mutual respect, mutual benefit, equality and openness, and (2) increasing support for multilateral and regional institutions that advance the same objective. To this end, the participants endorsed the following views:

i Bilateral

? Participants agreed on the need for the two governments to develop a more ambitious agenda to promote two-way trade and investment liberalization. There was a consensus view that further coordinated efforts by both organizations were needed to study the economic benefits and potential costs to each side of a free bilateral trade agreement. Both sides expressed willingness to conduct additional research on this topic under the Dialogue mechanism and to share the results with their governments.

? Participants highlighted their shared commitment to expanding bilateral trade through building a more open global trading system, resisting trade protectionism, and reducing non-tariff barriers.

? Participants called upon both governments to make renewed efforts to prevent the abuse of trade remedy investigations.

? Participants agreed that both governments should take efforts to remove unreasonable restrictions on exports of high-tech products.

? Participants agreed to advocate for closer commercial cooperation the areas of energy and environmental protection, and to work to facilitate trade in LNG.

ⅱ Multilateral

? Participants expressed firm support for the World Trade Organization's commitment to improving the global rules-based trading system, and called upon their governments to enhance cooperation to strengthen the system and promote concrete outcomes that will boost trade and living standards in the two economies and around the world.

? Participants agreed that they share a priority to finalize a balanced Doha Round Early Harvest Agreement that covers trade facilitation, agriculture, and development as a key deliverable at the upcoming WTO Ministerial in Bali. Participants agreed such an agreement would provide a solid foundation for the completion of the Doha Round.

? Participants expressed support for ongoing efforts to negotiate an expansion of the product coverage of the WTO's Information Technology Agreement (ITA), noting that the ITA has proven to be one of the most commercially successful trade agreements in the WTO by making the newest technologies more affordable and available around the world.

? Participants recognized the potential of the Trade in Services Agreement (TISA) to spur new trade flows and accelerate economic growth. They agreed to continue to discuss the TISA at future meetings of the Dialogue.

ⅲ Regional

? Participants noted that in the absence of comprehensive trade liberalization under the WTO, it is important that both governments continue to negotiate agreements that eliminate barriers to trade and investment, and uphold the rules governing international commerce. Participants agreed that free trade agreements should adopt an open architecture-approach.

? US participants voiced support for China's participation in the Trans-Pacific Partnership (TPP) negotiations under the same terms and conditions as the other TPP participants.

? Chinese participants expressed support for the United States and other economies joining a future Regional Comprehensive Economic Partnership (RCEP) agreement following the conclusion of negotiations between ASEAN and its FTA partners.

? Participants agreed that the TPP and RCEP negotiations are complementary and have the potential to increase trade and investment, eliminate various trade, investment and non-trade barriers, and gradually improve transparency, regulatory, and intellectual property protection and enforcement standards in the region.

? Participants on both sides agreed that the emergence of hundreds of regional trade agreements is a "second best" alternative to the WTO's delivering comprehensive trade liberalization.