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Both countries pledge to launch talks on investment, financial services

WASHINGTON, DC – 07/11/08 – The US and China have signed a framework for an agreement to define cooperation on energy and environmental issues and will soon launch negotiations to reach a comprehensive investment and financial services treaty.

US Treasury Secretary Henry Paulson announced the agreement after he and Chinese Vice Premier Wang Qishan completed two days of meetings at the US Naval Academy in Annapolis, Maryland which concluded with the signing of the Energy and Environment Cooperation Framework.

The framework is designed to address energy security, environmental sustainability and climate change, Paulson said at a news briefing.

According to Paulson, the 10-year framework will center on five areas – electricity, air, water, transportation and conservation of forest and wetland ecosystems – and will give both countries “the opportunity to pursue the concept of eco-partnerships as a potential vehicle for voluntary cooperative initiatives across public and private entities.”

In addition to the environmental and energy arrangement, Paulson said negotiations are being launched on a bilateral investment treaty.

"The conclusion of [an investment treaty] would send a strong signal that our two nations welcome investment and will treat each other's investors in a fair and transparent manner," he said.

A new investment agreement, he said, would set standards for nondiscriminatory treatment of investments, set clear and fair regulations and set up a mechanism for arbitration of disputes and would mirror the similar arrangements Beijing currently has with several European and Asian nations.

The Annapolis meeting was the fourth in the semiannual round of high-level economic talks under the "strategic economic dialogue" Paulson launched in 2006 shortly after joining the Bush administration.

The next meeting will be held in Beijing in December.

Other agreements reached in the talks included the creation of working groups will look at eliminating trade barriers to environmental goods and the setting the parameters for cooperation between the two countries in the case of “sudden energy emergencies.

It also outlines cooperation on forest management and efforts to halt illegal logging and defines the terms of China’s easing non-tariff barriers to allow US financial service companies to operate or make investments in China and permit US-based credit-rating agencies operate more freely in China.

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