(Bloomberg) --
Reviving liquefied natural gas exports to China could form part of an interim trade agreement with Beijing, according to comments from U.S. Commerce Secretary Wilbur Ross.
LNG and soybeans are among the goods being discussed in phase one negotiations dealing with current trade issues, Ross said Tuesday in a telephone press conference from Bangkok. Sealing a smaller, first-round accord would help reduce tensions and rebuild trust, and could be the precursor to a more robust pact that addresses structural issues, he said.
China hasn't imported a cargo of U.S. LNG since April after it placed a retaliatory 25% tariff on shipments last year. In the long run, that could be a missed opportunity to develop trade in a commodity that would benefit both countries. China is the world's fastest growing market for the super-chilled fuel, which it wants to use in place of coal to fight pollution. And the U.S., buoyed by booming natural gas production from shale fields, could easily be on track to be the world's biggest exporter.
Cutting tariffs to encourage free trade is just one aspect of a deal that could be brewing. U.S. companies are looking to finance new export projects, and multi-billion dollar, long-term purchase agreements with Chinese energy firms would help plug the funding gap.
In the short term, though, China's LNG needs are more modest as the nation is already well-supplied ahead of its peak winter demand season.
--With assistance from Stephen Stapczynski and James Mayger.
To contact the reporter on this story: Dan Murtaugh in Singapore at dmurtaugh@bloomberg.net
To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Jason Rogers
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