US-China trade war
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China and the US say they are making good progress towards a “phase-one” deal. Photo: Reuters

China, United States say good progress being made on phase-one deal to end trade war

  • Negotiators have ‘agreed to appropriately resolve the core concerns of both parties’, Xinhua says
  • After agreeing on the ‘easy parts’, the two sides are now ‘warmed up’ for their trickier phase-two negotiations, analyst says
China and the United States are making good progress on the “ phase-one” trade deal they hope to sign next month, with some sections now close to being finalised, the two sides said in separate statements.
The announcements came after China’s Vice-Premier Liu He spoke to US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin over the phone on Friday night, as they continued to look for ways to bring an end to a 15-month trade war that has damaged economies around the world.

According to a statement from Xinhua on Saturday, the two sides have reached consensus on US imports of Chinese cooked poultry and a quality supervision system for catfish products, as well as China lifting a ban on US poultry, and how to apply a public health information system for meat products.

“Both sides agreed to appropriately resolve the core concerns of both parties,” it said. “Working-level deputies will speed up talks for the trade deal before the principals talk over the phone in the near future,” it said.

The Office of the US Trade Representative, meanwhile, said on Friday that officials have “made headway on specific issues” and were “close to finalising some sections of the agreement”.

Chen Fengying, a senior researcher at the China Institute of Contemporary International Relations in Beijing, said reaching a phase-one deal was “not a big problem” as some sections had been completed and China had begun to honour its commitments by purchasing more US agricultural products.

“It makes sense to start with the easy parts and then move on to the difficult ones,” she said. “It can’t be done overnight as the negotiation list is probably thousands of pages long.”

Hopes are rising that a deal will be ready for President Xi Jinping and President Donald Trump to sign when they meet on the sidelines of the Asia-Pacific Economic Cooperation summit in Chile on November 16-17.
The US-China trade war has damaged economies around the world. Photo: Bloomberg

In the past week, Beijing has promised to buy US$40 billion to US$50 billion worth of US farm produce – partly in return for Washington suspending a planned tariff increase originally planned for October 15 – and further open its financial markets. However, it is still facing the prospect of the US imposing a new 15 per cent tariff on about US$160 billion worth of its goods on December 15.

Chen said the partial deal could pave the way for agreement on some of the trickier issues.

“The two sides might have warmed up for the more difficult issues scheduled for the phase-two negotiations,” she said.


Phase two is expected to cover a number of thorny issues, including intellectual property rights, forced technology transfers, and an enforcement mechanism.

Wang Yiwei, a professor of international relations at Renmin University of China, said Beijing was more wary of Washington’s demands for institutional reforms.


“China is always willing to negotiate on technical issues such as trade, but it remains on high alert to some US attempts to package strategic gaming into the negotiations and won’t make concessions,” he said.

“But China is willing to make more reforms. The US’s demands, such as on market opening and intellectual property protection, can be met.”

Comparing the ongoing talks to China’s 15-year effort to join the World Trade Organisation, Chen said Beijing may decide to introduce more institutional changes after the Communist Party’s Fourth Plenum, a four-day event that gets under way on Monday, though any such moves would be gradual.

After the central government formulated the policies, they would then be allowed to become “widely accepted before being implemented”, she said.

Photo: Bloomberg

Trump, who is facing the threat of impeachment at home, has not commented on China on Twitter since the latest round of trade talks in Washington almost two weeks ago.

Despite the progress towards a trade deal, concerns remain as to whether consensus can be reached after US Vice-President Mike Pence linked Xinjiang and Hong Kong to the trade war during a speech on Thursday that sparked criticism from China’s foreign ministry, which described it as “political bias and lies”.

“[But] China must understand that Trump is trying to paint himself as a winner in the run-up to the [2020] presidential election, so it doesn’t need to overreact,” Chen said.

China’s state media have made repeated calls for the US to create a good atmosphere for the negotiations.

“The goal of cooperation and win-win can only be achieved on the condition of equality, mutual respect and appropriately addressing the core concerns of both parties,” the Communist mouthpiece People’s Daily said in an editorial on Saturday.

Additional reporting by Reuters

This article appeared in the South China Morning Post print edition as: both sides nearer to ‘phase-one’ agreement