Source:
https://scmp.com/news/china/article/3036013/top-us-and-china-trade-negotiators-reach-consensus-principles
China/ Diplomacy

US and China cite progress in trade war negotiations during phone call

  • Chinese commerce ministry cites ‘consensus on principles’ after Vice-Premier Liu He speaks with USTR’s Lighthizer and Treasury Secretary Mnuchin
  • US side cites ‘progress in a variety of areas’
US Trade Representative Robert Lighthizer (left) and Chinese Vice-Premier Liu He (right) spoke over the phone on Friday. Photo: AFP

The US and China moved closer to a trade agreement on a Friday evening phone call between the two countries’ top negotiators, according to statements from both sides.

Chinese Vice-Premier Liu He, speaking with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin “reached consensus on principles” concerning their 17-month trade war, China’s commerce ministry said, without specifying which ones.

“The two sides conducted serious and constructive discussions on properly addressing their core concerns,” the ministry added in its brief statement.

Meanwhile, USTR said in a statement that the two sides “made progress in a variety of areas and are in the process of resolving outstanding issues”, also without elaborating on which areas or issues were discussed.

“Discussions will continue at the deputy level,” it said.

China’s Minister of Commerce Zhong Shan, Governor of the People’s Bank of China Yi Gang, and the deputy director of the National Development and Reform Commission Ning Jizhen were also on the call, the ministry said, adding “the two sides discussed the next consultations”.

Chinese President Xi Jinping and US President Donald Trump were expected to meet after the Asia-Pacific Economic Cooperation summit in Santiago, Chile to sign a “phase-one” trade deal touted last month, which would lead to greater purchases by China of US agricultural goods and provide greater intellectual property protections.

Trump said in a tweet on Thursday that both sides were still looking for a new location for signing the deal.

Lu Xiang, an expert on US-China relations at the Chinese Academy of Social Sciences, said the US was unlikely to drag the interim deal into 2020 when the US officially entered its presidential election year.

“I think they are eager to get an interim achievement before next year,” he said.

“As for the location to sign a deal, that’s not hard to find as long as both sides are sincere about getting the deal done.”

Donald Trump and Xi Jinping were expected to sign an interim trade deal at the now-cancelled Apec meeting. Photo: AP
Donald Trump and Xi Jinping were expected to sign an interim trade deal at the now-cancelled Apec meeting. Photo: AP

That interim deal largely avoided the more fundamental structural issues that would be left to a phase-two and possibly a phase-three agreement.

Trade envoys from Beijing and Washington had been working to set the text of the interim trade agreement the two leaders would sign.

The US government wants China to end heavy state subsidies and to agree to an enforcement mechanism to curb China’s practice of forcing foreign companies to transfer proprietary technology to Chinese joint venture partners, among other measures.

However, China has balked on making structural changes that would address these demands. Disagreements over how an enforcement mechanism would work was one factor in the breakdown of talks earlier this year.

Sean King, a former US trade official who is now senior vice-president of political strategy firm Park Strategies, said Beijing might have wanted to get a phase-one deal done as soon as possible to avert another round of tariffs set to take effect in December.

It was likely China also wanted to “avoid any such early deal negotiations dragging on into the Democratic primary season, which might only further politicise matters”, he said.

“I think we’ll eventually reach some sort of deal with Beijing, but I’m not sure how much it will mean in practical terms … Its macroeconomic construct can’t fundamentally and/or structurally change as US companies would like it to,” King said.

Additional reporting by Sidney Leng