Fri, Feb 22, 2019 - Page 1 News List

US, China ‘sketch outline’ of deal to end trade row

END IN SIGHT?Negotiators are drafting six MOUs that they say constitute a major step in getting China to sign onto broad principles and specific commitments on key issues

Reuters, WASHINGTON

Jobseekers look at employment postings at a recruitment fair in Qingdao, China, on Wednesday.

Photo: AFP

The US and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month spat, sources familiar with the negotiations said.

As officials hold high-level talks yesterday and today in Washington, they remain far apart on demands made by US President Donald Trump’s administration for structural changes to China’s economy.

However, the broad outline of what could make up a deal is beginning to emerge from the talks, the sources said, as the two sides push for an agreement by Friday next week — the end of a 90-day truce that Trump and Chinese President Xi Jinping (習近平) agreed to when they met in Argentina last year.

Negotiators are drawing up six memorandums of understanding (MOUs) on structural issues: forced technology transfer and cybertheft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, two sources said.

At meetings between US and Chinese officials last week in Beijing, the two sides traded texts and worked on outlining obligations on paper, one of the sources said.

The process has become a real trade negotiation, so much so that at the end of the week the participants considered staying in Beijing to keep working, but instead agreed to take a few days off and reconvene in Washington, they added.

The sources requested anonymity to speak candidly about the talks.

Chinese Ministry of Commerce spokesman Gao Feng (高峰) yesterday declined to comment on the MOUs.

The MOUs cover the most complex issues affecting the trading relationship between the two countries and are meant, from the US perspective, to end the practices that led Trump to start levying duties on Chinese imports in the first place.

One source cautioned that the talks could still end in failure, but the work on the MOUs was a significant step in getting China to sign up to both broad principles and specific commitments on key issues, he said.

Several Chinese government sources said that the two countries have basically reached a consensus on alleviating the trade imbalances, but there were still some differences on each other’s “core demands” that they were seeking to narrow.

“It can be said that we are now in the sprint phase, and both negotiating teams are working toward the goal of reaching an agreement within the deadline, but some problems are still quite complicated to resolve,” one Chinese official said.

On currency, US officials have warned China against devaluing its yuan to gain a competitive advantage after the Chinese currency weakened significantly against the US dollar last year, partly counteracting Trump’s tariffs.

The two sides were discussing an enforcement mechanism for the deal, the source said.

The parties also were looking at a 10-item list of ways that China could reduce its trade surplus with the US, including by buying agricultural produce, energy and goods such as semiconductors, two other sources said.

Lower-level officials held a round of talks in Washington on Tuesday and Wednesday. They were to be joined yesterday by the top-level negotiators, led by US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He (劉鶴).

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