Sun, May 12, 2019 - Page 1 News List

China spells out conditions for a trade agreement

‘HICCUPS’:Chinese Vice Premier Liu He denied that the trade talks had broken down, saying that it was inevitable to have certain disagreements during talks

Bloomberg

Chinese Vice Premier Liu He waves while leaving the Office of the US Trade Representative following a meeting in Washington on Friday.

Photo: Bloomberg

China for the first time on Friday made clear what it wants to see from the US in talks to end their trade dispute, laying bare the deep differences that still exist between the two sides.

In a wide-ranging interview with Chinese media after talks in Washington ended, Chinese Vice Premier Liu He (劉鶴) said that to reach an agreement the US must remove all extra tariffs, set targets for Chinese purchases of goods in line with real demand, and ensure that the text of the deal is “balanced” to ensure the “dignity” of both nations.

Liu’s three conditions underscore the work still to be done if an accord is to be reached between the world’s two largest economies.

US President Donald Trump’s administration told China that it has a month to seal a trade deal or face tariffs on all its exports to the US.

That threat was made during talks on Friday in Washington, hours after Trump upped the ante by imposing a second round of punitive duties on US$200 billion in Chinese goods.

The talks are under close scrutiny across global financial markets and US stocks turned positive after negotiators on both sides said the session had gone fairly well.

Liu said both sides agreed to keep talking, despite what he called “some temporary resistance and distractions,’’ and to hold meetings in Beijing.

He dismissed the idea that talks had broken down.

“It’s normal to have hiccups during the negotiations. It’s inevitable,” he said.

China has not yet detailed how it would retaliate to the latest increase in tariffs.

Liu also struck a note of defiance.

“For the interest of the people of China, the people of US and the people of the whole world, we will deal with this rationally, but China is not afraid, nor are the Chinese people,” he said. “China needs a cooperative agreement with equality and dignity.”

In a series of tweets that cheered markets, Trump on Friday said that the talks with China had been candid and constructive.

Further talks are possible, but there was no immediate plan for the next round, a person familiar with the negotiations said.

Liu’s comments revealed a new fault line. Whereas US negotiators previously accused China of walking back on commitments to change laws on technology transfers, as well as other issues, Liu argued that the US team was pushing for bigger Chinese purchases to level the trade imbalance than had originally been agreed.

Liu said that Chinese President Xi Jinping (習近平) and Trump had achieved an initial consensus “on a number” when they met in Argentina.

That “is a very serious issue and can’t be changed easily,” Liu said.

The amount of purchases by China should be “in line with reality,” the official Xinhua news agency said in a commentary yesterday.

China also sees the removal of all the extra tariffs that have been imposed since last year as a precondition to a deal, whereas US negotiators see retention of some duties as a key mechanism to enforce a deal.

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