The next round of China-U.S. trade talks will get underway in Beijing this week with significant issues still unresolved but with enforcement mechanisms “close to done,” U.S. Treasury Secretary Steve Mnuchin said.
“There are still some important issues. We still have more work to do,” Mnuchin said on Fox Business. “If we get to a completed agreement, it will have real enforcement provisions,” adding that those provisions are “close to done” and only need “a little bit of fine tuning.”
While both sides are eager to reach an agreement, the possibility remains that President Donald Trump would walk away from the negotiating table with China if he isn’t satisfied with how talks are progressing, according to a senior Trump administration official who spoke on the condition of anonymity.
U.S. Trade Representative Robert Lighthizer and Mnuchin are to begin talks in Beijing today with Chinese Vice Premier Liu He. Discussions will cover trade issues including intellectual property, forced technology transfer, nontariff barriers, agriculture, services, purchases and enforcement, according to a White House statement.
Mnuchin said that there is a strong desire from both sides to wrap this up quickly or move on. “We hope within the next two rounds in China and in D.C. to be at the point where we can either recommend to the the president we have a deal or make a recommendation that we don’t,” he said in taped interview broadcast Monday.
After the meeting in Beijing, Liu will then lead a Chinese delegation to Washington for additional discussions starting May 8. Negotiators have indicated they are close to a deal, and Trump last week said Chinese President Xi Jinping will come to the White House “soon.”
The two sides are locked in a standoff over the Trump administration’s charges that Beijing steals technology and forces foreign companies operating in China to hand over trade secrets. China is pushing to make its companies world leaders in advanced industries such as robotics and artificial intelligence.
Trump has imposed tariffs on $250 billion in Chinese imports; Beijing has retaliated by taxing $110 billion in U.S. goods.
Trump also wants to narrow America’s trade deficit with China — $379 billion last year — by pressing Beijing to agree to accept more U.S. exports. But critics worry that any agreement would come at the expense of other countries that do business with China. Or that U.S. companies might receive preferential access to China and marginalize the World Trade Organization, which is meant to enforce global free trade rule for everybody.
“It clearly undermines the WTO,” said Mary Lovely, a Syracuse University economist. “The two bullies in the room are basically running the show. The rest of the world is going to have to deal with the aftermath.”
The year-long trade war has weighed on confidence and dented shipments, with nine of the 10 gauges tracked by Bloomberg to assess the health of global trade below their average midpoint. Still, the world’s two biggest economies recently posted better-than-expected gross domestic product reports for the first quarter, raising optimism that headwinds are fading for the global economy.
Last week, the Trump administration said China has failed to bolster protection for intellectual property and open its market to more foreign companies, despite Beijing’s promises to reform. The U.S. kept China on a “priority watch list” of nations that don’t adequately protect intellectual property rights, according to the annual report of the trade representative’s office on intellectual property practices around the world.
Xi spent a large portion of a speech to some 40 world leaders on Friday discussing Chinese domestic changes, pledging to address state subsidies, protect intellectual property rights, allow foreign investment in more sectors and avoid competitive devaluation of the yuan.
Information for this article was contributed by Saleha Mohsin, Malcolm Scott, Terrence Dopp and Caitlin Webber of Bloomberg News; and by Paul Wiseman of The Associated Press.