WASHINGTON/TOKYO • US Treasury Secretary Steven Mnuchin said an American-China trade agreement would go "way beyond" previous efforts to open China's markets to US companies and hoped that the two sides were close to the final round of negotiations.
Mr Mnuchin, speaking to reporters on the sidelines of the International Monetary Fund and World Bank spring meetings, said he and US Trade Representative Robert Lighthizer would hold two calls this week with Chinese Vice-Premier Liu He. The officials were also discussing whether more in-person meetings were necessary to conclude an agreement.
"I think we're hopeful that we're getting close to the final round of concluding issues," Mr Mnuchin said last Saturday.
Beijing and Washington are seeking a deal to end a bitter trade war marked by tit-for-tat tariffs that have cost the world's two largest economies billions of dollars, disrupted supply chains and rattled financial markets.
The United States is seeking sweeping changes to China's economic and trade policies, including new protections for US intellectual property, an end to forced technology transfers and cybertheft of trade secrets.
Washington also wants Beijing to curb industrial subsidies, open its economy wider to US firms and increase purchases of American farm, energy and manufactured goods to shrink a US$419 billion (S$567 billion) US trade deficit with China.
Asked whether market openings in the agreement would go beyond what was contemplated in the 2016 Bilateral Investment Treaty (BIT) negotiations, Mr Mnuchin said: "We are making progress, I want to be careful. This is not a public negotiation... This is a very, very detailed agreement covering issues that have never been dealt with before.
"This is way beyond anything that looked like a bilateral investment treaty."
The BIT talks, pursued by the Obama administration, stalled as China refused to satisfy US demands to open significant sectors of its economy to foreign investment.
The talks were not taken up by the Trump administration, which pursued tariffs on Chinese goods instead, leading to the current talks.
Mr Mnuchin said the two sides are negotiating an agreement with seven chapters that would be the most significant change in the trading relationship in 40 years.
He said the deal would have real enforcement on both sides, adding that the US was open to being subjected to penalties if it failed to keep its commitments in the deal.
"I would expect that the enforcement mechanism works in both directions, that we expect to honour our commitments, and if we don't, there should be certain repercussions, and the same way in the other direction," he said.
Meanwhile, as optimism grows that the US and China are nearing a trade deal, Japan kicks off its own negotiations with Washington from today. Mr Lighthizer and Japanese Economy Minister Toshimitsu Motegi are set to embark on two days of talks in Washington.
Mr Motegi had said the talks would be candid, with the first round today about "making a decision on which areas we will discuss, chiefly in the field of goods".
In May last year, US President Donald Trump ordered his administration to investigate the possibility of imposing tariffs of up to 25 per cent on foreign cars and car parts.
The prospect alarmed the industry and could have serious repercussions for Japan and Europe.
Mr Trump has frequently complained that Japan has an unfair advantage in bilateral trade and vowed to fix that.
Tokyo is expected to demand that the US scrap tariffs on Japanese industrial goods, if Washington urges an early opening of Japanese agricultural markets.
Mr Trump and Japanese Prime Minister Shinzo Abe will have plenty of opportunities to talk trade in the coming months. Mr Abe is visiting the US later this month and Mr Trump is expected in Japan next month to pay his respects to the country's new emperor, who will take the throne on May 1.
REUTERS, AGENCE FRANCE-PRESSE