China, US pore over details of agreement text to end trade war as latest talks conclude in Beijing

US Treasury Secretary Steven Mnuchin is in Beijing for the next round of discussions as both the US and China seek to end a bitter trade war.
US Treasury Secretary Steven Mnuchin is in Beijing for the next round of discussions as both the US and China seek to end a bitter trade war.PHOTO: REUTERS

BEIJING (BLOOMBERG, REUTERS) - Chinese and US negotiators are working line-by-line through the text of an agreement that can be put before President Donald Trump and counterpart Xi Jinping to defuse a nearly year-long trade war, according to officials familiar with the matter. 

US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer held meetings in Beijing Friday (March 29) partly to ensure there were no discrepancies in the English and Chinese-language versions of the text, and also to balance the number of working visits to each capital, according to the officials, who asked not to be identified because the talks aren’t public.

Chinese Vice-Premier Liu He is due in Washington next week. 

Mnuchin said in a tweet on Friday (March 29) that he and Lighthizer had concluded “constructive” trade talks in Beijing. “I look forward to welcoming China’s Vice-Premier Liu He to continue these important discussions in Washington next week,” he said in the tweet. 

The focus on the joint wording of any agreement has become a key issue after US officials complained that Chinese versions of the text had walked back or omitted commitments made by negotiators, the officials said.

The two sides have very different understandings of certain words, according to one of the officials, who noted that China’s Vice-Commerce Minister Wang Shouwen started his career as a translator at the ministry.  China’s Commerce Ministry didn’t immediately respond to faxed questions seeking comment. 

The burst of diplomacy suggests both sides remain determined to reach an agreement that would avoid any escalation of a trade war that has seen them impose duties on US$360 billion of each others’ imports.

China wants the US tariffs imposed on Chinese goods lifted but Trump said last week the duties would remain in place for a “substantial period of time.”

At stake is an agreement that could resolve a conflict that’s roiled markets and cast a shadow over the global economy.

White House economic adviser Larry Kudlow said Thursday the two sides were “close” but “not there yet,” and that the US is willing to keep negotiating for weeks or even months yet to reach a sustainable deal. 

“This is not time-dependent,” he said in a speech in Washington on Thursday. “This is policy- and enforcement-dependent.”

Kudlow said the US may drop some tariffs if a trade deal is reached while keeping others in place to ensure Beijing’s compliance.  

As China nears agreement with the US, officials are keen to maintain an appearance of equality between the two sides, hence the focus on matching visits to Beijing and Washington, the people said.

While talks have taken place by phone over the past month, the last face-to-face meetings took place in Washington in February.=

Mr Trump imposed tariffs on US$250 billion (S$340 billion) of Chinese imports last year in a move to force China to change the way it does business with the rest of the world and to pry open more of China’s economy to US companies.  

On Thursday, Chinese Premier Li Keqiang said Beijing will sharply expand market access for foreign banks and securities and insurance companies, adding to speculation that 
China may soon announce new rules to allow foreign financial firms to increase their presence at home.  

 
 

Among Mr Trump’s demands are for Beijing to end practices that Washington alleges result in the systematic theft of US  intellectual property and the forced transfer of American technology to Chinese companies.  

US companies say they are often pressured into handing over technological know-how to Chinese joint venture partners, local officials or regulators as a condition for doing business in China.  

The US government says that technology is often subsequently transferred to and used by Chinese competitors.  

The issue has proved a tough one for negotiators as US officials say China has previously refused to acknowledge the problem exists to the extent alleged by the US, making discussing a resolution difficult.  

China says it has no technology transfer requirements enshrined in its laws and any such transfers are a result of legitimate transactions.