US, Chinese trade deputies meet in bid to bridge divide

Talks on agricultural issues, China's IP rules aimed at laying groundwork for Oct sessions

WASHINGTON • US and Chinese deputy trade negotiators were set to resume face-to-face talks yesterday for the first time in nearly two months as the world's two largest economies try to bridge deep policy differences and find a way out of a bitter and protracted trade war.

The negotiations yesterday and today are aimed at laying the groundwork for high-level talks early next month that will determine whether the two countries are working towards a solution or headed for new and higher tariffs on each other's goods.

A delegation of about 30 Chinese officials, led by Vice-Finance Minister Liao Min, was set to launch talks yesterday morning. The US side is expected to be led by Deputy US Trade Representative Jeffrey Gerrish.

The talks are likely to focus heavily on agriculture, including US demands that China buys substantially more US soya beans and other farm produce, said a person with knowledge of the discussions.

Two negotiating sessions over the two days will cover agricultural issues, while just one will be devoted to texts covering core changes to boost China's intellectual property protections and end the forced transfer of US technology to Chinese firms.

"Sessions on agriculture will get a disproportionate amount of time," the source said, adding that one session will focus on President Donald Trump's demand that China cut off shipments of the synthetic opioid fentanyl to the US.

Mr Trump is eager to provide export opportunities for US farmers, one of his key political constituencies, who have been battered by China's retaliatory tariffs on US soya beans and other agricultural commodities.

Trade experts, executives and government officials in both the US and China say that even if the... negotiations were to produce an interim deal that includes purchases and a reprieve for Huawei, the trade war has hardened into a political and ideological battle that runs far deeper than tariffs and could take years to resolve.

US Treasury Secretary Steven Mnuchin, who will participate in next month's talks along with US Trade Representative Robert Lighthizer and Chinese Vice-Premier Liu He, has said currency issues will be a focus of the new rounds of talks.

Mr Mnuchin formally declared China a currency manipulator last month after the yuan weakened beyond 7 to the dollar, accusing Beijing of pushing its currency lower to gain a trade advantage.

Mr Trump has said China failed to follow through on agricultural purchase commitments made by President Xi Jinping at a Group of 20 leaders' summit in Osaka, Japan, as a goodwill gesture to get stalled talks back on track. But China has denied that such commitments were made.

When such purchases failed to materialise during US-China trade talks in late July, Mr Trump quickly moved to impose 10 per cent tariffs on virtually all remaining Chinese imports untouched by previous rounds of tariffs.

 
 

But in an easing of tensions last week, Mr Trump delayed a scheduled Oct 1 tariff hike on US$250 billion (S$344 billion) worth of Chinese imports till the middle of the month, as China postponed tariffs on some US cancer drugs, animal feed ingredients and lubricants.

Beijing is also seeking an easing of US sanctions against telecoms equipment maker Huawei Technologies, which has been largely cut off from buying sensitive US technology products.

The spectre of a global recession has prompted central banks around the world to loosen policy in recent months. The US Federal Reserve on Wednesday cut rates for the second time this year, saying the move provided "insurance against ongoing risks", including weak world growth and resurgent trade tensions.

Trade experts, executives and government officials in both the US and China say that even if the September and October negotiations were to produce an interim deal that includes purchases and a reprieve for Huawei, the trade war has hardened into a political and ideological battle that runs far deeper than tariffs and could take years to resolve.

Representative Kevin Brady, the top Republican on the House Ways and Means Committee, said on Wednesday that he was cautiously optimistic about the talks. He added that while he is no fan of tariffs, Mr Trump was right to challenge China's trade actions.

REUTERS

 
A version of this article appeared in the print edition of The Straits Times on September 20, 2019, with the headline 'US, Chinese trade deputies meet in bid to bridge divide'. Print Edition | Subscribe