US 'close to finalising' parts of trade deal with China: USTR

China's Vice-Premier Liu He gestures to the media between US Trade Representative Robert Lighthizer (left) and Treasury Secretary Steve Mnuchin before the two countries' trade negotiations in Washington, Oct 10, 2019.
China's Vice-Premier Liu He gestures to the media between US Trade Representative Robert Lighthizer (left) and Treasury Secretary Steve Mnuchin before the two countries' trade negotiations in Washington, Oct 10, 2019.PHOTO: REUTERS

WASHINGTON (AFP) - Washington and Beijing are making "headway" on key issues in their ongoing trade dispute and discussions will continue, the US Trade Representative's office said on Friday (Oct 25) following a phone call between senior officials.

China said parts of the text for the first phase of a trade deal with the US are “basically completed” as the two sides reached a consensus in areas including standards used by agricultural regulators.

The Saturday comments followed a call Friday with Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

The trade negotiators “agreed to properly resolve their core concerns and confirmed that the technical consultations of some of the text agreement were basically completed,” China’s Ministry of Commerce said in a statement on Saturday.

President Donald Trump heralded a major win in his offensive against China two weeks ago, saying the economic powers were close to concluding a "substantial phase one deal."

However the details were, and remain, scarce and the two sides have not announced rollbacks of existing tariffs on hundreds of billions of dollars in trade.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with China's Vice-Premier Liu He on Friday on "Phase One of the US-China trade agreement," USTR announced.

"They made headway on specific issues and the two sides are close to finalizing some sections of the agreement," the statement said.

While the statement did not provide any specifics, it said, discussions "will go on continuously at the deputy level and the principals will have another call in the near future."

Trump said China committed to a surge in purchases of American farm products and the deal also covers intellectual property, financial services and currencies.

The White House held off on a massive tariff increase planned for Oct 15 on US$250 billion (S$340 billion) in Chinese goods but new 15 per cent tariffs on another US$150 billion in goods are still scheduled for December.

EAGER FOR A DEAL?

Trump said he expected to sign an agreement with Chinese leader Xi Jinping on the sidelines of the APEC summit in Santiago, Chile in mid-November.

"We're doing very well with China," Trump told reporters on Friday. "China wants a deal. They'd like to see some reductions in tariffs."

With hundreds of billions of dollars in two-way trade now subject to steep tariffs, there are mounting signs the trade war - now in its second year - has damaged the world economy, adding to pressure on both sides to strike a deal.

The International Monetary Fund has issued increasingly dire warnings about the conflict, saying the impact has moved beyond the theoretical and is inflicting real harm, potentially shrinking the global economy by US$700 billion in 2020.

At a gathering of world finance officials in Washington last week, IMF chief Kristalina Georgieva said that, with the trade tensions undermining confidence and business investment, "peer pressure" is building to oblige all sides to play by the rules.

But Trump, who has had to provide massive aid to US farmers hit by Chinese tariffs, insists the deal will be a boon for the farm sector.

"They really want a deal. They're going to be buying much more farm products than anybody ever thought possible," he said of China.