US, China draft 6 pacts on top trade war issues
But still far apart on ‘core demands’ as March 1 deadline looms
WASHINGTON— The United States and China made the most significant progress in ending a seven-month trade war as negotiators drew up six agreements on the most contentious issues.
Two sources told Reuters that negotiators were drafting agreements on forced technology transfer and cybertheft, intellectual property rights, services, currency, agriculture and nontariff barriers to trade.
Although negotiators remained far apart on US President Donald Trump’s demand for structural changes to China’s economy, the broad outline of a possible deal began to emerge from the talks.
Returning to balance
Several Chinese government sources confirmed that the two sides have agreed on the trade imbalances, but there were still gaps on each other’s “core demands” that they were seeking to narrow.
One source cautioned that the talks could still end in failure. But the work on the MOUs was a significant step in get- ting China to sign up both to broad principles and to specific commitments on key issues, he said.
“It can be said that we are now in the sprint phase, and both negotiating teams are working towards the goal of reaching an agreement within the deadline, but some problems are still quite complicated to resolve,” said one Chinese official familiar with the situation.
Trump administration officials also object to nontariff barriers, like industrial subsidies, regulations, business licensing procedures, product standards reviews and other practices.
US officials have also warned China against devaluing its yuan to gain a competitive advantage after the Chinese currency weakened significantly against the dollar last year, partly counteracting Trump’s tariffs.
The two sides were discussing an enforcement mechanism for the deal, the source said.
The parties also were looking at a 10-item list of ways that China could reduce its trade surplus with the United States, including by buying agricultural produce, energy and goods such as semiconductors, according to two other sources.
The clock is ticking
The two sides are working toward an agreement by March 1, the end of a 90-day truce that Trump and Chinese President Xi Jinping agreed to when they met in Argentina late last year.
The sources said progress in the talks began at meetings in Beijing last week, when the two sides traded texts and worked on outlining obligations.
The process has become a real trade negotiation, the source said, so much so that at the end of the week the participants considered staying in Beijing to keep working.
But they agreed to take a few days off and reconvene in Washington.
Lower-level officials held a round of talks in Washington on Tuesday and Wednesday.
They will be joined on Thursday by US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.