US-China trade talks re­sume next week, fo­cus on in­tel­lec­tual prop­erty

Business Standard - - WORLD - JEFF MA­SON

U.S. ne­go­tia­tors are pre­par­ing to press China next week on long­stand­ing de­mands that it re­form how it treats Amer­i­can com­pa­nies’ in­tel­lec­tual prop­erty in or­der to seal a trade deal that could pre­vent tar­iffs from ris­ing on Chi­nese im­ports.

A new round of trade talks be­gins in Bei­jing on Mon­day, af­ter the most re­cent set of ne­go­ti­a­tions con­cluded in Wash­ing­ton last week with­out a deal and with the top U.S. ne­go­tia­tor declar­ing that a lot more work needed to be done.

A White House of­fi­cial said on Fri­day that prepa­ra­tions were un­der way and the talks would con­tinue to fo­cus on press­ing Bei­jing to make struc­tural re­forms.

The White House an­nounced a time­frame for the Bei­jing talks in a state­ment. It said lower-level of­fi­cials will kick off the meet­ings on Mon­day, led on the Amer­i­can side by Deputy U.S. Trade Rep­re­sen­ta­tive Jef­frey Ger­rish.

Higher prin­ci­pal-level talks will take place Thurs­day and Fri­day with U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer and Trea­sury Sec­re­tary Steven Mnuchin.

Lighthizer, named by Trump to spear­head the process af­ter agree­ing a 90-day truce in the trade war with Bei­jing, has been a strong pro­po­nent of push­ing China to make such re­forms and end what the United States views as un­fair trade prac­tices in­clud­ing steal­ing in­tel­lec­tual prop­erty and forc­ing U.S. com­pa­nies to share their tech­nol­ogy with Chi­nese firms.

China has de­nied it en­gages in such prac­tices.

“The United States is a great pro­ducer of tech­nol­ogy, and in­no­va­tion, and know-how, and trade se­crets. And we have to op­er­ate in an en­vi­ron­ment where those things are pro­tected,” Lighthizer said last week af­ter talks at the White House.

“I’m by no means pre­dict­ing suc­cess; there is a lot of work that has to be done,” he said.

The two sides are try­ing to ham­mer out a deal ahead of the March 1 dead­line when U.S. tar­iffs on $200 bil­lion worth of Chi­nese im­ports are sched­uled to in­crease to 25 per­cent from 10 per­cent.

China’s am­bas­sador to the United States, Cui Tiankai, said in Michi­gan on Fri­day that a “zero-sum game” mind­set was de­struc­tive to China-U.S. ties, the state-run news agency Xin­hua re­ported.

Chi­nese and U.S. com­pa­nies should com­pete as well as co­op­er­ate with each other, Cui said.

“The real story in busi­ness is not that black and white,” the re­port quoted him as say­ing.

Trump said on Thurs­day he did not plan to meet with Chi­nese Pres­i­dent Xi Jin­ping be­fore that dead­line, damp­en­ing hopes that a trade pact could be reached quickly.

“We are hear­ing the list of is­sues the two pres­i­dents will ul­ti­mately have to make de­ci­sions on is be­ing nar­rowed, so that’s an in­di­ca­tion that things are be­ing ad­dressed. But we’re also hear­ing that there’s a lot of work to be done,” said Erin En­nis, se­nior vice pres­i­dent of the US- China Busi­ness Coun­cil, who says she has spo­ken with of­fi­cials in both the United States and China. “I don’t think ei­ther side is ex­pect­ing a draft of some­thing next week.”

An­other source who had been briefed on the talks said a lot of work also needed to be done on an en­force­ment mech­a­nism for a po­ten­tial deal.

“If there’s some in­di­ca­tion that they’re mak­ing progress on sub­si­dies, forced tech trans­fer and the con­stel­la­tion of is­sues there and an en­force­ment mech­a­nism, that would be in­ter­est­ing. The word com­ing out of this last round was that there was very limited, measly progress on those is­sues,” the source said.

Es­ca­lat­ing ten­sions be­tween the United States and China have cost both coun­tries bil­lions of dol­lars and roiled global fi­nan­cial mar­kets.

If the ne­go­ti­a­tions do not progress suf­fi­ciently, the U.S. of­fi­cials said in­creased tar­iffs will take ef­fect. Wash­ing­ton could agree to ex­tend the dead­line with­out a deal if talks are pro­gress­ing.

The two sides are try­ing to ham­mer out a deal ahead of the March 1 dead­line when US tar­iffs on $200 bil­lion worth of Chi­nese im­ports are sched­uled to in­crease to 25 per cent from 10 per cent

US Trade Rep­re­sen­ta­tive Robert Lighthizer ( sec­ond from right) with China’s Vice Premier, Liu He ( left), dur­ing the open­ing of US-China trade talks in Wash­ing­ton last month

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