Progress on trade

The Washington Post - - FRONT PAGE - BY DAVID J. LYNCH AND GERRY SHIH [email protected]­post.com [email protected]­post.com

Ne­go­tia­tors are mov­ing to­ward fi­nal­iz­ing a par­tial U.s.-china trade deal, in­clud­ing the re­moval of some tar­iffs, but sev­eral core is­sues are un­re­solved.

Ne­go­tia­tors are mak­ing progress to­ward fi­nal­iz­ing a par­tial trade deal between the United States and China, in­clud­ing agree­ing on the re­moval of some of the tar­iffs that have dis­rupted tran­sPa­cific com­merce for the past year and a half.

But Amer­i­can and Chi­nese diplomats still must re­solve sev­eral core is­sues be­fore the text is ready for Pres­i­dent Trump and Chi­nese Pres­i­dent Xi Jin­ping to sign, ac­cord­ing to peo­ple fa­mil­iar with the talks.

The Dow Jones in­dus­trial av­er­age on Thurs­day rose 182 points, or 0.7 per­cent, amid the pos­i­tive sig­nals.

Nearly four weeks af­ter Trump said the two sides had reached an “agree­ment in prin­ci­ple,” the White House and China con­tinue to hag­gle over terms. Among them: the ex­tent to which the United States will roll back tar­iffs on Chi­nese im­ports as well as spe­cific Chi­nese pledges to pro­tect the in­tel­lec­tual prop­erty and trade se­crets of U.S. com­pa­nies.

Some other pro­vi­sions are largely com­plete, in­clud­ing ones that gov­ern cur­rency moves and the open­ing of China’s fi­nan­cial ser­vices mar­ket to for­eign firms.

“Our un­der­stand­ing is the two sides are very close to an agree­ment,” said My­ron Bril­liant, ex­ec­u­tive vice pres­i­dent for the U.S. Cham­ber of Com­merce. “The tim­ing is still to be de­ter­mined.”

Hopes for a mid-novem­ber sign­ing, how­ever, have been dashed, and of­fi­cials from the two coun­tries are con­sid­er­ing al­ter­na­tive op­tions for a sign­ing next month if the deal is com­plete by then.

With the pres­i­dent sched­uled to at­tend a North At­lantic Treaty Or­ga­ni­za­tion sum­mit in Lon­don on Dec. 3-4, a Euro­pean venue might make sense. Trump said on Sun­day that the sign­ing would take place in the United States, but Chi­nese of­fi­cials have not agreed to that.

As the talks in­ten­sify, Chi­nese of­fi­cials are push­ing for ad­di­tional ad­min­is­tra­tion con­ces­sions. The pres­i­dent last month called off a planned Oct. 15 in­crease in U.S. tar­iffs on $250 bil­lion in Chi­nese goods af­ter ne­go­tia­tors sketched the out­lines of a “phase one” deal.

Trump is be­lieved likely to aban­don plans to im­pose im­port levies start­ing Dec. 15 on an ad­di­tional $160 bil­lion in prod­ucts, in­clud­ing many pop­u­lar con­sumer items such as smart­phones and lap­top com­put­ers.

Chi­nese of­fi­cials also want the United States to elim­i­nate the 15 per­cent tar­iff that Trump im­posed Sept. 1 on about $112 bil­lion in im­ports. In re­turn, the United States wants China to agree to more ex­ten­sive in­tel­lec­tual prop­erty safe­guards, ac­cord­ing to two peo­ple fa­mil­iar with the bar­gain­ing.

“That de­ci­sion is wholly and ex­clu­sively in the pres­i­dent’s hands,” said one per­son who had been briefed on the talks and who spoke on the con­di­tion of anonymity to de­scribe the con­fi­den­tial dis­cus­sions.

China’s Com­merce Min­istry said Thurs­day that U.S. and Chi­nese ne­go­tia­tors had agreed in prin­ci­ple to roll back tar­iffs in si­mul­ta­ne­ous stages if their trade talks ad­vance.

Gao Feng, the min­istry spokesman, said the two coun­tries have held “earnest and con­struc­tive” talks.

“If the two par­ties reach the first-phase agree­ment, they should, in ac­cor­dance with the con­tents of the agree­ment, si­mul­ta­ne­ously and pro­por­tion­ally can­cel the tar­iffs that were al­ready raised,” Gao said. “This is an im­por­tant con­di­tion for reach­ing an agree­ment.”

Robert E. Lighthizer, the pres­i­dent’s chief trade rep­re­sen­ta­tive, has been seek­ing Chi­nese agree­ment to an en­force­ment mech­a­nism that would con­di­tion tar­iff re­duc­tions on Chi­nese im­ple­men­ta­tion of the agree­ment. Tar­iffs would fall — or rise — de­pend­ing upon whether Bei­jing com­plied with spe­cific terms, said one per­son fa­mil­iar with the talks.

“China’s put a bit of a spin on it,” the per­son said, re­fer­ring to the Com­merce Min­istry state­ment.

Tar­iff re­duc­tions in the pre­lim­i­nary deal could amount to a bar­gain­ing win for Bei­jing. China has long said that the United States must roll back levies as a con­di­tion of a trade deal and has sought a tar­iff re­duc­tion as part of any first step.

“China’s po­si­tion has been con­sis­tent and clear: The trade war was started by rais­ing tar­iffs, and so it should be ended by can­cel­ing them,” Gao told re­porters in Bei­jing.

Ear­lier Thurs­day, China pub­li­cized in un­usual fash­ion the sen­tenc­ing of nine peo­ple con­victed of traf­fick­ing fen­tanyl to the United States. Trump has long lam­basted China for not do­ing enough to crack down on pro­duc­tion of the deadly opi­oid and sug­gested that Chi­nese progress in stem­ming the flow would be part of what he sought in a broad trade deal.

China has played down its role in the U.S. opi­oid epi­demic and de­nied that trade con­cerns mo­ti­vated its drug-en­force­ment ac­tions.

Re­newed prospects for a deal come as the trade war’s toll is mount­ing. Tar­iff hikes are cost­ing the econ­omy 40,000 jobs per month, ac­cord­ing to a rough es­ti­mate by the Fed­eral Re­serve Bank of At­lanta.

In a Fed sur­vey, 20 per­cent of man­u­fac­tur­ers said they had post­poned or re­duced planned cap­i­tal in­vest­ment in the first half of 2019.

The trade war cost the U.S. econ­omy $40 bil­lion in to­tal busi­ness in­vest­ment dur­ing that pe­riod, dou­ble the fig­ure for the last six months of 2018, the bank said.

“The neg­a­tive ef­fects of trade pol­icy de­vel­op­ments on U.S. busi­ness ac­tiv­ity have grown over time, par­tic­u­larly for firms with an in­ter­na­tional reach,” the re­gional Fed bank said.

The trade talks have missed mul­ti­ple dead­lines since Trump and Xi launched them 11 months ago over a steak din­ner in Buenos Aires. So while the Com­merce Min­istry state­ment lifted hopes that a par­tial deal may fi­nally be com­ing into sight, some ob­servers coun­seled cau­tion.

“What is ac­tu­ally in the agree­ment is still not clear,” one said. “It is clear that they’re close.”

RO­MAN PILIPEY/EPA-EFE/SHUTTERSTO­CK

Ne­go­tia­tors for Chi­nese Pres­i­dent Xi Jin­ping and Pres­i­dent Trump have agreed on the re­moval of some tar­iffs as part of a trade pact.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.