By Bob Davis
WASHINGTON -- Negotiators for the U.S. and China have scheduled
a new round of high-level trade talks in Beijing and Washington,
aiming to close a deal by late April to end the yearlong dispute
between the world's two largest economies.
U.S. Trade Representative Robert Lighthizer and Treasury
Secretary Steven Mnuchin expect to fly to Beijing next week to meet
with Chinese Vice Premier Liu He, Trump administration officials
said. The following week, a Chinese delegation led by Mr. He is
expected to continue talks in Washington, the officials said.
People tracking the negotiations said the talks appear to be in
their final stages, following a rocky patch after Chinese leaders
were unnerved by President Trump's decision to abruptly break off
nuclear-disarmament talks with North Korean leader Kim Jong Un in
February.
"We're in the endgame," said Myron Brilliant, executive vice
president of the U.S. Chamber of Commerce.
If the two sides continue to make progress, he said, they should
be able to finish a trade deal by the end of April -- or about one
month later than previously expected.
The two sides are aiming for a package deal that includes
substantial increases in U.S. exports to China, and Chinese pledges
to boost protection of intellectual property, end pressure on U.S.
companies to transfer technology to their Chinese partners and
reduce subsidies for Chinese firms.
But the two sides still have important issues to resolve
including how to enforce a deal and the pace at which the U.S. and
China will roll back the tariffs imposed over the past year. The
U.S. has levied tariffs on $250 billion of Chinese goods, covering
about half the value of Chinese exports to the U.S. Beijing has
retaliated with tariffs on $110 billion of U.S. goods, about 90% of
U.S. exports to China.
Mr. Trump vowed last week to walk away from a deal he considered
insufficient. But behind the scenes, the president has been
pressing Mr. Lighthizer to finish a deal, people familiar with the
discussions said.
"When can you get a deal done?" Mr. Trump asked the trade
representative in a March 12 exchange, these people said. "Two or
three weeks," Mr. Lighthizer replied. Earlier in the day, Mr.
Lighthizer had told the Senate Finance Committee, "Our hope is we
are in the final weeks of an agreement."
A deal also appeared to be at hand late in February, with U.S.
negotiators optimistic that a pact could be sealed by a summit
between Mr. Trump and Chinese President Xi Jinping at Mr. Trump's
Mar-a-Lago estate in Florida by the end of March.
That timetable unraveled after Chinese negotiators saw red flags
in the failed Hanoi summit between Messrs. Trump and Kim. They
feared Mr. Trump could press their leader with take-it-or-leave it
demands at Mar-a-Lago, and concluded that a deal should be locked
down before the two leaders met face to face.
In addition, the two sides have been negotiating the text in
English, creating a delay as language was translated into Chinese.
A further delay was caused by Mr. Liu's limited authority, forcing
him to seek approval of deal points from Mr. Xi and other senior
Communist party officials, those following the talks said.
"There should have been an agreed-upon Chinese text before Liu
He left Washington" in the last round of talks in late February,
said Michael Pillsbury, a China scholar at the Hudson Institute who
consults with the White House on trade.
Negotiators for China and the U.S. are still working to resolve
one of the most stubborn sticking points: how to ensure China makes
good on its promises to ease burdens on U.S. companies operating in
China.
Mr. Lighthizer has sketched out key provisions in Congressional
testimony, describing a protocol in which the two sides would hold
consultations on disputes, starting with lower-level officials. If
those officials can't resolve the problem, Messrs. Lighthizer and
Liu would get involved. If no agreement is reached, the U.S. could
impose tariffs, Mr. Lighthizer has said.
But he hasn't publicly discussed another U.S. priority -- that
China agree not to retaliate against U.S. tariffs imposed for
violations of the pact, at least in some circumstances. Beijing
hasn't approved that request.
Another big issue is the pace at which the two sides would
remove tariffs now in force. The U.S. wants to roll them back
slowly, after China reaches certain milestones. Beijing wants the
tariffs quickly lifted.
U.S. negotiators have divided the tariffs into two kinds. They
are more willing to roll back the 10% tariffs on $200 billion of
Chinese goods, which took effect in September as the U.S. tried to
put more pressure on China.
But they want to keep in place the 25% on $50 billion of Chinese
goods levied, in two stages, in July and August. Those tariffs was
meant to compensate the U.S. for what the White House calculated
was the harm to U.S. companies caused by China's forced technology
transfers.
The U.S. is also pressing China to ease its restrictions on
cross-border data flows, people familiar with the negotiations
said. Those talks include permitting U.S. companies to set up cloud
computing operations in China and market their services there,
rather than being limited to licensing technology to Chinese firms.
Negotiations on those subjects are moving slowly, the people
involved said.
Write to Bob Davis at bob.davis@wsj.com
(END) Dow Jones Newswires
March 19, 2019 16:43 ET (20:43 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.