WASHINGTON (Reuters) – The United States and China have begun to make a fundamental commitment to the most complex issues in their trade disputes, noting the most important progress that has been made before the end of the seven-month trade warfare, report sources familiar with the negotiations.
FILE PHOTOS: US Treasury Secretary Stephen Mnuchin, second to the left, US Trade Representative Robert Laighthier, third from left to left, and Chinese Vice Premier and Leading Trade negotiator Liu He, second to the right, refer to a photo before the opening of the session trade negotiations at the State Dormition Day "Dayoyouth" in Beijing on Thursday, February 14, 2019. Mark Shifelbein / Pool via REUTERS
Two of the world's largest economies have expanded their tariffs by hundreds of billions of dollars in goods, slowing down the pace. global economic growth, distortion of supply chains and breach of production.
As officials hold high-level talks on Thursday and Friday in Washington, they remain far from one another on the instructions of the US administration, Donald Trump, on structural changes in China's economy.
But from the talks a widespread perception of what can make an agreement begins, sources inform, as both sides seek to reach an agreement by March 1. and Chinese President Xi Jinping agreed when they met in Argentina at the end of last year.
The negotiators make six memoranda of understanding on structural issues: compulsory transfer of technologies and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, according to two sources familiar with the course of negotiations .
At meetings between American and Chinese officials last week in Beijing, both sides exchanged text and worked on the presentation of obligations on paper, reports one source.
The process has become a genuine trade talks, said the source, so that at the end of the week, the participants believed staying in Beijing to continue working. Instead, they agreed to take a few days off and reunite in Washington.
Sources asked for anonymity to speak frankly about the talks.
USE OF LETTERS IN
Memoranda of Understanding cover the most complex issues affecting trade relations between the two countries and aim, from the point of view of the United States, to discontinue the practice that led to the fact that Trump began to levy duties on Chinese import championship.
One source warned that negotiations could fail. But work on the Memorandum of Understanding was an important step in China's signing of both broad principles and specific commitments on key issues, he said.
The United States accuses Beijing of forcing American companies to do business in China to share technology with their local partners and transfer intellectual property secrets. China denies its involvement in such practices.
Trump administration officials also object to non-tariff barriers in China, including industrial subsidies, regulation, business licensing procedures, product standards reviews, and other practices that they say keep US goods from China or give an unfair advantage domestic firms.
US Finance Secretary Stephen Mnucin urged China to open financial services markets for more foreign firms, including giants of Visa and MasterCard credit cards that have been waiting for China for years to fulfill their promise to work there.
Regarding the currency, US officials, including Munchin, warned China against devaluation of their yuan to gain a competitive edge after the Chinese currency weakened considerably against the dollar last year, partly opposed to Trump's tariffs.
Both sides discussed the mechanism for implementing the agreement, the source said. Last month, Reuters reported that the United States insisted on a regular review of China's progress in discussing trade reforms and could resume tariffs if it considered that Beijing had breached the deal.
The parties also considered a list of 10 points that China could reduce its trade surplus with the United States, including through the purchase of agricultural products, energy and commodities, such as semiconductors, according to two other sources familiar with the negotiations. .
MAIN MADE 1 deadline to resolve the dispute or see US $ 200 billion Chinese goods grow from 10 percent to 25 percent. Trump said on Tuesday that he believes China has an incentive to move quickly.
"I think they are trying to move quickly so that it does not happen," he told reporters in the Oval office, not excluding the possibility of extending the term.
Undersecretary officials held a round of talks in Washington DC on Tuesday and Wednesday. They will be joined by high-level negotiators on Thursday, under the guidance of US Trade Representative Robert Lightgizer and Chinese Vice-President, Liu He.
Report by Jeff Mason; Additional reporting by Michael Martin of Beijing and David Lauderd at WASHINGTON; Editing: Simon Webb and Sonya Hepstain