US, China say they are ‘close to finalising’ part of a Phase One trade deal

Monday, 28 October 2019 00:30 - - {{hitsCtrl.values.hits}}

US President Donald Trump poses for a photo with China’s President Xi Jinping before their bilateral meeting during the G20 leaders summit in Osaka, Japan, 29 June - Reuters/File photo:

WASHINGTON (Reuters): US and Chinese officials are “close to finalising” some parts of a trade agreement after high-level telephone discussions on Friday, the US Trade Representative’s office and China’s Commerce Ministry said, with talks to continue.

The USTR provided no details on the areas of progress.

“They made headway on specific issues and the two sides are close to finalising some sections of the agreement. Discussions will go on continuously at the deputy level, and the principals will have another call in the near future,” a statement said.

Washington and Beijing are working to agree on the text for a ‘Phase 1’ trade agreement announced by US President Donald Trump on 11 October. Trump has said he hopes to sign the deal with China’s President Xi Jinping next month at a summit in Chile.

In a separate statement posted on China’s Ministry of Commerce website on Saturday morning, Beijing confirmed “technical consultations” on some parts of a trade agreement were basically completed.

Agricultural products are a major area of discussion.

China’s Commerce Ministry said both sides confirmed the US will import Chinese-made cooked poultry and catfish products, while China will lift a ban on US poultry.

Beijing wants the US to cancel some existing US tariffs on Chinese imports, people briefed on the Friday call told Reuters, in return for pledging to step up its purchases of US commodities like soybeans.

The US wants Beijing to commit to buying these products at a specific time and price, while Chinese buyers would like the discretion to buy based on market conditions.

The world’s two largest economies are trying to calm a nearly 16-month trade war that is roiling financial markets, disrupting supply chains and slowing global economic growth.

“They want to make a deal very badly,” Trump told reporters at the White House on Friday. “They’re going to be buying much more farm products than anybody thought possible.”

Trump agreed earlier this month to cancel an 15 October increase in tariffs on $ 250 billion in Chinese goods as part of a tentative agreement on agricultural purchases, increased access to China’s financial services markets, improved protections for intellectual property rights and a currency pact.

White House advisers are hoping to cement a binding, enforceable agreement with Beijing, including a pledge not to force US companies to transfer technology to Chinese companies to do business there.

Beijing was expected to ask Washington during Friday’s call to drop its plan to impose tariffs on $ 156 billion worth of Chinese goods, including cell phones, laptop computers and toys, on 15 December, two US-based sources told Reuters.

Beijing is also seeking removal of 15% tariffs imposed on 1 September on about $ 125 billion of Chinese goods, one of the sources said. Trump imposed the tariffs in August after a failed round of talks. “The Chinese want to get back to tariffs on just the original $ 250 billion in goods,” the source said.