APEC finance ministers express 'moderate' hope over US-China trade deal

Chile's finance minister, Felipe Larrain, pictured in Mexico in 2018, says a US-China trade deal would be highly significant (AFP Photo/ALFREDO ESTRELLA)

Santiago (AFP) - APEC finance ministers expressed "moderate optimism" on Tuesday that the United States and China will end their trade war and sign an agreement during the forum's summit in Santiago next month.

For the last 18 months the world's two largest economies have been embroiled in a trade spat that saw tariffs placed on hundreds of billions of dollars' worth of goods.

US President Donald Trump announced a partial deal last week.

Treasury Secretary Steven Mnuchin added on Monday that US and Chinese officials would hold phone talks over the next two weeks to finalize the "phase one" trade deal.

Finance ministers and representatives of the Asia-Pacific Economic Cooperation (APEC) forum met in Santiago on Tuesday and discussed the possibility of a full trade deal being signed next month.

Chile's finance minister, Felipe Larrain, said such an agreement would be "highly significant."

While he was somewhat optimistic, he also he warned that "planning and good intentions and the idea to sign it are one thing. Actually signing it is another."

"Hence, in some there's this natural dose of scepticism."

Few specifics of the deal are known except that it covers intellectual property, financial services and currencies. Washington has also scrapped tariff increases planned for this week and could do so with others scheduled for December.

New Zealand's finance minister Grant Robertson warned against getting carried away, though.

"We also have to acknowledge that there is some way to go before this is fully resolved, but it is important for the whole world that this trade war is ended," he said.

The finance ministers are due to issue a joint statement backing free trade at the end of their meeting.

APEC is an inter-governmental forum made up of 21 economies that promotes free trade throughout the Asia-Pacific region.

Those economies make up 40 percent of the world's population, 60 percent of its gross domestic product and 50 percent of total trade, according to the Chile summit organizers.

The International Monetary Fund on Tuesday said the US-China trade war alone is estimated to shrink the world economy by 0.8 percent in 2020, but a truce would reduce that impact.

Policymakers should work to find resolutions to trade disputes, the IMF urged.