US-China trade talks to resume next week, eyeing to clinch 'phase one' deal during November forum

High-level trade talks between China and the US will resume next week as the two sides aim to finalise a "phase one" agreement during an upcoming regional leaders forum next month, US Treasury Secretary Steven Mnuchin said on Monday.

Mnuchin and US Trade Representative Robert Lighthizer plan to have a phone call with Chinese Vice-Premier Liu He next week, following deputy-level calls this week and then further face-to-face meetings on that level.

The meetings are meant to prepare for US President Donald Trump and his Chinese counterpart Xi Jinping to sign an agreement at the Asia-Pacific Economic Cooperation summit in Chile next month.

"The next phase is there is deputy level calls that will be going on this week," Mnuchin said in an interview on CNBC. "Ambassador Lighthizer and myself will have a principal level call next week with the vice-premier."

US President Donald Trump listens to US Treasury Secretary Steven Mnuchin speak during a media conference on trade talks with China's Vice-Premier Liu He in the Oval Office of the White House. Photo: EPA-EFE alt=US President Donald Trump listens to US Treasury Secretary Steven Mnuchin speak during a media conference on trade talks with China's Vice-Premier Liu He in the Oval Office of the White House. Photo: EPA-EFE

"My expectation is we'll have the deputies meet between now and Chile, and my expectations are that we will be meeting with the-vice premier in Chile before the presidents meet to finish the deal," he added.

Trump said on Friday that the two nations reached a "very substantial phase one deal" after two days of meetings between Mnuchin, Lighthizer and Liu in which the US would suspend a 5 percentage point tariff increase on Chinese imports scheduled for Tuesday, and China would buy more US agricultural goods.

China's state news agency Xinhua cited "substantive progress" in the negotiations aimed at ending the 15-month bilateral trade war.

Mnunchin said he expected "short-term scaling" up on purchases of agricultural products, valued between US$40 billion and US$50 billion, to meet the Trump administration's expectations. "There is some scaling up to get to that given the amounts," Mnuchin said. "And, again, short-term scaling."

China Shipping containers at the Port of Los Angeles in California. Enforcement of any trade deal Washington might strike with Beijing is a central issue for lawmakers in both US political parties. Photo: AFP alt=China Shipping containers at the Port of Los Angeles in California. Enforcement of any trade deal Washington might strike with Beijing is a central issue for lawmakers in both US political parties. Photo: AFP

The Treasury secretary declined to explain how much authority China would have in a dispute resolution mechanism that would be part of the interim trade deal, one of the sticking points that caused a breakdown in talks earlier this year.

Asked whether the US will have unilateral authority to determine whether China was upholding whatever trade deal is struck or whether Beijing will "have a seat at the table" within the mechanism, Mnuchin said: "I'm not going to go through it, but what I will assure you is that it will have an enforcement mechanism that we can enforce and we're comfortable with."

Enforcement of any trade deal Washington might strike with Beijing is one of the key issues many lawmakers in both US political parties have seized upon in their criticism of China.

For example, Florida Senator Rick Scott, a Republican who has supported Trump on many issues, issued a statement harshly critical of China shortly after Mnuchin's interview.

"While it's positive the United States is working towards a deal that would require Communist China to buy more US agriculture products, let's remember: Communist China never lives up to the bargain," Scott said.

US Senator Rick Scott, a Republican who has supported Donald Trump on many issues, echoed critics' claims that Beijing has been deceptive in making agreements. Photo: Reuters alt=US Senator Rick Scott, a Republican who has supported Donald Trump on many issues, echoed critics' claims that Beijing has been deceptive in making agreements. Photo: Reuters

Echoing complaints from other lawmakers, Scott referenced other areas in which critics have claimed that Beijing has either been deceptive or has not kept its commitments.

Beijing is "militarising the South China Sea, even after they promised President Obama they wouldn't, and breaking the agreement to give Hong Kong autonomy and freedom", Scott said.

"Earlier this year, Communist China agreed to buy more US soy beans, but we haven't seen that happen."

When asked in the CNBC interview about Beijing's hard-line reaction to a comment about Hong Kong pro-democracy demonstrators by an NBA general manager, which has threatened the sports league's future in China, Mnuchin said the resolution would need to be left to the NBA and China.

"You're dealing with issues of people at the companies ... the NBA itself," Mnuchin said. "It has processes in China, and this is up for them to work out."

Pressed further on whether the NBA controversy shows that the American constitutional right to free speech is at risk for US companies operating in the country, Mnuchin said: "As it relates to the overall political system, obviously they have a very different political system than we do."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.