China Warns U.S. That Trade Deal Enforcement Must Be ‘Two-Way’

(Bloomberg) -- The enforcement mechanism for a prospective deal to end the trade war between China and the U.S. must be “two way, fair and equal,” according to Vice Commerce Minister Wang Shouwen.

Speaking Saturday at a press conference in Beijing, Wang said he “feels hopeful” about the prospects for the negotiations, which are nearing completion amid pressure from U.S. President Donald Trump to seal a deal. Wang is China’s deputy international trade representative and also leads the Chinese working team in the trade talks with the U.S.

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While U.S. negotiators led by Trade Representative Robert Lighthizer have insisted on a mechanism -- that could include a regular schedule of meetings -- to enforce the terms of their agreement, that prospect has raised alarm in Beijing. Former high ranking officials have said that the deal will be seen as lopsided unless it also binds the U.S. to address China’s own grievances.

The U.S. and Chinese leaders agreed in December to work toward removing all additional tariffs, Wang said, adding that they’ve made substantial progress in the talks since then. He didn’t elaborate further on the enforcement mechanism or respond to a question on whether he expects that a deal can be signed this month.

Few details of the possible deal so far have been revealed. Beijing seems ready to buy more American agricultural products, but the two sides are still haggling over more important structural issues, such as state subsidies, market access and forced technology transfers.

Chicken & Hamburgers

Chinese officials have made clear in a series of negotiations with the U.S. in recent weeks that removing levies on $200 billion of Chinese goods quickly was necessary to finalize any deal, according to people familiar with the discussions. But the U.S. wants to continue to wield the threat of tariffs as leverage to ensure China won’t renege on the deal, and only lift the duties fully when Beijing implemented all parts of the agreement.

As a sign of the earnestness of talks, Wang detailed a lunch-time session at the last round of negotiations in Washington. The two sides decided to order take-out food in order to keep talks going. Chinese Vice Premier Liu He dined on a hamburger while his counterpart, Lighthizer, ate a Chinese dish of chicken with eggplant. Coffee and tea were served.

"But they did not drink coffee or tea, both drank water," said Wang. "That’s what we call finding common ground."

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