U.S., Chinese trade deputy talks to start on Thursday

WASHINGTON (Reuters) – Deputy-level U.S.-China trade talks are scheduled to start in Washington on Thursday, the U.S. Trade Representative’s office said, paving the way for high-level talks in October aimed at resolving a bitter, 14-month trade war.

A USTR spokesman did not offer any further details about the deputy-level talks.

Earlier on Monday, U.S. Chamber of Commerce Chief Executive Tom Donohue said U.S. Trade Representative Robert Lighthizer told business executives he was seeking a “real agreement” that addresses intellectual property and technology transfer issues first raised by the USTR two years ago.

Donohue, speaking at a news conference to urge congressional approval of the U.S.-Mexico-Canada trade agreement, said Lighthizer “did indicate that there was some movement in the direction of purchasing of (U.S.) agricultural products and other issues”.

But Lighthizer gave no indication if the talks may produce an interim deal with a more limited scope, as suggested by some media reports, Donohue said.

The head of the biggest U.S. business lobbying group added it would be difficult to secure an agreement fully addressing U.S. demands for sweeping changes to China’s intellectual property and technology transfer practices, market access and subsidy issues.

“While I’m optimistic about it, I’m also a dead-ass realist and this is not a simple problem,” Donohue said of the new round of talks.

Leading the Chinese delegation in the deputy-level talks will be Vice Finance Minister Liao Min, its commerce ministry said on Tuesday.

Lighthizer and U.S. Treasury Secretary Steven Mnuchin are expected to meet with China’s top trade negotiator, Vice Premier Liu He, in early October.

PAVING THE WAY

Deputy-level talks to Washington in the past have been led by Chinese Vice Commerce Minister Wang Shouwen.

Liao Min, unlike Wang, does not have a specific remit covering trade and market access issues, but would have sufficient expertise at this point in the trade war, said James Green, a senior adviser at McLarty Associates and a former USTR official.

“He’s a problem solver, and so I can see him looking to make some progress,” Green said.

“In the broad scheme of things, the line-up doesn’t matter too much. They are taking messages back and have a short leash anyway,” he said.

President Donald Trump last week delayed a tariff increase that had been scheduled for Oct. 1 on $250 billion worth of Chinese goods, after China delayed tariffs on some U.S. imports.

The world’s two largest economies have not held in-person talks since late July toward resolving the escalating trade war, which has roiled financial markets, disrupted supply chains and threatened global growth.

Economic factors are weighing on both sides, said Stephen Kho, former acting chief counsel on China enforcement at USTR who is now a partner at Akin Gump law firm.

“Both sides are feeling the pain now. So an interim deal could be done, but if they’re looking for a comprehensive deal … that will be very hard,” Kho said.