President Donald Trump’s chief trade negotiator said Tuesday that he is making progress resolving the toughest remaining issues in trade talks with China and will know “before too long” whether a deal is possible.
“Our hope is that we are in the final weeks” of negotiations, U.S. Trade Representative Robert Lighthizer told the Senate Finance Committee.
The president has spoken publicly of hosting a “signing summit” for Chinese President Xi Jinping at his Mar-a-Lago Florida estate later this month, a goal that now appears likely to slip into next month at the soonest.
Lighthizer said it remained unclear whether final gaps between the two sides could be closed.
“We’re working more or less continuously,” he said. “I’ll be on the phone again with them tomorrow.”
Lighthizer outlined a multipart agreement that will likely exceed 110 pages and address U.S. complaints about fundamental elements of China’s state-led economic system as well as pry open Chinese markets for American manufacturers, farmers and ranchers.
Chinese subsidies for favored industries, which results in excess production spilling over into global markets, will be among the disruptive practices targeted.
“These real structural issues have to be addressed and in our negotiations they are being addressed,” he said. “We are making headway.”
Any agreement must curb China’s requirement that foreign companies surrender technology secrets to their Chinese joint venture partners before doing business in China and also protect U.S. intellectual property, Lighthizer said.
U.S. negotiators are insisting on establishing an enforcement mechanism with up to 18 meetings annually between Chinese and U.S. officials to discuss complaints lodged by American companies. In the event that diplomacy fails to resolve the problems, the U.S. wants the right to unilaterally impose trade penalties on China, Lighthizer said.
“We have to have real progress and we have to maintain the right to raise tariffs when there are violations of the agreement,” he said.
Lighthizer spoke one day after Senate Minority Leader Charles Schumer accused the president of rushing into a “weak” deal with the Chinese.
“It is abundantly clear that China is playing us,” Schumer said on the Senate floor.
More than two weeks after Trump and Treasury Secretary Steven Mnuchin said the U.S. and China had reached agreement on a currency provision in the trade talks, Lighthizer said the two sides remained only “pretty close” to such a deal.
If finalized, the currency provision would prevent Beijing from manipulating the yuan’s value to gain a trading advantage.
“We don’t have an agreement with China. Nothing’s really done until everything’s done,” he said.
Lighthizer spoke during testimony on the administration’s call for changes in the World Trade Organization.
“The WTO has significant deficiencies. It has migrated from a negotiating forum to a litigation forum,” he said.
The Geneva-based organization has failed to keep pace with the growing importance of nonmarket economies such as China, he said. Under WTO rules, once-poor-and-now-prosperous countries like China, South Korea and Saudi Arabia can escape some WTO rules by self-identifying as a “developing nation,” he said.
Reform will be difficult because the WTO operates by consensus and countries benefiting from the self-designation provision will not agree to surrender it, said Lighthizer, who added, apparently in jest, that some had suggested that the U.S. should erase the unequal treatment by also identifying as “developing.”
The administration also wants changes in the global trading body’s system for resolving disputes between members. The administration is blocking new appointments to the WTO’s appellate body, accusing it of judicial overreach and chronic delays in reaching decisions.
The seven-member appellate body hears appeals of decisions by expert panels, the first stage of the WTO dispute settlement process.
Only three of the seven appellate body seats are occupied, the minimum needed to function. In December, due to scheduled retirements, the appellate body will be down to a single member and thus immobilized.