U.S. Trade Representative Robert Lighthizer testified before the House Ways & Means Committee on Wednesday saying that the United States and China are making “real progress” on a trade deal but that there was still work to be done.

The U.S. is pushing for a trade deal with China that includes “significant structural changes” to China’s economic model, as well as provisions that ensure Beijing keeps its promises.

“It is still too early to predict the outcome” of negotiations between Washington and Beijing and whether China will concede to U.S. demands,” Lighthizer said.  He also indicated that plans are underway for President Trump to invite Xi Jinping for a summit to possibly finalize a potential agreement.

Lighthizer’s remarks before the Ways & Means Committee followed President Trump’s delay last week of planned increases in tariffs on China goods.

On Thursday, The Office of the U.S. Trade Representative (USTR) published a Federal Register notice  postponing the scheduled tariff increase on certain Chinese imports until further notice.  In September 2018, USTR announced it was imposing a 10 percent tariff on roughly $200 billion of Chinese products. The tariffs were then scheduled to automatically increase to 25 percent from 10 percent on January 1, 2019.

President Donald Trump and Chinese President Xi Jinping then met last fall at the G20 Summit in Argentina and agreed to suspend any additional duty increases until March 2, 2019, to negotiate a new trade deal.

The notice published Thursday did not specify a new deadline for potential tariff increases, simply stating that the action is suspended “until further notice.”

Asked if there would be a single deal solving all problems with China, Lighthizer indicated that he was not “foolish” enough to think there would be just one negotiation.

Lighthizer told lawmakers that the United States is demanding, among other things, that China stop forcing American companies to give intellectual property to Chinese partners, and that additional purchases of U.S. goods was simply not enough for a deal.  The issues on the table between the U.S. and China “are too serious to be resolved with promises of additional purchases,” Lighthizer said.   “We need new rules,” he said.

“Striking a broad trade agreement with China will not be a one-off event,” said Lighthizer.  The plan is for lower-level officials to meet on a monthly basis, while there will be quarterly meetings between mid-ranking officials and semi-annual exchanges between ministers.  “If there is disagreement at my level then the United States would expect to act proportionally but unilaterally to insist on enforcement,” the trade chief said, likely referring to tariff action, among other measures.

“If we can complete this effort, and again I say “if,” and can reach a satisfactory solution to the all-important outstanding issue of enforceability as well as some other concerns, we might be able to have an agreement that turns the corner in our economic relations with China,” Lighthizer said.  “Much still needs to be done, both before an agreement is reached, and more importantly after it is reached.”

The United States is “very aware of the history of our trading relationship with China, and the disappointments that have resulted from promises that were not kept,” Lighthizer said.

 

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