Forgot password?
Sign up today and your first download is free.

This Week In Trade

Trump suggests U.S., China 'ahead of schedule' on trade deal, 'probably' will sign soon

Posted: October 28, 2019

The U.S. and China “probably” will sign a “phase one” trade deal soon, President Trump said on Monday, asserting that the two sides were “ahead of schedule” after reports of progress last week.

In Geneva, meanwhile, the countries are headed for arbitration in a World Trade Organization dispute over U.S. countervailing duties that dates to the Obama administration -- but is yet another flashpoint in the wider trade battle.

Speaking to reporters on Monday morning, Trump was asked if the U.S. and China were on pace to sign an agreement next month at the Asia-Pacific Economic Cooperation summit in Santiago, Chile. “We are looking probably to be ahead of schedule to sign a very big portion of the China deal,” he replied. “And we'll call it 'phase one,' but it's a very big portion. That would take care of the farmers. It would take care of some of the other things. It'll also take care of a lot of the banking needs.”

Trump said the sides were “a little bit ahead of schedule, maybe a lot ahead of schedule. Probably, we'll sign it. I imagine the meeting is scheduled for Chile.”

The president alluded to “some difficulties, right now, in Chile,” which is undergoing economic upheavals that have sparked sometimes-violent protests. “But I know the people of Chile and I'm sure they'll be able to work it out.”

The Trump administration reported progress in key areas in its talks with China after a high-level phone call on Friday, saying the sides were close to finishing “some sections” of an initial deal. “Discussions will go on continuously at the deputy level, and the principals will have another call in the near future,” the Office of the U.S. Trade Representative said in a statement.

U.S. and Chinese trade officials are trying to prepare some kind of deal focused on agricultural purchases, intellectual property, forced technology transfers, currency and financial services -- a deal that could be signed by Trump and Chinese President Xi Jinping in Chile next month. In the balance on the U.S. side are decisions about existing and future tariffs on Chinese goods.

China, meanwhile, took to state media to offer some specifics, saying agreements were reached on cooked poultry from China and “a quality supervision system for catfish products,” the South China Morning Post reported, citing Xinhua. Also reported in the mix: China will lift restrictions on U.S. poultry, and discuss a “public health information system for meat products.”

In Geneva on Monday, the U.S. took the expected step of denying China's request for $2.4 billion in retaliation for U.S. CVDs on a range of goods in a case brought by China in 2012. That sends the case to an arbiter to decide a final amount.

  • A host of analysts on Tuesday will discuss the U.S.-China relationship at the Brookings Institution in Washington, DC. Brookings and the Vrije Universiteit Brussel-Asan Institute will hold a conference titled “Trans-Atlantic and trans-Pacific dialogue: Alliances at crossroads,” which it says will delve into issues such as “alliances in the age of America First” and “Alliances in the new normal of U.S.-China rivalry.”
  • Also on Tuesday, the Center for Strategic and International Studies will hold a hold a discussion on “Managing the Risk of Tech Transfer to China.” Deputy Assistant Commerce Secretary for Export Administration Matthew Borman is expected to speak, as are Michael Brown, director of the Defense Department's Defense Innovation Unit; Assistant Treasury Secretary for Investment Security Thomas Feddo; David Hanke, a partner at Arent Fox LLP; and James Lewis, director of the CSIS Technology Policy Program.

'A few more meetings' on USMCA?

Trump was also asked on Monday about the fate of the U.S.-Mexico-Canada Agreement, which he said was ready to go and would pass with bipartisan support if House Speaker Nancy Pelosi (D-CA) brought it to the floor. “I have no idea what they're doing with it,” he said of the Democrats and USMCA. “I can't imagine it takes this long.”

Trump repeated his claims that the Democrats were too focused on impeachment to get USMCA done, but Pelosi, in Iowa on Saturday, reiterated her belief that the party was on a “path to yes” on the deal.

Democrats late last week reported progress in their talks with the administration, saying “line-by-line” revisions were in progress and that only “a few more meetings” would be needed to finish the work. “We have really narrowed down our differences -- considerably,” House Ways & Means Chairman Richard Neal (D-MA) said after another meeting between the Democrats' working group and USTR Robert Lighthizer. “We have gotten a lot of issues off of the table where we have agreed not to revisit.”

AFL-CIO President Richard Trumka, however, made clear last week that all was not well, saying Mexico's funding plan for labor reforms called for in USMCA -- a major issue for U.S. labor groups and many Democrats -- was akin to “voodoo economics.”

Talks between USTR and House Democrats will continue this week, with the working group expected to sit down again with Lighthizer on Tuesday.

  • On Wednesday, Rep. Bill Pascrell (D-NJ) will hold a “labor briefing” on USMCA that will also feature Benjamin Davis, United Steelworkers' director of international affairs; Cathy Feingold, director of the international department of AFL-CIO; and, possibly, other lawmakers.

All eyes on Europe

Across the Atlantic, the fate of the United Kingdom's plan to exit the European Union remains in limbo. British Prime Minister Boris Johnson on Monday will ask Parliament to support a general election for Dec. 12 to break the Brexit impasse. The opposition Labour Party has so far said it will not support calling a new election, which means the measure is likely to fail.

European leaders this week are poised to extend the deadline for the United Kingdom to leave the bloc from Oct. 31 to Jan. 31, according to reports -- a move Johnson was forced to request after lawmakers took steps to prevent a no-deal exit. The UK Parliament has supported Johnson's withdrawal deal in initial votes, but not an accelerated timeline to enact implementing legislation. A three-month delay could provide the prime minister with the time needed to get the deal through Parliament.

At stake for the U.S. is a trade deal the UK can't begin negotiating until the Brexit situation is sorted out. Both sides have said they want to move quickly on a deal after the UK is free of the EU.

A new European Commission had been slated to take over on Nov. 1, but the transfer of power now appears to be delayed by a month.

More events

On tap this week:

  • On Tuesday and Wednesday, the House Finance Services Committee marks up the “
  • The U.S. Chamber of Commerce's Global Innovation Policy Center on Tuesday will hold its seventh “Intellectual Property Champions Gala,” themed “Creating the Next Frontier,” to “highlight the role intellectual property plays in stimulating innovation and creativity.”
  • On Wednesday, Washington International Trade Association holds a discussion on the Committee on Foreign Investment in the United States, export controls and “the Information and Communications Technology (ICT) Supply Chain Executive Order.” Speakers will include David Fagan of Covington & Burling LLP; Chris Padilla, vice president of government and regulatory affairs at IBM; Jonathan Samford, senior vice president for external affairs at the Organization for International Investment; John Miller, senior vice president of policy and senior counsel at the Information Technology Industry Council; and Denise Zheng, vice president of the Business Roundtable.
  • Everything You Always Wanted to Know About Digital Trade, but Didn't Get a Chance to Ask” is the title of a Thursday discussion hosted by the George Washington University Elliott School of International Affairs. Former U.S. International Trade Commission Chairman Meredith Broadbent, now the international business chair at the Center for Strategic and International Studies, will speak along with Matthew Reisman, international trade director at Microsoft; Rachael Stelly, policy counsel at the Computer and Communications Industry Association; Burcu Kilic, director of the Public Citizen Digital Rights Program; and Susan Aaronson, research professor and director of the George Washington University Digital Trade and Data Governance Hub.
  • On Friday, the Elliott School will tackle “The World Economic Outlook” in an event featuring Gian Maria Milesi-Ferretti, deputy director of the International Monetary Fund's research department; Natalija Novta and Cian Ruane, economists in the same department; Ryan Nunn of Brookings; Danny Leipziger, managing director of Growth Dialogue; and James Foster, director of the GWU Institute for International Economic Policy. -- Dan Dupont (ddupont@iwpnews.com)