China backtracked on nearly all aspects of U.S. trade deal -sources

Credit: Reuters Studio
Published on May 8, 2019 - Duration: 02:08s

China backtracked on nearly all aspects of U.S. trade deal -sources

Sources told Reuters a Chinese draft of a potential U.S. trade deal removed binding legal language that American officials viewed as essential to reaching an agreement between the world's two largest economies.

Zachary Goelman reports.

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China backtracked on nearly all aspects of U.S. trade deal -sources

China last week sent the U.S. a draft trade proposal that shocked American negotiators.

According to U.S. government sources, the text was riddled with edits and reversals that threatened to blow up months of talks between the world's two largest economies.

The text arrived Friday.

On Sunday, President Donald Trump tweeted a threat to hike tariffs on $200 billion worth of Chinese goods.

One private-sector source familiar with the trade talks told Reuters, “China reneged on a dozen things, if not more ... The talks were so bad that the real surprise is that it took Trump until Sunday to blow up.” In each of the seven chapters of the draft trade deal, China had deleted its commitments to change its own laws.

The U.S. had demanded those changes to address what it called the theft of U.S. intellectual property, to reform China's competition policy, and to end currency manipulation.

The stripping of binding legal language from the draft struck directly at the highest priority of U.S. Trade Representative Robert Lighthizer.

(SOUNDBITE) (English) U.S. TRADE REPRESENTATIVE, ROBERT LIGHTHIZER, SAYING (FEBRUARY 27, 2019): "We can compete with anyone in the world, but we must have rules, enforced rules that makes sure market outcomes, not state capitalism and technology theft, determine winners.

President Trump has for years recognized this very serious and I would say, existential problem.

And he is determined to take action to defend our workers, farmers and ranchers and our economic system.

Lighthizer views changes to Chinese laws as essential to verifying compliance after years of what U.S. officials have called empty reform promises.

Spokespeople for the White House, the U.S. Trade Representative and the U.S. Treasury Department did not immediately respond to requests for comment.

Chinese Foreign Ministry spokesman Geng Shuang told a briefing on Wednesday that working out disagreements over trade was a “process of negotiation” and that China was not “avoiding problems”.

The sudden deterioration in U.S.-China trade talks sent markets tumbling this week.

China’s Vice Premier Liu He is set to arrive in Washington on Thursday for two days of negotiations that just last week were widely seen as a possible last round before a historic trade deal.

Now, sources say U.S. officials have little hope that Liu will come bearing any offer that can get talks back on track.

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