China could buy US farm products, open up electronic payments in bid to extend trade war truce, sources say
China is expected to sharply boost purchases of US agricultural products and open its electronic payment market to Visa and MasterCard as part of commitments aimed at extending a trade war truce, a source familiar with the talks said.
Trump met Liu in the White House's Oval Office on Friday as trade officials moved towards a framework for a deal to wrap up the intensive high-stakes negotiations. Negotiating teams from both countries have worked around the clock to frame a deal to extend the trade war truce past the March 1 deadline set in Buenos Aires in December.
The US has threatened to raise its punitive tariffs on US$200 billion worth of Chinese products from 10 per cent to 25 per cent starting on March 1 if no significant deal is brokered by then.
Observers said progress has been made but questions still hover over structural reforms, such as policies that exclude foreign firms from China's domestic markets, and an enforcement mechanism for ensuring that Beijing delivers on its commitment to those reforms.
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"We welcome, of course, the encouraging messaging on the negotiations", said the US Chamber of Commerce's Myron Brilliant, who is in close contact with US negotiators " including US Trade Representative Robert Lighthizer " and recently met with senior Chinese officials in Beijing.
"But from our perspective there are gaps that do remain in these talks, particularly around structural issues such as forced technology transfer, digital trade, and data flows," said Brilliant, who is the lobbying group's head of international affairs and executive vice-president.
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He told reporters that he expected both sides to agree to hold off on a hike in tariffs on US$200 billion of Chinese imports originally scheduled to take effect on March 1.
Brilliant also expressed concern that Beijing was seeking to postpone the question of enforcement " the mechanisms through which the US will verify that China is following through on promised changes " until after a deal has been struck.
"We heard from the Chinese [officials] in Beijing that part of this could be done through further dialogue", he said. "That's not what we're looking for. We're looking for more certainty in the agreement itself."
Both sides are working on an outline of a memorandum of understanding (MOU) focused on the structural issues, which also include forced technology transfers, cybertheft, market access and currency management.
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A memorandum of understanding would be the most significant breakthrough so far in the trade war that the Trump administration launched in July. The MOU is expected to lay the groundwork for a final resolution in the dispute, culminating in a face-to-face meeting between Trump and Chinese President Xi Jinping.
Access to China's electronic payments market for Visa and MasterCard was one of the most specific points in a 10-point agreement of "quick wins" that the US government struck with Beijing after Trump's first summit with Xi when they met at Trump's Florida estate, Mar-a-Lago, in April 2017.
Opening up the electronic payment market to US firms has been an issue for years. The US filed a case to the World Trade Organization in 2010 over China's discriminative treatment of US payment card companies. WTO ruled against China in 2012, but Beijing has not taken action.
This article originally appeared on the South China Morning Post (SCMP).
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