A U.S.-China trade deal is far from completion and will require much more work, particularly on enforcement, the U.S. official negotiating the pact told a House panel Wednesday.
“Much still needs to be done before an agreement can be reached,” U.S. Trade Representative Robert Lighthizer said. “If we can complete this effort, and again I say if, and can reach a satisfactory solution to the issue of enforceability … we might have an agreement that turns the corner in our economic relationship with China.”
President Donald Trump held out hope earlier this week that an agreement could be reached when he said “substantial progress” had been made after negotiations that went through the weekend. Trump also announced that he would postpone a scheduled March 2 increase in tariffs on $200 billion of Chinese imports, from 10 percent to 25 percent.
But Lighthizer’s testimony suggested the two sides are still far apart. The trade representative also said the administration is pushing for structural changes in China, including an end to cyber theft of U.S. commercial secrets, limits on state support for Chinese companies, and an end to the forced transfer of technology from U.S. companies as a condition of accessing China’s markets.
At stake, Lighthizer said, is whether the United States or China will dominate the industries of the future. “The U.S. has the best technology in the world,” he said. “It’s probably our single biggest competitive advantage and why we’ll be No. 1 for a long time if we protect our intellectual property.”
China, he said, “knows full well that it’s the key. Technology is what’s going to determine who rules the future.”
China has previously offered to make major purchases of U.S. goods, such as soybeans and natural gas, in an effort to resolve the conflict that followed the administration’s imposition of tariffs on Chinese products.
But Lighthizer said such steps wouldn’t be enough.
“The issues on the table are too serious to be resolved with promises of additional purchases,” he said. “We need new rules.”
Lighthizer also said it will be critical to have tough enforcement provisions in any agreement because China has typically not kept its past promises.
“I can point to many examples” of China’s government signing onto an agreement, “and in very few cases have they actually kept their obligations,” he said.
Members of Congress from both parties were supportive of Lighthizer’s efforts and expressed approval of the Trump administration’s confrontational approach.
Lighthizer “has time and again developed a vision that many of us on this committee will support vigorously,” said Rep. Richard Neal, Democrat from Massachusetts and chairman of the House Ways and Means Committee.
But Neal also urged the administration to reach a broad deal that would address the structural barriers U.S. companies face in trying to access China’s market.
The administration “must hold out for a good deal, a structural deal,” Neal said.
Lighthizer also urged Congress to pass the regional trade pact he negotiated last year: the U.S.-Mexico-Canada Agreement, or USMCA, which is meant to replace the North American Free Trade Agreement and which encourages companies to expand manufacturing in the United States.
“If USMCA doesn’t pass it would be a catastrophe across the country,” Lighthizer said. If Congress rejects the deal, he said, it would cost the U.S. the credibility it needs to negotiate additional trade agreements. The Trump administration is pursuing trade pacts with Japan and the European Union.
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