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China-US trade deal: Enforcement mechanism is key

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WASHINGTON US and Chinese officials say a historic deal ending their ongoing trade war could be imminent, but a key question is how can Washington be sure Beijing will live up to its end of the bargain?

With up to 100 Chinese officials reportedly expected next week in Washington, with the possibility of unveiling a grand agreement after months of tensions, that question is hanging over the talks.

Beijing may make eye-popping offers to buy American energy and agriculture exports as a means of cutting the soaring US-China trade deficit - US$378.7 billion (S$515.20 billion) in 2018 - including services trade), but all eyes will be on whether the agreement has any teeth.

US Vice President Mike Pence said on Friday the enforcement mechanism would be key to the decision on whether to remove the punishing US tariffs which now cover more than US$250 billion in Chinese imports.

"The reason enforcement has become central to this negotiation is the long history of China not living up to the spirit of the commitments it has made in the WTO and in bilateral negotiations with the US and other countries," Mr Edward Alden, a trade expert at the Council on Foreign Relations, told AFP.

US President Donald Trump has repeatedly accused China of stealing from the US by buying less from America than it sells.

But Mr Trump has also demanded structural changes to the Chinese economy, including an end to forced transfer of US technology, theft of intellectual property and the massive role the Chinese government plays in markets and industry.

US Trade Representative Robert Lighthizer, who is leading the US delegation along with Treasury Secretary Steven Mnuchin, has insisted Washington will not accept empty promises and will demand verification Beijing is keeping its word.

Reaching trade agreements with China can be especially challenging, given that its regulations are not transparent, Mr Alden said.

"China can change its laws in ways that please the United States, but then use regulatory tools to thwart implementation."

To ensure strict compliance, US negotiators have proposed monthly, quarterly and semi-annual meetings, with the twice-yearly meetings to involving the most senior officials.

And should American businesses report violations of the agreement, Washington could begin a series of consultations with their Chinese counterparts, and then unilaterally impose new tariffs if no resolution is achieved, according to US media reports.

But China also would have recourse to the same tariff tool in case of a US violation.

"The enforcement mechanism is crucial to the agreement," Mr Doug Barry, spokesman for the US-China Business Council, told AFP.

"Without a credible, time specific, verifiable means to hold parties accountable, we will miss an opportunity to put the trade relationship on a new and better footing." - AFP