China significantly edits trade deal with US ahead of talks
Sources say systematic changes to nearly 150-page document could blow up months of negotiations
WASHINGTON/BEIJING The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world's two largest economies, according to three US government sources and three private sector sources briefed on the talks.
The document was riddled with reversals by China that undermined core US demands, the sources told Reuters.
In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war.
US President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion worth of Chinese goods from 10 to 25 per cent tomorrow- timed to land in the middle of a scheduled visit by China's Vice-Premier Liu He to Washington to continue trade talks.
COMPLIANCE
The stripping of binding legal language from the draft struck directly at the highest priority of US Trade Representative Robert Lighthizer - who views changes to Chinese laws as essential to verifying compliance after years of what US officials have called empty reform promises.
Mr Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions - such as those imposed on North Korea or Iran - than a typical trade deal.
Chinese Foreign Ministry spokesman Geng Shuang told a briefing yesterday that working out disagreements over trade was a "process of negotiation" and that China was not "avoiding problems".
Mr Lighthizer and US Treasury Secretary Steven Mnuchin were taken aback at the extent of the changes in the draft. The two cabinet officials on Monday told reporters that Chinese backtracking had prompted Mr Trump's tariff order but did not provide details on the depth and breadth of the revisions.
Mr Liu last week told Mr Lighthizer and Mr Mnuchin that they needed to trust China to fulfil its pledges through administrative and regulatory changes, two of the sources said.
Both Mr Mnuchin and Mr Lighthizer considered that unacceptable, given China's history of failing to fulfil reform pledges.
One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because "China got greedy".
"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," the source said.
"After 20 years of having their way with the US, China still appears to be miscalculating with this administration."
- REUTERS
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