March 12, 2019 / 2:53 PM / 13 days ago

Deal or no deal, U.S.-China trade talks may finish in weeks: Lighthizer

WASHINGTON (Reuters) - The United States and China may be in the final weeks of discussions to hammer out a deal to ease their tit-for-tat tariffs dispute, U.S. Trade Representative Robert Lighthizer said on Tuesday.

FILE PHOTO: Chinese staffers adjust U.S. and Chinese flags before the opening session of trade negotiations between U.S. and Chinese trade representatives at the Diaoyutai State Guesthouse in Beijing, Thursday, Feb. 14, 2019. Mark Schiefelbein/Pool via REUTERS/File Photo

Washington and Beijing have slapped import duties on each other’s products that have cost the world’s two largest economies billions of dollars, roiled markets and disrupted manufacturing and supply chains.

The U.S. government is pressing for an end to practices and policies it argues have given Chinese firms unfair advantages, including subsidizing of industry, limits on access for foreign companies and alleged theft of intellectual property.

“Our hope is we are in the final weeks of having an agreement,” Lighthizer, the top U.S. trade official, said during a U.S. Senate Finance Committee hearing on Tuesday, though he cautioned that major issues remained.

“If those issues are not resolved in favor of the United States, we won’t have a deal.”

Lawmakers pressed Lighthizer for details on whether the Trump administration intends to keep its tariffs in place to ensure China is complying with any agreement.

“The focus of the negotiation from the Chinese side is the removing” of the U.S. tariffs, Lighthizer said. “If that is a concession, that is something that is under debate.”

The United States is addressing structural issues over intellectual property rights “with precision” in the talks and is nearing a deal to address currency manipulation, he added.

Progress in negotiations last month drove the White House to indefinitely delay hiking tariffs on $200 billion worth of Chinese imports that were set to kick in on March 2. That led to mounting expectations a deal was in the offing, though Trump administration officials said on Friday another face-to-face meeting was not yet scheduled.

Lighthizer and China’s top trade negotiator, Liu He, spoke on Tuesday, China’s state media reported, and the U.S. trade representative said during the Senate hearing that he had another call scheduled on Wednesday.

“We are working more or less continuously,” Lighthizer said.

TARIFFS, TRADE TALKS AND THE WTO

The U.S. trade representative said the United States is working towards a solution to eliminate tariffs on steel and aluminum from Canada and Mexico. Washington had cited national security reasons for the tariffs.

But they have complicated the Trump administration’s effort to push through final ratification of the U.S.-Mexico-Canada trade deal agreed last year. That accord is a reworked version of the 1994 North American Free Trade Agreement.

The United States is working toward a deal that would eliminate the steel and aluminum levies and give Canada and Mexico access to the U.S. market while maintaining benefits of the tariff program, Lighthizer said, highlighting quotas as a way to do that.

Reworking NAFTA was one of the key objectives of U.S. President Donald Trump, who had attacked the trilateral agreement as destructive for the U.S. economy and its workforce, particularly in the manufacturing sector.

Trump has vowed to rebalance the global trading system in favor of the United States as part of his “America First” policy. As well as pushing for major changes from China and reworking NAFTA, Trump has kicked off negotiations on trade with the European Union, Japan and Britain.

Lighthizer said the United States is at a “complete stalemate” with EU negotiators over agricultural access.

“We are working on other areas with the realization that there is not going to be any (trade agreement) without agriculture,” Lighthizer said.

While U.S. officials have said agriculture must be included in any deal, the EU has said it will not support a comprehensive deal that includes the sector.

Lighthizer also defended the Trump administration’s actions to pressure other countries for reforms of the World Trade Organization, saying at the hearing that the United States is working “diligently” to negotiate new rules for the world body to keep the organization “relevant to a rapidly changing world.”

The Trump administration said earlier this month the United States would not allow the international body to dictate trade policy and defended the use of tariffs to pressure trade partners.

U.S. officials have argued for years that WTO judges have routinely exceeded their mandates, imposing new obligations on members.

Reporting by David Lawder, Humeyra Pamuk and Alexandra Alper in Washington; Writing by Chris Prentice; Editing by Simon Webb and Paul Simao

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