MNI POLICY: Ex-USTR Officials See Momentum In China Trade

-- Optimism Remains Despite Slide In Expectations For Summit Date

By Evan Ryser

     NEW YORK (MNI) - With the United States and China agreeing to roll back

tariffs on each others' goods contingent on a phase one deal, former U.S. Trade

Representatives see strong momentum going forward with expectations for a phase

one deal and beyond. 

     "I think the news suggests that they have everything in place for a phase

one deal with a phased stage-out of tariffs in maybe a one, two, or three stage

process, depending on the commitments made," Welles Orr, a former assistant U.S.

Trade Representative, told MNI.

     "I am optimistic that this thing is really coming together," Orr said. 

     "The tariffs I think will come off," Orr said, referencing comments from

Chinese officials, whilst he suggested a phase one deal may include a provision

to lock in further talks going forward. 

     The Chinese commerce ministry said Thursday the two countries had agreed to

cancel the tariffs in phases contingent on reaching a deal, while noting no

timetable was yet agreed. A U.S. official confirmed the planned rollback as part

of a phase one deal that President Donald Trump and President Xi Jinping are

aiming to sign. 

     Amy Celico, a former senior director for China affairs at the Office of the

U.S. Trade Representative, said "I believe that the U.S. government wants phase

one to be followed absolutely by phase two. Ambassador Lighthizer has been

absolutely consistent throughout the process. He believes a comprehensive deal

is the only way to have a deal."

     "I don't think the U.S. government is being disingenuous in saying this is

the start of a process," Celico said after an event at the Council on Foreign

Relations. 

     --SIGNING

     The United States and China continue to hunt for a replacement venue to

complete negotiations and sign a deal after Chile cancelled the mid-November

APEC summit. Optimism remains over the talks despite expectations that a summit

could slide into December and possibly January.  

     "I am not that worried about that," Celico said when asked if choosing a

venue would cause complications. "It's hard. Scheduling is very difficult and so

we are seeing that November is really not likely to happen."

     Celico said she continues to see positive signs. "I think both sides want

something to happen and so they are being quite flexible to the challenges. Both

sides seem equally committed to finding a venue." 

     "It could bleed into January," Celico said. 

     Scheduled December 15 tariffs on about $156 billion worth of Chinese

imports, including cell phones, toys, and laptop computers linger over the

discussions, with the Chinese pushing for their cancellation. 

     Orr, however, said he expected the two could be linked in which a phase one

deal could potentially retroactively lift December 15 tariffs if a summit were

to slid late into December or into early 2020.  

     "I think the administration must have a win in the trade front and this

would be meaningful, and it would continue to help the markets, especially as

the USMCA seems to be slipping possibly into 2020," Orr said.  

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

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