China rushes to seal trade deal ahead of Trump's deadline

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Reuters reported exclusively on Wednesday that both sides were drafting memorandums of understanding (MOUs) on cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.

On Friday, Trump said he did not like MOUs because they are short-term in nature, and he wanted a long-term deal.

An industry source briefed on the talks said both sides have narrowed their differences on intellectual property rights, market access and narrowing a nearly $400 billion U.S. trade deficit with China. But bigger differences remain on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft.

There is no agreement on the enforcement mechanism, either. The United States wants a strong mechanism to ensure the Chinese reform commitments are followed through, while Beijing insists upon what it calls a “fair and objective” process.

“Enforcement is a difficult puzzle,” said the source, who requested anonymity to speak candidly about the talks. “You need objective arbitrators to make a decision.”

It was not clear whether Saturday’s talks managed to iron out those differences. Neither side shared the details of the day’s discussions. Trump said the biggest decisions could be reached when he meets with Xi, probably in Florida next month, and that they may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE.

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