U.S.-China trade talks resume next week, focus on intellectual property

By Jeff Mason

WASHINGTON (Reuters) - U.S. negotiators are preparing to press China next week on longstanding demands that it reform how it treats American companies' intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports.

A new round of trade talks begins in Beijing on Monday, after the most recent set of negotiations concluded in Washington last week without a deal and with the top U.S. negotiator declaring that a lot more work needed to be done.

A White House official said on Friday that preparations were under way and the talks would continue to focus on pressing Beijing to make structural reforms.

The White House announced a timeframe for the Beijing talks in a statement. It said lower-level officials will kick off the meetings on Monday, led on the American side by Deputy U.S. Trade Representative Jeffrey Gerrish.

Higher principal-level talks will take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

Lighthizer, named by Trump to spearhead the process after agreeing a 90-day truce in the trade war with Beijing, has been a strong proponent of pushing China to make such reforms and end what the United States views as unfair trade practices including stealing intellectual property and forcing U.S. companies to share their technology with Chinese firms.

China has denied it engages in such practices.

"The United States is a great producer of technology, and innovation, and know-how, and trade secrets. And we have to operate in an environment where those things are protected," Lighthizer said last week after talks at the White House.

"I'm by no means predicting success; there is a lot of work that has to be done," he said.

The two sides are trying to hammer out a deal ahead of the March 1 deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

China's Commerce Ministry said in a statement on Saturday that the two countries would have a "further deep discussion on issues of mutual concern" on the basis of what they talked about at the last round of talks in Washington. It gave no details.

China's ambassador to the United States, Cui Tiankai, said in Michigan on Friday that a "zero-sum game" mindset was destructive to China-U.S. ties, the state-run news agency Xinhua reported.

Chinese and U.S. companies should compete as well as cooperate with each other, Cui said.

"The real story in business is not that black and white," the report quoted him as saying.

Trump said on Thursday he did not plan to meet with Chinese President Xi Jinping before that deadline, dampening hopes that a trade pact could be reached quickly.

"We are hearing the list of issues the two presidents will ultimately have to make decisions on is being narrowed, so that's an indication that things are being addressed. But we're also hearing that there's a lot of work to be done," said Erin Ennis, senior vice president of the US-China Business Council, who says she has spoken with officials in both the United States and China. "I don't think either side is expecting a draft of something next week."

Another source who had been briefed on the talks said a lot of work also needed to be done on an enforcement mechanism for a potential deal.

"If there's some indication that they're making progress on subsidies, forced tech transfer and the constellation of issues there and an enforcement mechanism, that would be interesting. The word coming out of this last round was that there was very limited, measly progress on those issues," the source said.

Escalating tensions between the United States and China have cost both countries billions of dollars and roiled global financial markets.

If the negotiations do not progress sufficiently, the U.S. officials said increased tariffs will take effect.

Washington could agree to extend the deadline without a deal if talks are progressing. Trump said last week he did not think the deadline would need to be extended, though he said a deal might not be on paper by then.

(Reporting by Jeff Mason; additional reporting by Chris Prentice and David Lawder in Washington and Ben Blanchard in Beijing; editing by David Gregorio/Sonya Hepinstall/Alexander Smith)