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Donald Trump said Beijing “broke the deal” by reneging on earlier commitments made during months of negotiations.

Larry Kudlow said that China needs to agree to “very strong” enforcement provisions for an eventual deal and the sticking point was Beijing’s reluctance to put into law changes that had been agreed upon. Paraphrased from CNBC

Trump's statement is confusing, as it would seem that you can't "break a deal" that hasn't yet been made... it would seem that the two parties are still negotiating.

But more to the point is: What law(s) does the US insist that China change?

  • It wouldn't be laws, per se, since there's no mutual legal authority over both countries. It'd be treaty obligations. That's just a terminology quibble, though. – Bobson May 13 at 21:16
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    In fact, China is simply copy US government behavior of "not practicing what you are preaching' . The "IP" argument is typical argument to help USA corporate to use legal and monopoly power to crush new competitors . Since China mirror every US Corporatism move and similar counter-movement , so it is funny to say it is "reneging". ;-) – mootmoot May 14 at 12:06
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TLDR: it looks like the disagreement/"renegation" hinges on what level China is going to change its approach to intellectual property. It seems China doesn't want to promise any law changes in the draft agement, insisting on lesser governmental instruments, like decrees.

And if may comment, yeah, this looks like a somewhat silly dispute (if indeed that's all there is to it), but recall that Trump publicly spanked Lighthizer for wanting a MoU instead of a Trade Agreement with China. So, with that in mind, form seems to matter quite a bit in these negotiations.


FWIW, here's a summary of the opposing positions on May 11:

US negotiators earlier accused Beijing of reneging on its commitments, reportedly refusing to change its laws to address US complaints of forced technology transfer, intellectual property theft and anti-competition policies.

But Mr Liu said China did not go back on its word; it only disagreed with the language in the draft agreement.

He also said the US had changed its mind on a sum agreed for Chinese purchases by US President Donald Trump and his counterpart Xi Jinping for Chinese purchases when the leaders met in Argentina last December.

Somewhat similarly, on same day:

Sources told Reuters this week that China had deleted its commitments in the draft agreement that said it would change laws to resolve core complaints of the United States: theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

And probably the most detailed (and recent) take on that, on May 13:

Until last week, there were expectations Mr Trump and Mr Xi would sign a trade deal at the summit. However, the trade talks suffered a major setback last week when China proposed extensive revisions to a draft agreement. Beijing wanted to delete prior commitments that Chinese laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.

Vice premier Liu He, China’s top economic adviser, sought to defend the changes in talks with senior US officials in Washington on Thursday and Friday, arguing that China could accomplish the policy changes through decrees issued by its state council, or cabinet, sources familiar with the talks said.

US trade representative Robert Lighthizer rejected that, telling Mr Liu that the United States was insisting on restoration of the previous text.

“We would like to see these corrections in an agreement which is codified by law in China, not just a State Council announcement. We need to see something much clearer. And until we do we have to keep our tariffs on,” Mr Kudlow said.

I think that insofar there are no more publicly known details beyond this level as to what the disagreement/"renegation" is about.

  • Is the Chinese press reporting Liu He's statements, or are the "sources familiar" the US negotiation team (perhaps a biased narrative)? – BobE May 14 at 1:02

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