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U.S. Treasury Secretary Steven Mnuchin leaves the G-20 Finance Ministers and Central Bank Governors' meeting at the IMF and World Bank's 2019 Annual Spring Meetings, in Washington, April 12, 2019. REUTERS/James Lawler Duggan

JAMES LAWLER DUGGAN/Reuters

U.S. Treasury Secretary Steven Mnuchin said on Saturday a U.S.-China trade agreement would go “way beyond” previous efforts to open China’s markets to U.S. companies and hoped that the two sides were “close to the final round” of negotiations.

Mnuchin, speaking to reporters on the sidelines of the International Monetary Fund and World Bank spring meetings, said that he and U.S. Trade Representative Robert Lighthizer would hold two calls next week with Chinese Vice Premier Liu He. The officials also were discussing whether more in-person meetings were necessary to conclude an agreement.

“I think we’re hopeful that we’re getting close to the final round of concluding issues,” Mnuchin said.

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As China and U.S. inch toward a trade deal, Canada gets a warning of potential harm

Beijing and Washington are seeking a deal to end a bitter trade war marked by tit-for-tat tariffs that have cost the world’s two largest economies billions of dollars, disrupted supply chains and rattled financial markets.

The United States is seeking sweeping changes to China’s economic and trade policies, including new protections for U.S. intellectual property, an end to forced technology transfers and cyber-theft of trade secrets. Washington also wants Beijing to curb industrial subsidies, open its economy wider to U.S. companies and increase purchases of American farm, energy and manufactured goods to shrink a $419 billion U.S. trade deficit with China.

Asked whether market openings in the agreement would go beyond what was contemplated in the 2016 Bilateral Investment Treaty negotiations, he replied:

“We are making progress, I want to be careful. This is not a public negotiation … this is a very, very detailed agreement covering issues that have never been dealt with before,” Mnuchin said. “This is way beyond anything that looked like a bilateral investment treaty.”

The BIT talks, pursued by former President Barack Obama’s administration, stalled as China refused to satisfy U.S. demands to open significant sectors of its economy to foreign investment. The talks were not taken up by the Trump administration, which pursued tariffs on Chinese goods instead, leading to the current talks.

Mnuchin said the two sides are negotiating an agreement with seven chapters that would be “the most significant change in the trading relationship in 40 years.”

He said the deal would have “real enforcement on both sides,” adding that the United States was open to being subjected to penalties if it failed to keep its commitments in the deal.

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“I would expect that the enforcement mechanism works in both directions, that we expect to honor our commitments, and if we don’t, there should be certain repercussions, and the same way in the other direction,” said the Treasury chief, who is playing a key role in the negotiations with China.

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