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Ron Kirk, a former U.S. trade representative in the Obama administration, told CNBC on Wednesday he agrees with the Trump administration that there should be “an enforceable mechanism that will hold China‘s feet to the fire” on any deal reached.
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“One of the difficulties is, absent a formal trade agreement with China, which we don’t have, historically we’ve had to rely on the [World Trade Organization] to enforce these,” Kirk said on “Closing Bell.” “But I think the administration in this case is correct to say, ‘We want more than just a commitment. We want an enforceable mechanism that will hold China’s feet to the fire and allow the United States to put in place punitive measures if they don’t do that.'”
Then again, Kirk said, China may be unsure whether the Trump administration can be believed or not. For example, he said President Donald Trump’s threats to close the U.S.-Mexico border and his previous threats on tearing up a trade deal with Mexico and Canada make it “difficult for our trading partners to know when to take him seriously.”
On Wednesday, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer held a ninth round of negotiations with Chinese Vice-Premier Liu He in Washington. It followed talks last week in Beijing between the two sides.
Kirk said he’s seeing encouraging signs of progress in the high-level economic and trade talks between the world’s two largest economies to resolve trade differences.
“Regrettably, this president has a penchant for making these grand pronouncements about success, only for us to later find out that the substance doesn’t match the reality,” said Kirk. “But I am encouraged that we’ve now had three successive levels of talks at a very high level.”
Added Kirk: “Our experience, anytime the vice premier [of China] shows up, he has the authority to make a deal. And the fact that the two sides continue to talk — and if it is in fact true we are down to the level of making sure the language and the translation is in fact representative of what the parties have agreed on — we could be closer to a resolution than not.”
The continued talks follow China posting its slowest growth last year in nearly 30 years. The Asian nation has been hurt by a slump in demand due to hefty tariffs imposed by the Trump administration.
Earlier Wednesday, White House economic advisor Larry Kudlow told reporters at D.C.-area event that numerous issues were still being discussed in the bilateral negotiations.
“We’re covering issues that have never really been covered before,” Kudlow said. “All on the table. All making good progress. All making good headway. But we’re not there yet. We’re not there yet, and we hope this week to get closer.”