The long-distance trade negotiators from China and the US appear to be entering the home straight after marathon talks. Photo: iStock

In 490 BC, the Greek messenger Pheidippides raced from the victorious battlefield of Marathon to Athens, a distance of slightly more than 26 miles. His mission was to tell the Athenians of a glorious victory and the destruction of the Persian Army.

Since then, the word marathon has become associated with endurance and patience.

Crucial traits for the long-distance negotiators in search of a peace deal to end the year-long trade war between China and the United States.

Later this week, another round of talks will take place in Beijing as US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin ramp up their shuttle diplomacy with Vice-Premier Liu He’s Chinese team.

Nothing can be taken for granted.

Key issues still remain, revolving around intellectual property rights, forced technology transfer and non-tariff barriers. But, perhaps the biggest sticking point involves an “enforcement mechanism.”

“An effective enforcement mechanism will define the deal,” Tim Stratford, the chairman of the American Chamber of Commerce in China, or AmCham, was quoted as saying.

But while the fallout from the trade conflict has stunted global growth and caused anxiety in old guard organizations such as the International Monetary Fund and the World Bank, Mnuchin has expressed confidence in hammering out a deal.

“We’re getting into the final laps,” he said in an interview at the Milken Institute Global Conference in Los Angeles during the weekend. “I think both sides have a desire to reach an agreement.”

Theft by stealth

Major progress has been made in key areas such as IP rights and the theft by stealth of US technology by Chinese companies.

Beijing has also promised to open up a raft of sectors to foreign firms and speed up its reform timetable as outlined by President Xi Jinping last week.

Yet, significantly, there has been no mention of China’s business model, which tends to favor state-owned companies, particularly in the high-tech sector.

It will be interesting to see if that stumbling block is eventually covered in the proposed final trade accord.

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But, perhaps, the biggest conundrum will be how Washington enforces a potential deal. The White House has made it clear it will not relax all the tariffs on Chinese imports worth US$250 billion.

The plan is to do that in stages.

Moreover, other issues remain such as the controversial Cybersecurity Law, which has teeth the size of a saber-tooth tiger and a bite to match.

Overseas companies from tech firms to banks will have to keep their network data in the world’s second-largest economy if they want to do business there. This involves sourcing servers, routers, equipment and products from Chinese suppliers.

“Significantly, the businesses affected by the Cybersecurity Law are not limited to those in the information technology (IT) industry. The Law has wide influence over all enterprises that employ networks or information systems in their operations,” Leo Zhao, a senior counsel, and Lulu Xia, a business consultant, with Grapevine Asia, a boutique consultancy specializing in risk management, wrote in a commentary for China Briefing.

“According to related articles of the Law, enterprises may roughly be categorized into ‘network operators’ and ‘Critical Information Infrastructure (CII) Operators’ based on the enterprises’ types and their business scopes,” they added.

Areas of concern

Liu’s negotiating team have shown signs that they are prepared to discuss certain areas of concern, but there has hardly been a mention of the “Made in China 2025” technology program or the Belt and Road Initiative.

Earlier this month, Mnuchin revealed that the two sides had agreed on establishing new “enforcement offices” to police a trade pact without going into further details.

Again, Beijing’s state-subsidies policy was conspicuous by its absence.

Yet, whatever happens, the Sino-US rivalry will continue to flare up in the months and years ahead.

“Chinese leaders fear – not without reason – that such a confrontation might cut off its access to US markets and lead US allies to band together against China rather than stay neutral, stripping it of important economic partnerships and valuable diplomatic connections,” Yan Xuetong, the dean of the Institute of International Relations at Tsinghua University, said in his seminal paper, The Age of Uneasy Peace.

“As a result, caution, not assertiveness or aggressiveness, will be the order of the day in Beijing’s foreign policy in the coming years,” he added.

Before then, Liu will head back to Washington early next month after the Beijing discussions end this week.

Hopes are still high that an agreement can be reached in May with a summit signing ceremony between US President Donald Trump and Xi by June at the latest.

Still, as this marathon heads for a climax, the last few miles will challenge the patience of both sides in this Pheidippides-style endurance race.

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