WASHINGTON (Reuters) – U.S.-China trade talks are progressing well and the United States aims to sign an initial deal this month, top Trump administration officials said on Friday, offering reassurance to global markets after nearly 16 months of tit-for-tat tariffs.

FILE PHOTO: A U.S. dollar banknote featuring American founding father Benjamin Franklin and a China’s yuan banknote featuring late Chinese chairman Mao Zedong are seen among U.S. and Chinese flags in this illustration picture taken May 20, 2019. REUTERS/Jason Lee/Illustration

Beijing’s state-media Xinhua News Agency said the world’s two largest economies had reached “consensus on principles” during a serious and constructive telephone call on Friday between their main trade negotiators.

U.S. and Chinese negotiators had made “enormous progress” toward finalizing a “phase one” agreement, although the deal was not yet 100% complete, White House economic adviser Larry Kudlow told reporters on Friday.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin made progress on a variety of issues during their call with China’s Vice Premier Liu He, and were working to resolve outstanding issues, USTR said in a statement.

It said discussions would continue at the deputy level.

Kudlow and Commerce Secretary Wilbur Ross spoke in upbeat terms about movement toward finalizing the agreement in separate interviews on Friday.

“I’m quite optimistic,” Kudlow told Fox Business Network as the trade talks were underway.

“The deal is not completed, but we made enormous progress. We’re beyond where we were last spring, so I’m going to play that from the optimistic side,” he later told reporters.

U.S. officials have said the two sides were close to an agreement in May, but talks faltered when China backtracked on commitments to change its laws to resolve core U.S. complaints about theft of intellectual property, forced technology transfers and other practices.

For now, Kudlow said planned U.S. tariffs on Chinese-made laptops, toys and other goods that are due to go into effect on Dec. 15 would remain on the table. He said the decision on whether they would go ahead would be made by President Donald Trump.

Washington still hoped to sign the deal this month, said Kudlow, despite Chile’s withdrawal as host of the Asia Pacific Economic Cooperation summit, where Trump and Chinese President Xi Jinping had been expected to ink the agreement.

“We’re looking for a venue,” he said. “We’d love the timing to be similar, but it will all be determined.”

Agreements on agriculture, financial services and currency were nearly completed, and there had been “excellent progress” on intellectual property theft issues, Kudlow said, although some additional work remained on that topic.

He said the thorny issue of technology transfer to China would likely be pushed back to a second phase trade deal. Negotiators were also due to discuss enforcement and dispute resolution during Friday’s call, he said.

Kudlow told reporters the agreement covered Chinese purchases of U.S. farm products, and other steps to open up its market to agricultural goods.

In financial services, the agreement would “give 100 percent ownership to American companies in China,” Kudlow said, citing insurers, security firms, and investment and commercial banks.

A Chinese ministry website also showed that China plans to let foreign-funded firms raise money via stock and bond issuance both in China and overseas, and to let them freely repatriate profits, as part of its moves to encourage foreign investment.

The Ministry of Justice published the draft rule, designed to facilitate a foreign investment law that would take effect on Jan. 1 next year, on its website.

Reporting by Makini Brice, Andrea Shalal, Susan Heavey, Doina Chiacu, Lisa Lambert and Tim Ahmann in Washington, with additional reporting by Stephanie Nebehay in Geneva; Writing by Andrea Shalal; Editing by Mark Heinrich and Rosalba O’Brien

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