UPDATE 1-U.S. ag sales to China will 'take some time to scale up' -Mnuchin - Reuters

Posted: 30 Oct 2019 10:40 AM PDT

(New throughout, adds comments from interview, details on summit cancellation)

By David Lawder

RIYADH, Oct 30 (Reuters) - U.S. Treasury Secretary Steven Mnuchin said on Wednesday that it will take time for Chinese purchases of U.S. agricultural goods to "scale up" to the $40 billion to $50 billion annual level touted by President Donald Trump if the two sides can seal a "Phase 1" trade deal.

Mnuchin told Reuters in an interview in Saudi Arabia that the $40 billion to $50 billion target is "a lot," but is based on "very specific discussions" of product purchase commitments by China.

"This is built on a bottom-up basis of both what we think we can deliver and what they think they need," Mnuchin said on the sidelines of the Future Investment Initiative conference in Riyadh. "It's a one-year target, but obviously it's going to take some time to scale up."

The $40 billion-$50 billion target is twice the amount of farm goods the United States exported to China in 2017, the last year unaffected by dueling tariffs of the nearly 16-month trade war between the world's two largest economies.

Some people briefed on the talks have said they expect the Phase 1 deal to start with China's agriculture purchases to simply resume at the pre-trade war rates.

China has increased some purchases of soybeans and pork in recent weeks but these remain far below previous levels with soybean imports coming mostly from Brazil and Argentina.

SIGNING VENUE GONE

Mnuchin said U.S. and Chinese negotiators were working to try to agree on a text in time for Trump and Chinese President Xi Jinping to sign in the coming weeks.

Their goal had been to sign the deal in mid-November at an Asia Pacific Economic Cooperation Summit in Santiago, Chile. But Chilean President Sebastian Pinera canceled that summit on Wednesday due to worsening protests in the country.

"We've obviously just seen the news and we're considering options," a Treasury official said after the interview.

Mnuchin said he does not anticipate he and U.S. Trade Representative Robert Lighthizer would take another trip to Beijing to try to nail down the text, as phone calls have been productive and will continue.

The Treasury Secretary is in the Middle East and India through early next week and Lighthizer is holding frequent meetings with U.S. lawmakers to secure approval of the U.S.-Mexico-Canada trade deal.

CHINA MARKET OPENING PLEDGES

Mnuchin said he "appreciated" comments on Tuesday by China's vice Commerce Minister, Wang Shouwen, that China will eliminate foreign investment restrictions on financial services and many other sectors.

Wang also said that China would "neither explicitly nor implicitly" force foreign investors and companies to transfer technologies to Chinese firms, addressing a major U.S. concern. .

"We are encouraged by his comments and that's consistent with our agreement," Mnuchin said. "We've been talking a lot about forced technology transfer and we appreciate those comments."

Mnuchin also dismissed suggestions that the new access for U.S. firms to China's financial services market in the Phase 1 agreement would be similar to that contemplated in the Bilateral Investment Treaty (BIT) negotiations conducted by the Obama administration as late as 2016.

"This is a brand new agreement," he said. The BIT "wasn't a starting point, that wasn't anything that we really paid any attention to," he added. (Reporting by David Lawder; editing by Jonathan Oatis and David Gregorio)

Our Standards:The Thomson Reuters Trust Principles.

Pentagon releases first images from US mission that led to ISIS leader's death - CNBC

Posted: 30 Oct 2019 03:28 PM PDT

The compound occupied by ISIS leader Abu Bakr al-Baghdadi.

Department of Defense

WASHINGTON — The Pentagon on Wednesday released the first images and videos of last week's U.S. military mission that led to the death of ISIS leader Abu Bakr al-Baghdadi.

"The operation was exquisitely planned and executed," Marine Corps Gen. Ken McKenzie, commander of U.S. Central Command, said during a press briefing at the Pentagon.

"We are under no illusions that ISIS is going to go away because we killed Baghdadi. It will remain," said McKenzie, who oversaw the mission. "They will be dangerous, and we suspect that they will try some form of retribution attack, and we are postured and prepared for that."

Similarly, Secretary of Defense Mark Esper said Monday at the Pentagon that Baghdadi's death would send a forceful message to terrorists.

"Baghdadi's death will not rid the world of terrorism or end the ongoing conflict in Syria, but it will certainly send a message to those who question America's resolve and provide a warning to terrorists who think they can hide," Esper said.

McKenzie also offered an update on the dog injured in the mission, saying that the animal was exposed to live electrical cables but has since returned to duty. The dog, whose name and breed are classified, is a four-year veteran of the canine Special Operations Command program and has served 50 combat missions.

On Sunday, President Donald Trump confirmed Baghdadi's death and identified Syria's oil as a U.S. national security priority. Trump also highlighted a potential U.S. energy market opportunity by tapping into Syrian oil.

"What I intend to do, perhaps, is make a deal with an ExxonMobil or one of our great companies to go in there and do it properly ... and spread out the wealth," Trump said, adding that U.S. troops would be tasked with retaining control of the oil facilities.

"We're keeping the oil," Trump reiterated. "Remember that. I've always said that, 'Keep the oil.' We want to keep the oil," he said, adding that the oil could produce a value of $45 million a month.

The Pentagon emphasized Monday that U.S. troops will secure oil fields in northeast Syria in the wake of al-Baghdadi's death.

"At the height of Baghdadi's reign, these oil fields provided ISIS with the bulk of financial resources used to fund its terror," Esper said Monday. "U.S. troops will remain positioned in this strategic area to deny ISIS access to those vital resources, and we will respond with overwhelming military force against any group that threatens the safety of our forces there," he added.

"The fundamental purpose of securing those oil fields is to deny those oil fields access to ISIS in order to prevent ISIS from resurgence," Chairman of the Joint Chiefs Gen. Mark Milley said alongside Esper.

What's more, the latest revelation comes as the Trump administration works to withdraw the U.S. military presence from war-torn Syria.

Last year, Trump went through a similar debate over whether to withdraw U.S. troops from Afghanistan, ultimately agreeing to keep them there but only after repeatedly raising questions about why they should stay.

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