Agriculture Reference
In-Depth Information
According to official Chinese sources, SPS and TBT actions have resulted
n huge drect losses for agrcultural exports. The ndrect losses are even
larger. In 2001, about US$7 billion worth of Chinese exports were affected
by SPS and TBT actions. In early 2002, the EU banned imports of Chinese
animal-derived food, seafood and aquatic products, resulting in a 70 per
cent slump n Chna's aquatc product exports durng the second half of
that year (MOFCOM 2005). Also, according to an investigation by China's
Ministry of Commerce (MOFCOM), in 2002 about 90 per cent of China's
exporters of foodstuffs, domestic produce, and animal by-products were
affected by foregn TBTs and suffered losses totallng US$9 bllon (
China
Daily
2003).
Although the WTO's SPS Agreement requres members to ensure that
SPS measures are based on sufficient scientific evidence, there are some
well-founded concerns that countres may abuse SPS measures and use them
as trade barriers. Because of very low production and labour costs, some
agrcultural products exported from Chna are very compettve n world
markets. Consequently, importing countries may look to restrict imports
from Chna by settng relatvely hgh standards or strct nspectons n order
to protect domestc markets.
Conclusions
Entry into the WTO has boosted China's agricultural trade, especially its
agrcultural mports. The pattern of Chna's agrcultural trade appears
consistent with its resource endowments. Following entry into the WTO,
changes n the pattern of agrcultural trade ndcate that Chna s movng
closer to ts comparatve advantage.
Chna has a comparatve advantage n labour-ntensve agrcultural
products and a comparatve dsadvantage n land-ntensve agrcultural
products. Since entry into the WTO, its comparative advantage in labour-
intensive agricultural products has been declining, especially in animal
and horticultural products, and China's agriculture as a whole has lost
comparatve advantage snce 2004.
Fast economic growth and the associated structural changes have
played significant roles in driving the changes in comparative advantage
