Agriculture Reference
In-Depth Information
China's commitments to WTO accession and provisions related
to agriculture
In their most basic terms, the commitments in the agricultural sector can
be classified into three categories: market access, domestic support and
export subsidies (Martin 2002; Colby 2001; Rozelle and Huang 2001). The
commtments on market accesson have lowered tarffs on all agrcultural
products, increased access to China's markets for foreign producers of some
commodities through tariff rate quotas (TRQs) and removed quantitative
restrictions on others. In return, China is supposed to gain better access
to foreign markets for its agricultural products, as well as a number of
other indirect benefits.
Its substantal market-access commtments make Chna's accesson
unque among developng countres that have been admtted to the WTO.
Overall, agricultural import tariffs (in terms of simple averages) declined
from about 21 per cent in 2001 to 17 per cent by 2004. Previously, the
smple average agrcultural mport tarff had been reduced from 42.2 per
cent in 1992 to 23.6 per cent in 1998.
With a few exceptions—for example, in the case of several 'national
strategic products'—most agricultural products have become part of a tariff-
only regime. According to this part of the agreement, all non-tariff barriers
and licensing and quota processes should be eliminated. For most commodities
in this group, effective protection fell substantially after January 2002 (Table
2.3). To the extent that tariffs are binding for some of these commodities,
the reductons n tarff rates should stmulate addtonal mports.
It is important to note, however, that although published tariff rates
have fallen on all of these commodities, imports will not necessarily grow.
Indeed, China has comparative advantage in many of the commodities in
Table 2.3. For example, lower tariffs on horticultural and meat products
might impact on only a small part of the domestic market—such as those
parts that buy and sell only very high-quality products, such as meats for
five-star hotels that cater to foreigners. Although tariffs have fallen for all
products, since China exports many commodities at below world market
prices, the reductions have not affected producers or traders.
The real challenge for agrcultural products wth tarff-only protecton
is, therefore, for commodities such as barley, wine and dairy products. To
