Agriculture Reference
In-Depth Information
Such behaviour has, however, been constrained for a class of
commodtes called 'natonal strategc products'. Chna's WTO agreement
allows the government to manage the trade of rice, wheat, maize, edible
oils, sugar, cotton and wool with TRQs. These commodities are covered
under special arrangements. As shown in Table 2.4, the in-quota tariff
is only 1 per cent for rice, wheat, maize and wool (for sugar it is 20 per
cent and for edible oils, 9 per cent). The amount brought in at these tariff
levels is, however, strictly restricted. For example, in 2002, the first 8.45
mmt of wheat came n at a tarff rate of 1 per cent. The n-quota volumes
were to grow over a three-year period (2002-04) at annual rates ranging
from 4 per cent to 19 per cent. For example, maize TRQ volumes increased
from 5.7 mmt n 2002 to 7.2 mmt n 2004. Chna does not have to brng
in this quantity, but provisions are in place such that there is supposed to
be competton n the mport market so that f there s demand for the
national strategic products at international prices, traders will be able to
bring in the commodity up to the TRQ level.
At the same time, there are still ways, theoretically, to import these
commodities after the TRQ is filled. Tariffs on out-of-quota sales (that is,
more than 7.2 mmt in 2004 for maize) dropped substantially in the first year
of accesson and fell further between 2002 and 2005. If the nternatonal prce
of maize were to fall more than 65 per cent below China's price after 2004,
traders would be allowed to import. During the transition period, however,
the tariff rates were so high (for example, 65 per cent for grains and sugar
in 2004 and edible oils in 2005) that in 2002-05 they were not binding.
After the first four to five years of accession, other changes will take
place. For example, China agreed to phase out its TRQ for edible oils after
2006. State wool-tradng monopoles could also be phased out and dsappear
gradually for most other agrcultural products (Table 2.4). Although the
China National Cereals, Oil and Foodstuffs Import and Export Company will
continue to play an important role in rice, wheat and maize, it will face
increasing competition in grains trading from private firms.
In its accession commitments, China made a number of other agreements,
some of which are China-specific. First, China must phase out all export
subsdes and not ntroduce any such subsdes on agrcultural products n
the future. Moreover, despite clearly being a developing country, China's
de minimis exemption for product-specific support is equivalent to only 8.5
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