Agriculture Reference
In-Depth Information
Following the signing of the bilateral agreement on 15 November 1999,
the Chna Trade Relatons Workng Group under the US government released
a document that specified the contents of China's commitments including
for the agricultural sector. It specifically mentioned that the upper limit of
Chna's agrcultural subsdy would be determned n the phase of multlateral
negotiation in Geneva. Agreement on this issue was finally reached in June
2001. On the basis of the information currently available, the agricultural
commtments made by Chna wth respect to WTO accesson manly cover
three aspects: tariff binding and tariff reduction, a tariff rate quota system
and reducton of market dstorton measures.
Tarff binding and tariff reduction,
Chna commts to establsh a 'tarff-only' mport regme; all non-tarff barrers
will be eventually eliminated. Any other measures, such as inspection, testing,
and domestc taxes must be appled n a manner consstent wth WTO rules on
a transparent and non-dscrmnatory bases and all health measures must be
based on sound scence. The tarff on agrcultural products wll be reduced
from an overall average of 22 per cent to 17.5 per cent, while the average duty
on agricultural products of priority interests to the US will fall from 31 per
cent to 14 per cent. Table 3.1 details the specific tariff reduction commitments
for major agrcultural products and the tme path over whch they wll be
phased in. For example, the tariff on imported fresh cheese will be reduced
from the current level of 50 per cent to 12 per cent. The tarff reducton wll
be phased in by 2004 (the final year for implementation of Uruguay Round
agreements for development countres) n equal annual nstalments.
Tarff rate quota system
Chna wll replace ts agrcultural mport quota and lcensng system wth a
tariff rate quota (TRQ) system. The TRQ system has been widely adopted
by WTO members n respect to some senstve bulk agrcultural products.
The system s charactersed by a two-tered dscontnued tarff rate dvded
by a benchmark quantty of quota. Imports of a gven product wthn quota
are subject to very low dutes whereas mports above the quota face very
high, usually prohibitive, duties.
