The U.S. – China WTO Accession
A Strong Deal in the Best Interests of U.S.
February 9, 2000
China’s Entry To The World Trade
Organization Will Slash Barriers To The Sale Of American Agricultural Products
In The World’s Most Populous Country. China’s entry into the WTO will
dramatically cut import barriers currently imposed on American agricultural
products. This agreement locks in and expands our access to a market of over one
billion people. China’s economy is already among the world’s largest and
over the past 20 years has expanded at a phenomenal rate of nearly 10 percent
per year. During this period, U.S. total exports to China have grown from
negligible levels to about $14 billion a year. Agricultural exports in fiscal
year 1999 were $1.1 billion and should increase dramatically as a result of this
China Made One-Way, Market-Opening Concessions. For The
United States, Granting Permanent Normal Trade Relations Would Simply Maintain
The Market Access We Currently Apply To China. China made significant,
one-way market-opening concessions across the board in agriculture.
. The overall average duty for agricultural products
will fall from 22% to 17.5%. On U.S. priority agricultural products,
tariffs will drop from an average of 31% to 14% by January 2004, with even
sharper drops for beef, poultry, pork, cheese, and other commodities.
Tariff Reductions on Priority Products
. China has
committed not to use export subsidies for agricultural products when it
joins the WTO. This commitment would level the playing field in
third-country markets for U.S. exports of corn, rice, and cotton -- which in
the past have been displaced by unfairly traded Chinese exports.
committed first to cap and then to reduce trade-distorting domestic
subsidies. The specific levels will be determined through multilateral
negotiations in Geneva on the protocol and working party report. China also
committed to provide greater transparency to make its domestic support
measures more predictable.
China has committed to fully
abide by the terms of the WTO Agreement on Sanitary and Phytosanitary
Measures, which requires that all animal, plant, and human health import
requirements be based on sound science -- not political agendas or
protectionist concerns. Additionally, China and the United States agreed
bilaterally on the terms for the removal of scientifically unjustified
restrictions on imports of U.S. wheat, citrus, and meat.
The Agreement explicitly permits the U.S. to
continue to use its anti-dumping methodology for 15 years after China’s
accession to the WTO. China also has committed to a strong product-specific
safeguard that allows the United States for 12 years after accession to
restrain increasing imports from China that cause or threaten market
disruption. After that, current U.S. safeguard provisions -- Section 201 --
will remain available to address increasing imports.
Currently, only companies that receive specific authorization
from the Chinese government are allowed to import into China. Under the
Agreement, China has committed to allow any entity to import most products
into any part of the country within three years of accession. A select list
of products will be partially exempt from this rule and some trade will be
channeled through China’s state-trading enterprises (including wheat,
corn, rice, and cotton; state trading will be phased out for soybean oil).
However, specific commitments to end monopoly import status have also been
established. Additionally, China has committed to liberalize distribution
services for all agricultural products, except tobacco, allowing U.S.
companies to distribute and market their products in China.
China Will End Its System Of Discriminatory Licensing
And Import Bans For Bulk Commodities, And Will Create Market Access
Opportunities By Establishing A WTO-Consistent Tariff-Rate Quota System. China
will establish significant and growing TRQs for state-traded commodities
such as wheat, corn, cotton, rice, and soybean oil. China has also
committed to low, within-quota tariffs of 1-3 percent, which will help
American farmers take full advantage of the TRQs. In addition, China
committed to allow a share of the TRQs for each commodity to be imported
by entities other than state-trading entities and agreed to specific rules
for the administration of these TRQs. The introduction of private trade --
combined with increased transparency in the process -- will ensure
increased opportunities for American agricultural exports.
American Farmers Will Benefit From Dramatically Expanded
Market Access Opportunities. American farmers will realize enormous benefits
in virtually every agricultural sector, including:
China’s offer for corn, wheat, and rice
will lock in important and long-term market access opportunities for
American farmers. China has also agreed to remove its import ban on wheat
and other grains from the Pacific Northwest.
China is the world’s largest consumer of
pork, but import barriers have effectively denied access to American pork
products. Under the Agreement, China will reduce its tariffs on frozen pork
and offal from 20% to 12% by 2004. This reduction in tariffs, along with
China’s agreement to eliminate unscientific barriers, will result in
substantial marketing opportunities for high-quality and competitively
priced U.S. pork.
By 2004, China will reduce its tariffs from 45%
to 12% on frozen beef, and from 45% to 25% on fresh/chilled beef. While
China currently imports a small quantity of beef, income growth and
increased consumption among the urban populations should significantly
increase demand for U.S. beef.
China is already the second-leading market
for U.S. poultry exports. Under the Agreement, China will reduce tariffs
from 20% to 10% -- which should create a significant, immediate impact on
China is the world’s largest producer and
consumer of cotton, accounting for 20-25% percent of the world’s total in
both categories. Under the Agreement, China will establish a large, low-duty
TRQ for cotton with a substantial share reserved for private importers,
which should lead to expanded U.S. cotton sales.
China will cut tariffs on a number of fruits
and fruit products exported by the United States, including citrus, apples,
and grapes, and will be obliged to remove unjustified import bans. While
China is a major producer of citrus and other fruits, U.S. producers will
benefit from access to major markets that are not adequately served by
China's producers. China also made a bilateral commitment to lift its ban on
imports of citrus fruit from California, Arizona, Texas, and Florida.
Agricultural commodities as diverse as wine,
solid wood products, fishery products, tree nuts (including almonds), dairy
items (especially cheese), snack foods, and other consumer-ready items, can
all expect to benefit from China’s WTO accession.
Oilseeds. The WTO Agreement promises to bind
tariffs at a low rate for soybeans (3%) and soybean meal (5%), and to
eliminate quota limits, which will significantly increase future
opportunities for U.S. producers. Export prospects for soybean oil are
also bright, as China phases out quantitative restrictions and liberalizes
trade completely by 2006.
Thursday, October 14, 2004 PM