February 9, 2000
China is committing to establish a "tariff-only" import regime; all
WTO-inconsistent non-tariff barriers will be eliminated. Any other measure, such
as inspection, testing, and domestic taxes must be applied in a manner that is
consistent with WTO rules requiring a transparent and non-discriminatory system.
While trade in soybean oil will be completely liberalized by 2006, China will
use a tariff-rate quota (TRQ) system and state trading during the interim. Under
this system, China will permit imports of approximately1.7 million metric tons
at a duty of 9%, with the quantity growing to nearly 3.3 million metric tons by
2005. Imports over this quota will face a higher duty of 74% falling to 20% by
the year 2005. In 2006, the TRQ and state-trading will be eliminated, with
nothing remaining but a 9% duty for all imports of soybean oil. China made
specific commitments to administer these TRQs based on economic rather than
political criteria. These commitments are designed to ensure a transparent and
consistent system for allocating shares of the TRQ to end-users and creating
provisions to ensure that quota-holders are not impeded in utilizing their
quotas. If TRQs are not utilized, they are redistributed to other
non-state-trading end-users who have an interest in importing. If a TRQ share
that was reserved to be imported by a state trader is not contracted for by
October for any given year, it will be reallocated to non-state trading
For oilseeds, China’s commitments include:
Soybeans and Meal
- China will bind its tariff for soybeans at the current applied rate of 3%,
foreclosing its ability to establish a quota in the future. China’s
imports of soybeans exceeded 3,000,000 metric tons in 1998. China will bind
its tariff for soybean meal at 5%.
- China will phase out the TRQ for soybean oil by the year 2006. During
implementation, the TRQ will grow from 1,718,000 metric tons to 3,261,000
metric tons, with the share reserved for importation through entities other
than state trading enterprises growing from 50 percent to 90 percent before
the TRQ is eliminated. The in-quota duty during that period will be 9%,
while the over-quota duty will fall from 74% in the year 2000 to 9% in the
- China will immediately eliminate quotas on cottonseed, sunflower,
safflower, peanut and corn oil and replace them with a 10 percent tariff.
China agreed not to charge a higher duty for any of these oils, and for
soybean oil, than is charged for other vegetable oils.
Trading Rights and Distribution
- Currently, U.S. companies’ ability to do business in China is strictly
limited because the right to engage in trade (importing and exporting) is
restricted to a small number of companies that receive specific
authorization or who import goods to be used in production. This limits U.S.
exports. China has agreed that any entity will be able to import most
products, including oilseeds and oilseed products, into any part of China.
This commitment is phased in over the three-year period with all entities
being permitted to import and export at the end of the period. Under the
soybean oil TRQ, 50 percent of the TRQ will be reserved for entities other
than state trading enterprises initially, with this share growing to 90
percent by 2005.
- China -- which generally prohibits companies from distributing imported
products or providing related distribution services -- will permit foreign
enterprises to engage in the full range of distribution services. These
rights will be phased in over a three-year period for almost all products.
(See separate papers on distribution services and related services.)
China will eliminate export subsidies for agricultural products when it
joins the WTO, benefiting U.S. agricultural products competing in
- China committed to cap and reduce trade-distorting domestic subsidies;
specific levels will be determined through multilateral negotiations.
Sanitary and Phytosanitary Measures
- China 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.
Thursday, October 14, 2004 PM