China will reduce its tariffs on wood and wood products from its current
average tariff of 10.6% to 3.8%. Reductions will begin on accession and will
be fully implemented by January 1, 2004.
If WTO Members agree to and adopt the forest products sectoral initiative
that originated in APEC, China will join this initiative and eliminate its
tariffs on these products.
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 wood 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.
China -- which generally prohibits companies from distributing imported
products or providing related distribution services -- will permit foreign
enterprises to engage in the fullrange of distribution services.
These rights will be phased in over a three-year period for almost all
products, including wood products. (See separate papers on distribution
services and related services.)
Other Commitments
China has agreed to provide treatment to the United States on par with
China’s preferential programs. For example, if China grants a lower tariff
rate to Malaysia than is applied in China’s tariff schedule due to a WTO-consistent
preferential program, that rate must also be provided to the United States
for wood products.
To alleviate the uncertainty associated with China’s inconsistent
application, refund, and waivers of its 17% VAT tax, China has agreed to
apply all taxes and tariffs uniformly to both domestic and foreign
businesses.
China has agreed not to apply or enforce export performance, local
content, and similar requirements as a condition on importation or
investment approval.
