Agricultural Industry's WTO Commitments

Agriculture's relevant commitments to the World Trade Organization (WTO) involve the following aspects:

1. To abolish the non-tariff measures and convert them into tariffs

After China's accession to the WTO, non-tariff measures should be abolished and only tariff measures will be permitted in the administration of agricultural imports. According to the Protocol of Agriculture, the conversion should use the 1986-1988 period as the calculation base. China has set down the principle of equivalent conversion during negotiations with other WTO members.

2. Tariff concessions and restrictions

The agricultural agreement between China and the United States became the main foundation of China's tariff-concession commitments in agriculture to the WTO. According to the Sino-US agreement of tariff concessions, China will reduce its agricultural tariffs step-by-step and restrict all of its agricultural product tariffs during the five-year transitional period from 1999 to 2004.

By the year 2004, the average tariff level of China's agricultural products will be reduced from the present 21.2 percent to 17 percent, falling 20 percent. As for the specific products, tariffs on wine will be reduced from 65 percent to 20 percent; cheese, from 65 percent to 12 percent and beef and fruit, from 30-45 percent to 10-12 percent. The tariff rate for soybeans will be restricted at 3 percent and barley, at 9 percent.

Tariff quotas will be used in the administration of wheat, corn, rice, cotton and wool imports, with low tariffs applied to imports under quotas and high tariffs for imports beyond quotas.

3. Tariff quotas will be implemented for the important products, and the quota volume will increase

China has committed itself to abolish non-tariff measures as soon as it enters the WTO; the administration of tariff quotas will come into force without affecting China's market access for WTO members. During the course of negotiations, China was given the chance to enforce the administration of tariff quotas on essential products, such as wheat, rice, corn, cotton, bean oil, sugar, etc.

The deadline to stop enforcing the administration of tariff quotas on wheat, rice, corn, cotton and sugar is 2004;

The deadline to stop enforcing the administration of tariff quotas on bean oil, palm oil and rap oil is 2005;

The import quotas committed by China for wheat, corn, rice, sugar and cotton in 2002 were 8.468 million, 5.85 million, 3.99 million, 1.764 million and 0.8185 million tons.

By 2004, the above quotas will increase to 9.636 million, 7.2 million, 5.32 million, 1.945 million and 0.894 million tons.

The committed importing quotas for bean oil, palm oil and rap oil in 2002 were 2.518 million, 2.4 million and 0.8789 million tons, which will increase to 3.5871 million, 3.168 million and 1.243 million tons in 2005.

The in-quota tariffs for wheat and corn range between1-10 percent and the beyond-quota tariffs are 65 to 71 percent. The in-quota tariffs for rice range between 1 to 9 percent and their beyond-quota tariffs range between 65 to 71 percent.

The in-quota tariffs for sugar will be reduced from 20 to 15 percent and its beyond-quota tariffs will fall from 60.4 to 50 percent.

The in-quota tariffs for cotton is 1 percent and its beyond-quota tariffs will be reduced from 54.4 to 40 percent.

The in-quota tariffs for bean oil, palm oil and rap oil are 9 percent without exception, and their beyond-quota tariffs will drop from 52.4 to 19.9 percent.

During the course of negotiations, China and the US reached a compromise regarding the allocation of importing quotas as follows:

By 2004, the state's trading proportion of wheat will be 90 percent and that of corn will be reduced from 68 to 60 percent. The state's trading proportion of rice will be 50 percent, while the proportions of sugar and cotton will be 70 and 33 percent respectively.

By 2005, the state's trading proportion of bean oil, palm oil and rap oil will be reduced from 34 to 10 percent, and ultimately reach 0 in 2006.

4. Supporting measures and export subsidy for agriculture

Domestic support for agricultural products:

According to the Agriculture Protocol of the WTO, developing members without domestic AMS concession commitments should make sure its policy support falling into the extent of Yellow Box not higher than 10% of its agricultural production output value. The Sino-US agriculture agreement has set down the relevant ration at 8.5 percent lower than the expected level for developing countries.

Export subsidy: At the fifth working party on China's accession to the WTO, the Chinese delegations declared to abolish the export subsidy for agricultural products while continuing to reduce tariffs and removing non-tariff barriers.