Limits of Chinese offer on agriculture

The third of Long Yongtu’s “four points”:http://www.inquit.com/article/313/what-china-wants-in-a-free-trade-agreement was made more explic­it in an inter­view with the Syd­ney Morn­ing Her­ald bq. “Agri­cul­ture is a sen­si­tive area … We can­not pro­vide Aus­tralia with coun­try spe­cif­ic quo­tas. That would cause a lot of con­cern among oth­er coun­tries.” Mr Long said Chi­na could not grant Aus­tralia larg­er export quo­tas because this would cut across Amer­i­can trade inter­ests. But he saw scope for reduc­ing China’s agri­cul­tur­al tar­iffs, which are low by glob­al stan­dards. In return, Chi­na would seek changes to Australia’s quar­an­tine rules. (“Syd­ney Morn­ing Herald”:http://www.smh.com.au/articles/2004/08/15/1092508267512.html) This pol­i­cy, if main­tained, will make the pro­posed ‘free trade’ agree­ment less attrac­tive to Aus­tralia. It implies pref­er­en­tial cuts to ‘in-quo­ta’ rates rather than reduc­tions in the out-of-quo­ta rates—which give effect to the ‘quota’—on prod­ucts such as wheat, rice and cot­ton. In fact, the in-quo­ta rates on these prod­ucts are already very low, so reduc­tions there will not mean much. Note, too, that apart from the quo­ta con­trol, Chi­nese state-owned enter­pris­es main­tain a strong hold in imports.

 Quo­ta vol­ume m tonnes 2004Share allo­cat­ed to SOEsIn-quo­ta tar­iff %Out of quo­ta tar­iff %
Rice5.3250165
Wheat9.6490165
Maize7.2060165
Cot­ton0.8933140
Wool0.370138
Edi­ble oils6.8110968.3
Sug­ar1.9502050


source: FAO State of Food and Agri­cul­ture, 2002

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