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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