American agriculture will benefit from China's accession to WTO

Introduction: Patricia R sheikh, deputy director of international trade policy of Agricultural Products Export Bureau of the U.S Department of agriculture, testified in the U.S - China Committee on January 18 to discuss the impact of China's accession to the WTO on American agriculture Here is the full text of Sheikh's speech: Mr chairman, members of the committee, thank you for giving me the opportunity to discuss the important impact of China's accession to the WTO on American agriculture and how the United States will effectively monitor China's implementation of its WTO obligations China became the 143rd member of the WTO on December 11, 2001, marking the end of the protracted negotiations over the past 15 years China's accession to the global trading system can provide timely benefits to the producers, processors and exporters of American agricultural products China has a population of 1 billion 300 million, accounting for 1/5 of the world's population China's accession to WTO enables American agriculture to enter one of the largest and fastest growing economies in the world A wide range of US agricultural products, including grains, meat, fruits and vegetables, cotton and processed products, will have new export opportunities China's accession to the WTO has greatly reduced China's import barriers to American agricultural products The U.S Department of agriculture predicts that once China fully implements its commitment to the WTO, U.S agricultural exports will increase by about $2 billion annually by 2005 due to tariff reduction According to the bilateral agreement between the United States and China on China's accession to the WTO in 1999, China agreed to reduce tariffs on priority agricultural products of the United States by more than half, such as beef (from 40% to 12%), poultry (from 20% to 10%), cheese (from 50% to 12%), citrus (from 40% to 12%), apple (from 30% to 10%), wine (from 65% to 20%) and grape (from 40% to 13%) After China's accession to the WTO, it also agreed to stop the system of differential treatment for licensing, cancel the import ban on bulk commodities, and create market access opportunities through the establishment of tariff rate quota (TRQ) system in line with the provisions of the WTO China has expanded and increased TRQs for state-owned commodities such as wheat, corn, cotton, rice and soybean oil China has also promised to impose a low tariff of 1% to 3% on the import of commodities within the quota, which will help American farmers get the full benefits of the tariff quota In addition, China has promised to allow entities other than state-owned trading entities to share tariff quotas for each category of goods imported, and has agreed to implement specific regulations for the administration of these tariff quotas Allowing the private sector to operate these goods - and increasing the transparency of the process - will guarantee increased export opportunities for us agricultural products China has promised not to subsidize the export of agricultural products after its accession to the WTO This commitment will provide fair competition opportunities for US exports of corn, rice and cotton in the third market These products have been replaced in the past by Chinese exports, which are unfairly traded On the issue of domestic support, China has promised to set the highest level of trade distorting domestic support at 8.5% of the total value of agricultural products China currently provides very low subsidies for agricultural products In addition, China is committed to transparency and greater predictability of domestic support measures China is committed to fully comply with the provisions of the WTO Agreement on sanitary and phytosanitary measures (SPS) The agreement requires that all import regulations relating to animals, plants and human health must be based on sound science, not on political or protectionist considerations In addition, China and the United States reached an agreement on terms to lift quarantine restrictions on wheat and other grains, oranges and meat from the United States without scientific basis The agreement of China's accession to the WTO explicitly allows the United States to maintain the anti-dumping method against the non market economy within 15 years after China's accession to the WTO China also pledged to implement strict product specific safeguards that would allow the United States to limit the increase of Chinese imports that disrupt or are in danger of disrupting the market within 12 years of China's accession to the WTO After that, the United States can still maintain its existing safeguard clause - 201 - to deal with the problem of increased imports, if that happens American farmers will benefit from the expansion of trade rights Currently, only companies specifically authorized by the Chinese government can import products into China Under the agreement, China promised to allow any entity to import most of its products into any region of China within three years of China's accession to the WTO To some extent, the products listed in the special list are not subject to this regulation, and some trade activities will be conducted through the channels of China's state-owned trading enterprises (including wheat, corn, rice and cotton; the state monopoly of soybean oil will be gradually cancelled) However, China has made specific commitments to cancel its import monopoly status In addition, China is committed to opening up distribution services for all agricultural products except tobacco and grass industry, allowing us companies to distribute and sell products in China All in all, American farmers will benefit from a substantial increase in market access opportunities Farmers in the U.S can make huge profits in almost every industry in the agricultural sector These industries include: - grain China's commitment to corn, wheat and rice does give American farmers important and long-term market access China also agreed to lift the ban on imports of wheat and other grains from the Pacific Northwest - oilseeds Under the WTO agreement, China has set tariffs on soybeans and soybean meal at 3% and 5% respectively, and will lift quotas This will greatly increase opportunities for American producers in the future With the gradual removal of quantitative restrictions and the full opening of trade by 2006, soybean oil also has a bright future for export - pork China is the world's largest consumer of pork, but import barriers have effectively prevented us pork products from entering According to the agreement, by 2004, China's tariff on frozen pork and pig water will be reduced from 20% to 12% The reduction of tariff, together with the elimination of non scientific barriers in China, will bring huge sales opportunities for high-quality and competitive American pork - beef By 2004, China's tariff on frozen beef will be reduced from 45% to 12%, and on fresh / cold beef from 45% to 25% Although China currently imports only a small amount of beef, with the increase of income and the increase of urban population consumption, the demand for beef in the United States should rise significantly - poultry China is already the second largest market for U.S poultry exports Under the agreement, China will reduce tariffs from 20% to 10% - which will have a huge impact on U.S exports immediately - cotton China is the world's largest producer and consumer of cotton, accounting for 20% to 25% of the world's production and consumption Under the agreement, China will establish a wide range of low import tariff quotas for cotton imports, with a considerable share reserved for private importers, which should help expand cotton sales in the United States - fruit China will cut tariffs on a variety of fruits and fruit products exported by the United States, including oranges, apples and grapes China also has an obligation to lift the improper import ban Although China is a major producer of citrus and other fruits, American producers will benefit from the high quality and variety of fruits produced in the United States China also promised in a bilateral agreement to lift the ban on plant quarantine on Citrus imports from California, Arizona, Texas and Florida - others A variety of agricultural products, such as wine, solid wood products, aquatic products, dried fruits (including almonds), dairy products (especially cheese), snacks and other manufactured products, are expected to benefit from China's accession to the WTO According to the protocol of China's accession to the WTO, China agrees to fulfill numerous commitments on opening up trade after its accession to the WTO, which will improve the market access of American agriculture We recognize that the implementation of the WTO agreement will pose a major challenge to China and its trading partners China needs to reform its system, re enact and revise thousands of laws, regulations and rules of the central government and provinces Due to the complexity of China's economy and import system, this process will be long-term As far as China is concerned, on the surface, the negotiations are over, but this is often just the beginning The USDA attaches great importance to the effective supervision of China and the implementation of China's WTO commitments To ensure that China fulfils its new obligations, the U.S Department of agriculture is setting up a "China working group" to monitor China's compliance with its WTO commitments The working group will draw on the expertise of all departments of the Ministry of agriculture In addition, we continue to work closely with our overseas agencies and industry groups We are currently planning to advise China on the development of new biotech regulations to ensure that they do not impede trade Due to the importance of Chinese market to American agricultural producers, USDA attaches great importance to this aspect of work In short, we firmly believe that China's accession to the WTO, a trade system governed by regulations, will benefit American farmers and herdsmen, export industry, manufacturing industry and food processing industry American agriculture can now enter the Chinese market with 1.3 billion consumers The U.S Department of agriculture is ready to actively supervise and urge China to fulfill its commitments to the WTO, so as to realize the possible benefits provided by China's accession to the WTO.