China and the US are about to ink a trade agreement.
WASHINGTON On January 15, President Donald Trump stated that the United States and China will sign the first phase of their trade agreement at the White House. Vice-Premier Liu He was said to be leading the Chinese delegation. On January 16, the Chinese delegation was scheduled to return to Beijing.
Food and agriculture groups were looking forward to the signing. According to U.S. trade authorities, China is expected to import farm and food goods from the United States for at least $40 billion in each of the following two years. This represents an increase of $16 billion annually above the baseline imports of $24 billion in 2017, the year before to the start of the trade war. It was anticipated that information on how China can achieve $40 billion in yearly imports and how different agricultural and food items could be impacted.
Han Jun, China’s vice-minister of agriculture and rural affairs, responded to questions from the media over whether his country would raise its tariff rate quotas for grain as part of the phase one agreement. He stated that import quotas for rice, wheat, and corn will not rise.He declared, “These are global quotas.” “We won’t modify them exclusively for one nation.”
Since there was plenty of room in the current T.R.Q.s for China to dramatically expand its imports of wheat and other grains, including from the United States, the matter of raising tariff rate quotas for wheat and other grains may not even come up.
China decided to join the WTO in 2001, although it hasn’t imported nearly as much wheat as its yearly T.R.Q. of 9.64 million tonnes. In 2019–20, China was expected to import 3.2 million tons of wheat. China’s wheat imports have consistently fallen considerably short of the T.R.Q. since the country joined the WTO, with a low of 49,000 tonnes in 2007–08 and a high of 6,773,000 tonnes in 2013–14. Following its WTO membership, China’sA peak of 3,965,000 tons of US wheat were imported in 2013–14.
Furthermore, a T.R.Q. does not obligate you to purchase a specific quantity of grain. It is an agreement to grant imports up to the T.R.Q. zero-tariff or designated extremely low-tariff access. Tariffs on grain imports exceeding that threshold may increase, sometimes significantly.
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Raising the grain T.R.Q.s has not been the main focus of American criticism regarding China’s grain imports. Instead, they have been worried about the way the present T.R.Q.s are being handled. In two connected issues in 2019, W.T.O. panels rendered a decision in favor of the United States.
A W.T.O. tribunal found in favor of the United States in April, ruling that China’s processing constraints, public comment process, allocation and reallocation procedures, and eligibility requirements for its grain T.R.Q.s are all inconsistent with the country’s accession protocol. Furthermore, it was discovered that China allots a sizeable percentage of each T.R.Q. to a state-traded company that has been designated and is exempt from the same regulations that apply to non-state trading companies looking to import grains under the T.R.Q.
It was argued that China would have imported a lot more grain in the previous few years if its grain T.R.Q.s had been managed in an open, equitable, and transparent manner. China declared that it would not appeal the decision and was reportedly updating its T.R.Q. management protocols. The adjustments, according to American wheat growers, should lead to more wheat being imported from the United States.
Furthermore, in February, a WTO panel sided with the United States in ruling that China goes much beyond its obligations under WTO regulations in giving its grain producers domestic subsidies that distorts trade.