China's Import Tariff Quotas for Agricultural Products, 2019-2023 Outlook - Agricultural Imports in Quota are Subject to Low Tariff Rates, while Those Out of Quota are Subject to High Tariff Rates - ResearchAndMarkets.com

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Report on China's Import Tariff Quotas for Agricultural Products,
2019-2023" report has been added to ResearchAndMarkets.com's
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The Interim Measures for Administration of Import Tariff Quotas for
Agricultural Products (hereinafter referred to as the Interim Measures)
was a government document formulated by China's National Development and
Reform Commission and put into force on Feb. 5, 2002. The Interim
Measures determines the annual import tariff quotas for agricultural
products according to China's schedule of concessions on goods in the
accession to the WTO.

According to this analysis, by May 2019, the Interim Measures applies to
agricultural products including wheat, corn, rice, sugar, cotton, wool
and wool top. The import tariff quotas for wheat, corn, rice, sugar, and
cotton are classified into the quotas to state trading enterprises and
the quotas to non-state trading enterprises to give priority to
state-owned enterprises. The import of wool and wool top is exclusive to
designated companies.

It is believed that China's tariff rate quota administration for
agricultural products has both advantages and disadvantages. On one
hand, it protects the domestic agricultural product market from the
impact of large quantities of low-price agricultural imports. Low
in-quota tariff rates ensure low-cost raw materials to the agricultural
product processing enterprises in China.

On the other hand, the tariff rate quota administration triggers
international trade disputes. For example, in Dec. 2016, the United
States filed a lawsuit with the WTO against China's administration of
the import tariff quotas for wheat, rice, and corn. In Apr. 2019, the
United States won WTO ruling against China's use of tariff-rate quotas
for rice, wheat, and corn, which it successfully argued limited market
access for U.S. grain exports.

Besides, some applicants to the import tariff quotas are not
agricultural product processing enterprises but trade companies. They
resell agricultural products in quota to agricultural product processing
enterprises with price markups. Consequently, agricultural product
processing enterprises have to pay more for agricultural imports.

According to the author, the annual import tariff quotas for some
agricultural products cannot be used up. For example, in 2018, China's
corn imports totaled 3.52 million tons, accounting for only 48.9% of the
quota quantity of 7.2 million tons; the wheat imports totaled about 3.1
million tons, accounting for only 32.2% of the quota quantity of
9,636,000 tons.

Such surpluses are caused by strict eligibility criteria. Many
downstream enterprises (such as feed processing enterprises and food
processing enterprises) that fail to obtain the import tariff quotas
purchase raw materials from other sources or even purchase agricultural
products smuggled into China.

It is expected that the import tariff quotas for agricultural products
will go out of date as China's foreign trade develops and China's
economy becomes more global. However, most of these quotas will continue
to exist from 2019 to 2023 because the Chinese government needs to
protect the domestic agricultural product market and some state-owned
enterprises can make profits from reselling tariff quotas.

Topics Covered

• Introduction to China's import tariff quotas for agricultural products
• Analysis of advantages and disadvantages of China's import tariff
  quotas for agricultural products
• China's import of agricultural products subject to tariff rate quota
  administration
• Major enterprises granted with China's import tariff quotas for
  agricultural products
• Forecast on development of China's import tariff quotas for
  agricultural products

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