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    China Business
     Dec 20, 2005
China trying to protect farmers at WTO

HONG KONG - Four years after its accession to the World Trade Organization (WTO), China is striving to play an active role in improving international trade rules to protect its vulnerable agriculture, among other sectors.

"We've set the target of building a 'new socialist countryside', which aims to raise the efficiency of agriculture and the income of 900 million farmers," said Chinese Vice-Minister of Agriculture Niu

Dun at the WTO's sixth Ministerial Conference, which ended here on December 18.

The "new countryside" policy, advocated by the ruling Communist Party of China, is expected to activate the country's rural market and speed up social and economic development there, which lags far behind the country's booming urban areas. "To do so, we have to turn our eyes to the international market [and] the process of globalization," Niu said.

China has fulfilled its commitments to the international trade regime and witnessed soaring trade in agricultural products, which hit US$51 billion in 2004, up 84% over 2001 when it joined the WTO. China also cut its overall agricultural tariffs from 54% to 15.3%; levels are expected to drop further to 15.2% in 2006. In contrast, the average agricultural tariff worldwide stands at 62%.

"Not a single member in the WTO history has made such a huge cut in such a short period of time, even the developed members," said Chinese Minister of Commerce Bo Xilai, who was in Hong Kong attending the WTO conference.

However, Chinese agriculture suffers from various disadvantages, such as undersized farms, poor infrastructure, and a lack of technology and investment, as well as foreign subsidies and the unfair world trade system, which has slowed down the growth of its farmers' income.

Though Chinese agricultural officials knew very well that the country had made extensive promises to open its market to the rest of the world, especially in the agricultural sector, they were still shocked by the first agricultural trade deficit in 2004, which hit $5.5 billion. "Part of the deficit was caused by foreign export subsidies, which lowered the prices for agricultural products such as grain, cotton and [soybeans]," said Cheng Guoqiang, a research fellow with the State Council Development and Research Center.

The United States, the world's largest cotton exporter, offered more than $3 billion of subsidies for cotton exports in the most recent year. Oxfam Group, a Hong Kong-based non-governmental organization, has said that this subsidy drove 720,000 Chinese cotton farmers out of work. Meanwhile, the European Union's subsidies for sugar exports reduced the per capita annual income of Chinese sugar growers by 300 yuan (US$37). The per capita income of Chinese farmers was 2,900 yuan in 2004. Making matters worse, Chinese exports of high-quality agricultural products, including vegetables, aquatic and livestock products, were kept out of many markets by tariffs or non-tariff trade barriers.

"Chinese farmers will feel more pressure on the international market, where agricultural trade is distorted by subsidies or trade barriers," Niu said, adding that this unfair situation must be changed in the process of the WTO trade talks. Niu said China will make the most of the domestic support measures permitted by WTO rules to improve the efficiency and competitive edge of its agricultural sector.

(Asia Pulse/XIC)



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