U.S. Dept. of State - IIP: The United States and China

Text: Agriculture Secretary Veneman Hails U.S.-China Agreement
(Department of Agriculture news release)
The accord reached between China and the United States on commitments China will undertake as part of its accession to the World Trade Organization (WTO) is good for American farmers, according to Secretary of Agriculture Ann M. Veneman.
In a June 14 news release from the Agriculture Department, Veneman said the deal reached in Shanghai earlier this month would mean an increase of $2 billion in agricultural exports to China.
China's practice of subsidies and other supports for domestic agricultural producers was one of the main topics taken up by officials from the U.S. Trade Representative's office and their Chinese counterparts.
According to the news release, Beijing has agreed to limit the use of "trade-distorting" domestic agricultural subsidies to 8.5 percent of the total value of its agricultural production, below the 10-percent level the WTO allows developing countries.
The Chinese government also agreed to an 8.5-percent cap on supports for specific products and waived the separate WTO exemption permitting developing countries to provide unlimited investment and input subsidies for agricultural and rural development, the news release says.
"I commend Ambassador Robert Zoellick and his USTR team for their work in bringing these issues to a successful conclusion," Veneman said.
"We will continue to work with USTR in pursuing the expansion of markets for U.S. food and agricultural products," she added.
Following is the text of the June 14 Department of Agriculture news release:
(begin text)
VENEMAN SAYS U.S. FARMERS TO BENEFIT FROM RECENT CHINA AGREEMENT

WASHINGTON, June 14, 2001 -- Agriculture Secretary Ann M. Veneman said today that China's recent bilateral commitments pave the way for significantly increased U.S. access to the world's most populous market.
We are very pleased that the United States and China have now resolved one of the last remaining bilateral issues in China's bid to join the World Trade Organization, Veneman said. For America's farmers, ranchers, and food processors, China's entry into the rules-based WTO trading system will mean an increase of about $2 billion a year in agricultural exports.
In trade negotiations in Shanghai last week, U.S. and Chinese trade officials reached agreement on the major remaining bilateral issues in China's WTO accession, including the issue of domestic agricultural subsidies. China agreed to limit its use of trade-distorting domestic agricultural subsidies to 8.5 percent of the total value of its agricultural production below the 10-percent level allowed for developing countries under the WTO. China also agreed to an 8.5-percent cap on supports for specific products and waived the separate WTO exemption permitting developing countries to provide unlimited investment and input subsidies for agricultural and rural development.
I commend Ambassador Robert Zoellick and his USTR team for their work in bringing these issues to a successful conclusion, said Veneman. We will continue to work with USTR in pursuing the expansion of markets for U.S. food and agricultural products.
Veneman said several steps still remain in finalizing the multilateral WTO accession process, but with these latest commitments from China, the U.S. can look forward to prospects for welcoming China and its 1.3 billion people into the world trading system. For U.S. producers, processors, and exporters, this will mean a significant expansion in future trade opportunities.
Under various WTO accession agreements, China has agreed to slash trade barriers and open its markets. For example, in the 1999 U.S.-China accession agreement, China agreed to cut tariffs by more than half on priority U.S. agricultural products such as beef, poultry, cheese, oranges, apples, wine, almonds, and others. With WTO entry, China also agreed to end import bans, expand trading rights for U.S. firms, and eliminate agricultural export subsidies.
Even with current trade barriers, China is one of the leading markets for U.S. farm and food products. Sales of U.S. agricultural products to China totaled $1.7 billion last year.
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(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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