Tariffs
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China has bound its tariffs on fertilizer products at a current average
of 8.9 percent. Over 85 percent of China’s fertilizer products are
bound at 4 percent or lower.
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China will establish a tariff-rate quota (TRQ) system for some fertilizer
products with different in- and out-of-quota tariff rates that will take
effect on January 1, 2002.
Quotas
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The current system of quotas has been eliminated for U.S. priority fertilizers,
including urea and diammonium phosphate (DAP). China committed to
eliminate all fertilizer quotas by January 1, 2002.
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China will establish a TRQ system for DAP, urea, and NPK (nitrogen, phosphate,
potassium) that will permit a specific quantity of each of these products
to be imported at a low in-quota duty rate of 4 percent. The quota
quantities will grow substantially over the six-year implementation period.
Import volumes above the specified quantity will not be limited, but will
face a duty of 50 percent. A specific portion of each quota quantity
will be reserved for importation through non-state trading entities (private
trade), and the rest will be imported by state-trading entities.
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Quota quantities for DAP, Urea, and NPK will increase beyond 2006 in parity
in amounts to be determined.
Distribution and Trading Rights
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A significant portion of imports of fertilizers will remain subject to
state trading, as identified in Annex
2A to the Protocol.
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Trading rights for importing fertilizers under the portion of the TRQ that
is reserved for private trade will be phased in over three years.
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China has agreed to eliminate immediately any export performance, trade
or foreign exchange balancing, and prior experience requirements as criteria
for obtaining or maintaining the right to import and export.
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Chinese enterprises will have full trading rights upon accession, subject
to certain minimum registered capital requirements. Joint ventures
with minority foreign ownership will be granted full trading rights within
one year after accession, and joint ventures with majority foreign ownership
will be granted full trading rights within two years after accession.
All enterprises will be granted full trading rights within three years
after accession to import fertilizers within the private sector TRQ
allotment.
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China does not generally permit foreign companies to distribute products
through wholesale and retail systems in China or to provide related distribution
services, such as repair and maintenance services. These prohibitions
will be eliminated five years after accession for chemical fertilizers.
(See sector report on Distribution
Services)
Import Procedures
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China has agreed to bring both its automatic and non-automatic import licensing
systems into conformity with the WTO Agreement on Import Licensing, ensuring
that these systems will not function as trade barriers and will comply
with the principles of national treatment and nondiscrimination.
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China will no longer condition importation or investment approvals on whether
competing domestic suppliers exist or on performance requirements of any
kind, such as export performance, local content, technology transfer, offsets,
foreign exchange balancing, or research and development.
Technical Barriers to Trade
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China must bring all of its technical regulations, standards, and conformity
assessment procedures into conformity with the TBT Agreement. The
same processing periods and fees will apply to both imported and domestic
products and the choice of the assessment body or agency will be at the
discretion of the importer.
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China must apply the same technical regulations, standards, and conformity
assessment procedures to imported and domestic products by authorizing
agencies to assess both types of products during an 18-month transition
period.
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Multiple and duplicative assessment procedures will be eliminated.
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China will only test imported products for conformity with contractual
terms at the request of the parties to the contract and will not require
further conformity assessment procedures (except for random sampling) for
products certified by a body that China recognizes (e.g., UL).
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China must now base technical regulations on international standards.
These regulations must be developed in a transparent manner and applied
equally to domestic and foreign products.
Taxes
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China has agreed to ensure that its laws, regulations, and other measures
relating to internal taxes and charges levied on imports comply with WTO
rules and are applied uniformly to both foreign and domestic enterprises.
This obligation applies not only to national taxes but to provincial and
local taxes as well.
Subsidies
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China has agreed to eliminate all subsidies on industrial goods that are
prohibited under WTO rules, i.e., export and import substitution subsidies.
(See separate report on Import
Related Issues)
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