MEDIA RELEASE

DEPUTY PRIME MINISTER AND
MINISTER FOR TRADE

TIM FISCHER

11 April 1999

US - China Trade Breakthrough
Fischer Welcomes Opportunities for Australian Exporters

Australian exporters are likely to benefit following the signing of a new trade deal between the United States and China in Washington overnight (Australian time), according to Deputy Prime Minister and Minister for Trade, Tim Fischer.

Mr Fischer said the trade deal moves China a step closer to joining the World Trade Organisation (WTO), which if it proceeds, will see the concessions reached in bilateral negotiations being made available to other countries world-wide, including Australia.

He stressed that a final outcome on China's accession to the WTO will depend on full agreement being reached with all China's WTO partners.

"These new Chinese offers are of great potential value to Australian exporters and point the way to acceptable outcomes for the unresolved trade issues of importance to Australia, which include access for sugar and wool."

"I will pursue these outstanding issues when I visit China next month," he said.

Mr Fischer said he was encouraged by the details of the US-China trade pact which he understood to include the following:

Agriculture

Improved market access for agriculture, including:

• Wheat - increasing current global access from around 2 million tonnes per annum, up to 7.3 million tonnes when China joins the WTO, rising to 9.6 million tonnes by 2004, at a tariff of 1%
• Rice - opening up the Chinese market to rice imports of initially 2.6 million tonnes upon WTO accession, growing to 5.3 million tonnes by 2004, at a tariff of 1 %
• Cotton - increasing current global access from around 400,000 tonnes, to 743,000 tonnes when China joins the WTO, at a tariff level of 3 %, growing to 894,000 tonnes by 2004.

"China has also offered to reduce its agricultural tariffs dramatically," Mr Fischer said, "with most to phase down over 5 years to maximum levels of around 10% to 20%."

"For example, beef and pork tariffs would be reduced to 12%, tariffs on apples, pears, grapes, peaches and plums would be reduced to 10%, tariffs on citrus to 12%, certain cheeses to 12% and wine to 20%. These arrangements will provide much improved and predictable access to the Chinese market for many key agricultural products," he said.

Industrial

Two-thirds of China's industrial tariff cuts would be fully implemented by 2003, with most of the remainder by 2005, down to maximum levels of around 10% for most industrial products. For example, automobile tariffs would be reduced to 25% and tariffs on auto parts to an average of 10% by 2005.

He said China has also offered to reduce significantly its non-tariff measures. For example, quotas on automobiles and parts are to grow by 15% annually from a level of $US6 billion in 2000, and these will be eliminated by 2005.

Information Technology:

China has offered to participate in the WTO Information Technology Agreement, which require the elimination of tariffs on a range of computer and other high-tech products. Currently, China has many tariffs over 25%, some as high as 100%.

Services:

China has offered to greatly open its market to services trade on terms that will amount to significant deregulation of both the conditions of entry and the scope of operation for such businesses in China.

"These outcomes will benefit Australian companies involved in insurance, professional services such as legal services and accountancy, architecture, engineering, education services, telecommunications and distribution services," Mr Fischer said.