Australia welcomes greater transparency in China’s wool quota

Australian Government Minister for Trade, Warren Truss, said today he was pleased that progress was being made in discussions with China to improve its wool tariff rate quota (TRQ) administration.

However, Mr Truss said new arrangements announced by China would not resolve concerns about potential disruption to wool exports to China later this year once available quota is used.

“New wool and wool tops tariff rate quota regulations recently released by China’s Ministry of Commerce make a number of worthwhile changes to China’s wool import regime,” Mr Truss said.

“The new regulations include measures to provide greater access to quota for Chinese wool processors and to redistribute unused quota more quickly and efficiently. The regulations take effect from January 2008 and stipulate that:

China’s 2008 greasy wool TRQ will remain at the 2007 level of 287,000 tonnes, and the wool tops TRQ will remain at 80 000 tonnes;
applicants for quota allocations must be an “actual importer” of wool in the previous year or be a wool processor commencing operations in 2008 with an actual capacity of at least 5,000 tonnes;
the period of validity for quota allocations has been reduced from six months to four months;
quota holders must return quota not used in the period of validity;
the latest date any quota can be handed back, regardless of the period of validity, is 15 September - after this time, unused quota will be regarded as having not been filled and the relevant quota-holder will have the amount they can be allocated in the following year reduced; and
quota-holders must submit evidence that they have imported wool otherwise their quota allocation for the following year will be reduced.

“The recent changes are a positive step towards increasing the transparency in China’s management of its wool quota, and should give Australian wool producers more confidence in exporting to Chinese customers next year.”

Mr Truss said that the Australian Government is continuing discussions with China about the potential volatility in the wool trade later this year.

“I have raised the Australian wool industry’s concerns with China’s Minister for Commercetwice recently, including during the APEC meetings in September, and senior officials from my Department and the Department of Agriculture, Fisheries and Forestry have been in regular contact with Chinese officials.

“I want to ensure stability in our bilateral wool trade and a reliable and uninterrupted supply of wool to Chinese mills.

“The Australian Government will monitor the process of reallocating wool tariff quotas in 2007 and the implementation of the new regulations and I will continue to seek further improvements to the transparency of the wool quota system,” Mr Truss said.

Media Inquiries: Minister Truss' office 02 6277 7420 - Departmental Media Liaison 02 6261 1555