Textile Industry's WTO Commitments
1. China automatically receives integration treatment of "ATC"
Beginning
December 11, 2001, the European Union and the United States abolished quota
restrictions on products that originated in China in the integration list of the
first and second phases notified by the EU and the US to TMB, a World Trade
Organization (WTO) supervisory institution for textiles and apparel.
At the same time, the EU also abolished quota restrictions on other products.
From January 1, 2002, Turkey abolished quota restrictions on China-made products
built into the integration list of the first and second phases presented to TMB.
The USA, EU, Canada and Turkey abolished quota restrictions on products
originating in China that incorporated the uniform treatment list of the third
phase presented to TMB. China can adopt transitional protection measures for 49
percent of the 1990 imports volume as the base volume according to the sixth
clause of the ATC Agreement to protect the interests of the enterprises.
2. Tariff cuts
Beginning January 1, 2002, China started bearing the liabilities of cutting
tariffs for joining the WTO. According to the commitment, the average duty of
textiles apparel should be reduced by 17.8 percent, 15.2 percent and 11.4
percent respectively from 2002 to 2005. In 2002, the average reduction would be
2.45 percent. The average duty level in 2005 will be reduced by 6.4 percent
compared to that of 2002, with a reduction range of 36 percent. By 2005, all
duties will reach the binding level except for one duty number. After the duty
reduction, the "ladder" duty pattern (from low to high) will be created for
products from raw materials, medium products and manufactured products.
3. Non-tariff measures subject to phased elimination
Upon joining the WTO, China will abolish the import quota and licenses for
products under 42 duty numbers, i.e., wool, acrylic, terylene, etc. From 2002,
all import quotas and licenses for textiles, raw materials, textile garments and
textile machinery will be abolished. Apart from tariffs, China cannot re-adopt
or implement any other non-tariff measures after entering the WTO unless a large
volume of foreign products are dumped or the domestic industry suffers serious
damages and anti-dumping, anti-subsidy and protection methods are
applicable.
4. Gradual relaxation of import regulations
The tariff quota method is applied to cotton, wool and wool yarn imports.
Within the quota, a 1-percent tariff will be applied while the public duty code
tariff will be applied for imports exceeding the quota. In 2002, the quota for
cotton was 818,500 tons, a figure that will climb to 894,000 tons in 2004.
Domestic, non-State-owned trading companies will have 67 percent of the total
cotton tariff quota and the exports subsidy of cotton will be eliminated.
Based on the relative agreement of the WTO, animal and plant products will
undergo a quarantine inspection. In 2002, the tariff quota for wool was 264,500
tons and for wool yarn, 72,500 tons. These figures will jump to 287,000 tons and
80,000 tons respectively in 2004. From 2002, the number of companies appointed
to trade wool, wool yarn and acrylic will also rise gradually. By 2005, trading
rights will be relaxed completely. While cotton imports will still be traded by
State-owned enterprises, with the increasing number of non-State-owned
enterprises, cotton import rights will also be opened gradually.
5. Progressively liberalize the right to trade
Gradually abolish the State-owned trading system of silk by increasing and
expanding trading rights. By January 1, 2005, completely abolish all active
restrictions on silk exports, including all procedural fees. After the WTO
accession, the State-owned trading system of the "two yarns and two fabrics" and
silk, and raw silk will be amended and trading rights will be opened to all
enterprises. Exports of cotton raw fabrics to Japan and Korea will still be
exported under a quota, and export licenses should be applied according to
relative regulations.
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