The Agricultural Trade Policy Reform And Its Impacts On Agricultural Trade Between China And EU

The signature of the Uruguay Round Agreement on Agriculture (URAA) and the current Doha Round negotiation have deep influence on agricultural trade policy reform in different countries. The agricultural trade tends to be more liberalized. The reform of China's agricultural trade policy includes the following aspects: 1. Strengthening the support to agriculture, implementing price support measures to key agricultural products and direct subsidies to farmers. 2. China also emphasized on healthy and harmony development in rural area. 3. Agricultural import tariff has been cut significantly. 4. China continues to use Tariff Rate Quotas (TRQs) and State Trading to manage trade for some 'important' agricultural products. 5. Non-tariff measures affecting agricultural import have been regulated. 6. China also takes some measures to promote the export of some agricultural products with high comparative advantages. The adjustments of EU agricultural trade policy include: Reform the CAP (Common Agricultural Policy) with the introduction of the single payment scheme. This payment is not based on prices or production. The market price support measures were reduced. The requirements to keep all farmland in good agricultural and environmental condition ('cross-compliance') have been imposed for the provision of the subsidies. The greater emphasis was put on rural development policy with 'modulation' and new measures to support the environment; The import tariff was cut, export subsidies reduced, but the TBT measures are reinforced.The agricultural trade between China and EU develops very fast after China's accession into WTO. The major categories of Chinese agricultural products exporting to EU are aquatic products, vegetables and fruits, non-edible livestock products and so on which are labor-intensive products. China mainly imported from EU dairy products, beverage and cereal etc. The paper analyzed the main contents of reforms of agricultural trade policy and their actual effects both in EU and in China by comparative approach. The theoretical analysis and Gravity Model are adopted to study the impacts of agricultural trade reform on agricultural trade between China and EU. Constant Market Share (CMS) Model is used to determine the influential factors on the increase of agricultural export from China to EU. Furthermore, in order to explore China's future trade policy reform, the thesis also utilized the historical analytic approach to study the experience of EU agricultural trade reform.The conclusions of this dissertation can be summarized as follows: China's entry into WTO promote significantly the agricultural trade between China and EU. China has enhanced its international competitiveness due to agricultural trade policy reform during the post-WTO period. China has lowered its market access level, and further opened its agricultural market to the world; CAP reform in EU decreased the trade distortion, but has only limited influence on the trade of certain agricultural products. In general, the transformation of trade policy in EU promoted the development of agricultural trade between China and EU. But more and more strict standard on food safety in EU constituted substantial obstacle for China's agricultural export to EU. The paper put forward some policy measures to develop China's agricultural trade with EU. Firstly, China's trade policy system should be optimized and integrated. China should optimize the support system to agriculture, provide the price support to 'important' products, give further direct subsides to grain producers, and adjust the structure of general services support to agriculture. China should also integrate its agricultural import policies, paying more attention to the sustainable development of agriculture and rural areas. Secondly, China's trade policy should facilitate the export of those agricultural products for which China have comparative advantage to EU. For this purpose, some sanitary and quality control measures should be strengthened. In addition, more support should be provided on export promotion and information technology adoption. Thirdly, China should improve the export structure of agricultural products to EU, and expand also the export of the technology-intensive products and processed products.