Interrelations Between China's Agricultural Products Tariff Concession And Import & Its Economic Influence

The ultimate goal of WTO multilateral negotiation is to enhance the trade liberalization, with the agriculture issue being the focus and the difficulty. For the first time, Uruguay round Agreement on Agriculture does bring agriculture trade into multilateral trade system rules, as well as promoting the development of international agricultural products trade. Since WTO's new round of multilateral negotiation started up at the end of 2000, agriculture remains the center of gravity and around the main idea of the Agreement on Agriculture, members of WTO have been continuing the arduous talks. Due to clear diverges in agricultural negotiation, the process of which was too slow to end up in 2005 as outlined in previous timetable. One key of the negotiation is the market access, which mainly touches upon how WTO members continue to make tariff concession to agricultural products import. Agricultural products trade liberalization necessarily results in Tariff Concession, which is the main part of agricultural products market admittance, and is important to WTO negotiation on agriculture as well. Direct or indirect, Tariff Concession to agricultural products nevertheless influences the market price of the importing countries, the interest of producers, well-being of customer and government's tariff revenue. Meanwhile, tariff concession owes to the domestic lowered protection level of the importing countries, therefore imposes certain impact on importing countries' agricultural products market. As a new member of WTO, China's policy on agricultural trade must obey WTO's rules, and its agricultural products tariff had made concession according to the mode stated in Agreement on Agriculture. During the new round of negotiation on agriculture, the issue on how tariff concession operates remains arousing all parts' attention. Each member has its own right to engage in developing the trade laws, so they put forward their overtures, with great enthusiasm, make clear positions and claims, and propose respective viewpoints. But there are clear diverges in mode choices.The paper aims to analysis influence of tariff concession to Chinese agriculture. Firstly, the research issue, the basic conception, the correlative theories, the framework of theoretic analysis and the background of research objects are introduced. Secondly, theory on endogenous tariff this paper establishes tariff equations on the basis of description to tariff and import, analysis interrelations between imports and tariff. Using the local equilibrium theory, the paper explores the economic influence caused by tariff concession to agricultural products; and quantitatively analyses the impact from the tariff concession policies on China's agriculture in virtue of the agricultural trade policy model. The advanced experiences and management models of other WTO members are compared and used for reference, and thus puts forward reasonable suggestions on adjustment in agricultural products tariff policies. Main contents and conclusions of the study are listed as follows:1. According to the non-ad valorem duties conversion principles as well as the real situation of tariff quota, it estimates China's agricultural products tariff through weight arithmetic average and simple arithmetic average. As a whole, for china's agricultural products tariff, it tends to drop step by step. The changes in tariff's structure not only show the decline in rate, but show more agricultural products carry on lower tariff and the concession to agricultural products tariff peak. Otherwise, the dispersion coefficient keeping around 0.6, there is no distinct changes in tariff structure, which indicates that too many tax items in China and existing clear diverges in tax rate between goods.2. The number of imported agricultural products in China kept good momentum, with 15.03% growth rate per year. Among all discrete coefficients, agricultural products' is the highest, which otherwise serves as a foil to the great fluctuation of the imported agricultural product of china. The paper uses trend decomposition method to combine China's agricultural products import amount with time and trend, and finds that even if the importation of the primacy products is in high frequency, where exists fixed and well-regulated cycle. At the same time the products structure of the importation of agricultural products in China shows its tendency to follow the structure of factor endowment of China's agriculture, and the trend is being strengthened further.3. Theoretical research and metrical analysis on the relationship between China agricultural products tariff and import. Establishing agricultural products import bill equation, estimating and obtaining the tariff elastic parameters by using panel data; establishing tariff equation according to tariff endogenous theory, and discussing other factors influencing tariff. Endogenous test of agricultural products import and tariff, and the result testified the endogenity. The presumption that tariff is usually exogenous and determined by the government subjectively has been changed. The result of group equation indicates that import inherently depends on tariff, GDP, the rate of exchange, price difference between domestic and international market; and that tariff inherently depends on import, financial support to agriculture, agricultural labor productivity, index of trade competition, the proportion of agriculture in national economy, the share of agriculture labor in whole labors, the proportion of non-agriculture income in household, and everyone capital density.4. The Uruguay round promoted the development of agricultural trade liberalization, however, agricultural policy reform was not thorough. After starting up a new round international agricultural policy reform, main member nations proposed actively many resolution of concession. Another important indication from China's tariff structural character is that: the wider a proposal spans, the more advantages China will gain. Using agricultural policy simulating model to conduct metrical analysis on the influence of agricultural tariff concession resolution during Uruguay round of negotiation on agriculture. The result of ATPSM simulating model indicates that Doha round of negotiation on agriculture imposed great influence on promoting the development of agricultural trade liberalization, as well as China's agriculture. Further reform on tariff policy does not have a clear influence on China's well-being. According to the US proposal, China's well-being will increase 720 million US dollars; according to the EU proposal, China's well-being will decrease 670 million US dollars; according to the G20 proposal, China's well-being will increase 240 million US dollars. As for the overall benefits, the US proposal is favorable to China. According to the US proposal, the increase of China's well-being is due to the surplus increase of customers, and China's government revenue (tariff revenue decreases) and workers' well-being decrease (which means workers' income probably decrease). According to the G20 proposal and the EU proposal, China workers' well-being will increase. Under the circumstances that our government pays a close attention to increasing income of farmer issue, our considerations about the effects of global agricultural reform may focus on workers' surplus; thus, the G20 proposal may be favorable to China.Finally, based on the conclusions of the whole paper, the paper puts forward the policy suggestions to adjust agricultural products tariff policies referencing management models of other members of WTO.