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Tuesday, 21 May, 2002, 11:18 GMT 12:18 UK
China hints at protectionism
Chinese farmer
China says it can help its farmers within the WTO rules
China has indicated that it might follow the US example and offer assistance to its farmers.

China insisted that the recent adoption by the US of a farm bill has paved the way for others to introduce similar measures.

Chinese mobile phone advert
China has liberalised many of its markets
The bill includes large scale subsidies and protects US agriculture against international competition.

"After the US congress adopted such a bill, why can we not do similar things?" asked Foreign Trade and Economic Cooperation Vice Minister, Long Yongtu.

Observers say the trade barriers raised by the US farm subsidies could put extra pressure on Chinese farmers and force the government to step in to help them, for example by cutting taxes.

"We can provide additional support to the agricultural sector without flouting World Trade Organisation (WTO) rules," Mr Long told an economic forum in Washington.

Agriculture exemptions

There is broad acceptance within the WTO that free global trade in farm products is a long way off.

Chinese President Jiang Zemin with U.S. President George W. Bush
The US has taught China a thing or two
The incoming director general of the free trade promoting body, which last autumn accepted China as a member, said the agricultural sector will be treated differently from other sectors.

"When you deal with industry, there is no so-called cultural diversity factor," said Supachai Panitchpakdi, who takes over at the helm of the WTO in September.

"For industry, we have opened up every bit and piece of the sector, with the exception of textiles," he said in a speech at Hong Kong University.

Complaints

But given that agriculture is central to the culture of many countries, the WTO will have to deal with "non-trade concerns" when the sector is considered, he insisted.

"This signifies that agriculture can't be dealt with according to the same lines as industry is dealt with," he said.

This does not mean that agricultural products are exempt from WTO rules.

In the past, bananas have been the subject of large-scale trade wars.

And formal complaints have been made to the WTO about the US Senate's decision last week to pass a subsidy bill that offers US farmers $173.5bn (118.7bn) over ten years.

Reduced subsidies

In his speech in Washington, Mr Long was scathing, both about the US move to protect its farmers and about the country's recently introduced steel imports tariffs.

Mr Long described the US moves to raise trade barriers as embarrassing, especially given that China is quickly lowering its own protection measures.

The US has responded to the criticism of its farm bill by insisting that it was introduced in part in response to high farm subsidy levels in the European Union.

The move did not, said US Trade Representative Charlene Barshefsky, mean that Washington does not remain committed to reduced subsidies.


World trade talks

Farming

Steel wars

Other disputes

Regional trade deals

Background

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See also:

15 May 02 | Business
10 May 02 | Business
13 Dec 01 | Business
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