import tariff quotas for agricultural products to be redistributed experts: focus on "standardization

Workers trial production in the workshop of Helan Park, Ningxia Ecological Textile Park. Photo taken by Xinhua News Agency reporter Wang Peng

In recent years, the cost of cotton and other agricultural products in China continues to rise rapidly, facing the impact of imports, the use of tariff quota system to properly regulate imports has become an effective choice. In order to make better use of import quotas, the NDRC allows qualified enterprises to apply for redistribution of import tariff quotas for agricultural products. Experts said that efforts should be made to regulate the issuance of tariff quotas fairly, justly and transparently.

According to the 2014 announcement on the redistribution of import tariff quotas for agricultural products issued by the National Development and Reform Commission, the inexhaustible import tariff quotas used by enterprises in 2014 should be returned by September 15, while enterprises that meet the requirements can apply for the redistribution of import tariff quotas for agricultural products.

Wang Sishe, vice chairman of Shandong Hengfeng Group, was very happy to hear the news. "Enterprises have not applied for cotton tariff quotas this year, and if there is a chance to redistribute them, we will certainly continue to apply." In recent years, applying for foreign cotton quota has been a major event for cotton enterprises. "the price of foreign cotton is cheaper than that at home. When it is high, the price difference between domestic and foreign cotton reaches 5000 yuan per ton, and under normal circumstances, there is also a difference of 2000 yuan to 3000 yuan." Wang Sishe said.

The price difference of several thousand yuan between domestic and foreign cotton sets the starting line for competition among cotton enterprises. For cotton spinning enterprises that account for 70% to 80% of the cost of raw materials, it can be said that whoever gets the quota will get the lead. "if you don't get the tariff quota, you have to pay high tariffs if you want to import cotton." Huang Weixin, chairman of Hunan Yintai Textile Group, said.

Lan Haitao, director of the rural office of the Institute of Industrial economy and Technology Economics of the National Development and Reform Commission, told the Economic Daily that the higher the market price of domestic agricultural products is, the more valuable the tariff quota will be. The domestic market price of cotton is obviously higher than the international price, so the cotton tariff quota is scarce. In a year when tariff quotas are scarce, agricultural products processing enterprises or trading enterprises that receive tariff quotas can reduce the cost of imported products, which in turn increases the profits and cost competitiveness of enterprises.

However, not all companies that need them can get quotas. Many cotton companies report that no matter how strong the desire is, it is difficult to get a quota even if it meets the conditions for applying for a quota.

According to the interim measures for the Administration of Import tariff quotas for Agricultural products, the import tariff quotas for agricultural products "will be allocated according to the number of applicants applied for and previous import performance, production capacity, other relevant commercial standards or on a first-come-first-served basis." The minimum amount allocated will be determined on the basis of commercially viable shipments of each agricultural product, and the relevant provisions in the 2014 Grain and Cotton Import tariff quotas, Application conditions and allocation principles are similar. Therefore, in general, enterprises with historical import performance and strong production capacity may easily obtain quotas.

"if there are too many qualified enterprises and too few quotas, the management will choose the best, and some enterprises with weaker conditions may not be able to get the quota; if they do not get the quota, when they apply again the following year, if there is a shortage of tariff quota indicators, those who have quotas and performance imports in the past will be given priority, which will also lead to the failure of reapplying for quotas." Lan Haitao said: at present, there are still some problems in import quotas, such as clandestine operation and resale of quota increases, which are difficult to monitor.

With the rising cost of labor, land and other factors in China, the cost of agricultural products such as cotton continues to rise rapidly, facing the impact of imported products. Therefore, with reference to international practice, it has become an effective choice to use the tariff quota system allowed by WTO to properly regulate imports, and it is also a common practice in many developed countries. Experts say that the key to creating a level playing field is not to abolish quotas, but to make efforts to regulate the issuance of tariff quotas in a fair, just and transparent manner.

Lan Haitao suggested that the improvement of the quota management system should pay attention to three aspects: first, to further clarify in detail the distribution standards of tariff quotas and their allocation methods. For example, the relevant departments can list what the "other relevant commercial standards" are and how to assign tariff quotas to enterprises according to these standards. The second is to announce the details of the application and use of tariff quotas to the public on a regular basis every year. We will establish an online publicity system for enterprises applying for tariff quotas in advance to accept social supervision and reports. After the completion of the tariff quota each year, the following year, the enterprises applying for the tariff quota last year and their conditions for reaching the standard, quota quantity, amount of use, return amount and other information shall be published. The third is to clarify the punitive measures for directly reselling tariff quotas in violation of laws and regulations.