VVD Europarty on-line

WRITTEN QUESTION E-1289/03
by Elly Plooij-van Gorsel (ELDR) to the Commission

26 March 2003

Subject: Disruption of market access to the People's Republic of China for photographic products: specific import tariffs not complying with WTO agreements

Since 1997 the People's Republic of China has imposed an import tariff on photographic products, in the form of a specific duty calculated in renminbi per product unit (measured in square metres). In connection with its accession to the World Trade Organisation China has undertaken to phase out this specific tariff and replace it with an ad valorem tariff. These commitments are set out in the bilateral agreement between the European Union and China and in the protocol on China's accession to the WTO. In January 2002, however, China announced that it would maintain the specific import tariffs on photographic products. This is not compatible with the WTO agreements.

As an illustration, in 2002 China committed itself to a 42% ad valorem import tariff on rolls of 35mm film. However, in practice China has imposed a specific tariff of 155 renminbi per square metre. This has resulted in an effective ad valorem tariff of 89%. This specific tariff thus exceeds the authorised limit.

1. Is the Commission aware of these specific levies per product unit on various photographic products?

2. Does it consider that this constitutes an illegal tariff barrier under China's obligations within the World Trade Organisation?

3. Has the Commission already made a complaint to the authorities responsible in China?

4. If so, what has been their reaction? If not, why not, and does the Commission intend to take action in the near future?

E-1289/03EN
Answer given by Mr Lamy
on behalf of the Commission
(8 May 2003)

1. The Commission is aware that China chose to opt for specific duties rather than ad valorem rates for a number of products, including photographic products. It should be noted that China’s use of specific duties rather than ad valorem rates is not per se a violation of China’s World Trade Organisation (WTO) obligations (even if China’s commitments – the bound rates – are expressed using ad valorem values).

2. There would be a breach of China’s WTO commitments when the use of specific duties leads in practice to rates higher than the bound ad valorem rates. Following contacts with some companies, this seemed to be the case for a few specific rates concerning photographic products in 2002.

3. At the end of 2002 and following contacts with some companies on this issue, the Commission has raised the problem both bilaterally with the Chinese authorities and in the context of the Transitional Review Mechanism. This is a WTO mechanism established in the context of China’s accession, the objective of which is to review annually China's implementation of her WTO obligations.

It has to be noted that this issue has also been raised by Japan, which appears to be China’s trade partner with by far the main trade interest at stake regarding this issue.

4. The Chinese authorities undertook to seriously consider the request made by the Union and Japan, and we are thus awaiting the results of these official contacts.