China started to launch trade remedies for
out-of-quota imported sugar in May 22, 2017. This policy is valid in the
following three years, ranging from May 22, 2017 to May 21, 2020. During this
time, the safeguard measures towards imported sugar become more flexible. According
to the safeguard measures of tariffs, the one regarding imported sugar that is
out of quota keeps reducing to 95%, 90% and 85% during the three years respectively.
However, there is a condition for products
imported from developing countries or regions. If these imports account for no
more than 3% of all national imports, and if the total imports from these
countries account for no more than 9% of all national imports, then these
safeguard measures will not be applied. Importers should provide the certificate
of origin from those countries and regions in which the safeguard measures
cannot be applied.
The safeguard tariff rate is 35% from May
22, 2019 to May 21, 2020, down from 45% from May 22, 2017 to May 21, 2018 and
40% from May 22, 2018 to May 21, 2019. Since China joined the World Trade
Organization, the in-quota and out-quota rates of the tariff on imported sugar
for the most-favored-nation treatment have been steady at 25% and 50%
respectively. The safeguard policy issued in 2017 is the first adjustment of
the tariff on imported sugar since then. The import tariff on out-of-quota sugar
has declined to 85% after May 22, 2019. Compared to Brazil and Thailand, where
it is 90%, the cost of import has reduced to about RMB 100-150 per ton.
Concerns from Brazil regarding China's
sugar trade policy probably the reason for reducing tariff
The decline in tariff on imported sugar
that is out-of-quota is probably related to news from Brazil. According to news
agency Reuters in Brazil, MAPA indicates that Brazil will ask the WTO to revoke
the investigation into the trade policy towards China after reaching an
agreement on the tariff on sugar. Brazil will not seek help from the WTO to
investigate China's trade policy on sugar in order to moderate the commercial
relation between China and Brazil. Even though China has not yet clarified its
own position, it is obvious that China will make a concession in that it is
necessary to become an international partner with more countries, considering
the current tense situation with America.
Analysts of the sugar stock market think
that the trade protection between China, India, Thailand as well as other
countries might become one of the reasons why the price of sugar may drop
globally. Earlier, Brazil raised some questions on trade policies in the WTO. The
price of sugar stays at the lowest level within ten years. The increase in the
number of productions in India and Thailand leads to the growth in global
supply. Brazil reduced nearly 10 million tons of sugar production from last
quarter, losing the title of the largest sugar-producing country in the world to
India, which takes its place.
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