"It's definitely a step forward, something we welcome, we're looking forward to China's entry to the WTO," Warren Males, chief economist at Queensland Sugar Corp, said. Officials from other Australian agricultural export industries echoed Males' comment, while also warning that the administration of trade agreements would be crucial to access. Australian sugar, which has had mixed fortunes in getting into the China market in the 1990s, has scored an agreement with China to export up to 1.6 million tonnes a year at the reduced tariff of 20 per cent. A clause also allows for exports to rise by five per cent a year to 1.945 million tonnes by 2004. This compares with only 50,000 tonnes exported to China in 1998/99, and with a 1990s high of 6,38,500 tonnes in 1994/95. "China is potentially a major destination for Queensland sugar," Males said.

The agreement on Australian sugar comes into effect in 2000 to coincide with China's expected WTO entry.

China to finalise agreements worldwide
Australia's China access deals flow mainly from a bi-lateral agreement signed ahead of this week's agreement between China and the United States, which paves the way for China's WTO entry.

The US-China agreement, which cuts tariffs on the agricultural commodities to 14.5-15 per cent compared with a present overall average of 22.1 on all US goods, made no advance beyond the Australian deal on sugar. This leaves Australia's deal with China standing, as China carries out a complex series of negotiations virtually worldwide on bi-lateral agreements for its entry to the WTO. China's agreements were positive for Australian cotton exports, Gordon Cherry, chairman of the Australian Cotton Shippers Association, said.

"Anything that allows us to establish regular customers there rather than having barriers of tariffs or import licences barring our way is positive," he said. It was hoped agreements would lead to a regular flow of Australian cotton to China, overcoming swings in demand triggered by annual swings in Chinese crop production, he said. Australian cotton is presently effectively barred from entering China by a restriction on import licences. "Three years ago, sizeable quantities. Last year, much reduced. This is its basically zero," Cherry said.

Cherry said Australian cotton shipments to China were expected to re-start with China's entry to the WTO and with moves by the country to a more market-oriented system.

China to liquidate excess stocks
China, the biggest producer and consumer of cotton in the world, is in the process of liquidating excess stocks, opening the potential for imports perhaps from next year. Australian canola sales to China would theoretically gain from China's agreement to abolish state trading of soy oil, a senior Australian industry official said. But China's entry to the WTO was still theoretical, with passage through the US Congress still not assured and agreements remaining to be struck with other countries.