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2022

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07

China Ratifies Successful Completion of FTA Feasibility Probe in Uruguay

Source:

The Uruguayan government announced that it has completed a joint feasibility study for a free trade agreement with China. According to the current volume of beef trade between China and Uruguay, its beef imports in the Chinese market may reduce tariffs by $150 million.

The Uruguayan government announced that it has completed a joint feasibility study for a free trade agreement with China. According to the current volume of beef trade between China and Uruguay, its beef imports in the Chinese market may reduce tariffs by $150 million.

 

The Ministry of Commerce in China confirmed the news at a regular press conference.

 

The spokesperson Shu Jueting said that China attaches great importance to establishing free trade relations with Uruguay. Two sides have cooperated closely and carried out relevant research work since Sept last year. At present, the joint feasibility study has been successfully completed. We will continue to actively communicate and discuss the promotion of China-Uruguay free trade cooperation in the next step. At the same time, we are open to negotiating free trade agreements with other Mercosur members.

 

China has become the main destination for Uruguay's meat exports. From Jan to Dec 2021, Uruguay’s exports of beef, lamb, offal and meat by-products to China reached $1.819 billion, accounting for 60% of the export value. Of these, beef was the most exported product, reaching $ 1.45 billion during the aforementioned period. 

 

Growing importance attaches to the Chinese market over the past 10 years: in 2010 China accounted only for 10% of the export value, while in 2021 this market share surged to 60%. Its mutton and by-products are particularly dependent on China: 84% and 94% of the total export volumes, respectively.

 

The total tariffs paid have also grown in step with the export volumes: between 2013 and 2020, total tariffs on beef, lamb and offal from this market rose by 166% to $104 million, and in 2021 it hit $188 million.

 

At present, China has no tariff preference for Uruguayan meat, in which market beef pays a 12% tariff, while relevant exporting countries such as Australia and New Zealand pay 3.3% and 0% tariffs for free trade agreements with China, respectively. The signing of the free trade agreement means that Uruguay meat products may further gain a competitive advantage.

 

According to a study conducted by the National Meat Institute of Uruguay in 2021, if China signs a free trade agreement with Uruguay, the meat industry can implement a 0% preferential tariff, which will reduce tariffs by 150 million US dollars.