The United States initiated a trade enforcement challenge in the WTO concerning China’s tariff-rate quotas for rice, wheat and corn, which it alleges breach the country’s WTO commitments and undermine American farm exports.
The United States has initiated a trade enforcement challenge in the World Trade Organization (WTO) concerning China’s exploitation of its tariff-rate quotas (TRQs) for rice, wheat and corn.
The United States said the TRQs breach China’s WTO commitments and undermine American farm exports.
According to the U.S. Department of Agriculture, China’s TRQs for these commodities were valued at more than $7 billion in 2015. If the TRQs had been fully used, China would have imported as much as $3.5 billion worth of additional crops last year alone.
“Although China has become a significant market for our grain exports, we could be doing much better than we are today,” said U.S. Agriculture Secretary Tom Vilsack. “When China joined the WTO, it committed to implementing an agriculture regime that would facilitate market access consistent with international obligations.
“However, China has frustrated exporters through generous price support and unjustified market restrictions. Taking action against grain price supports was one piece of the puzzle, and now we must confront China’s improper administration of its TRQs to ensure that our grains have the meaningful market access that China bound itself to as a member of the WTO,” he added.
Separately, the Office of the U.S. Trade Representative also asked the WTO to establish a dispute settlement panel to examine China’s level of domestic support for Chinese producers of rice, wheat and corn. USTR launched a WTO challenge on this matter in September 2016, noting that China’s market price support for these commodities was estimated to be nearly $100 billion in excess of its WTO commitments.
According to USTR’s analysis, “China’s domestic support measures and non-transparent TRQ regime work together to distort global markets for wheat, rice and corn. Compliance with WTO rules would lead to a reduction in the excessive domestic support provided to China’s grains producers to bring Chinese production in line with market forces, and improvements to China’s TRQ administration would facilitate market access for U.S. and other exporters of these commodities.”
USDA noted that U.S. rice, wheat and corn exports worldwide have averaged $20 billion per year. These exports produce an estimated $70 billion in economic activity and support 200,000 American jobs.
U.S. takes on China’s rice, wheat and corn quotas
