The United States is challenging China in the World Trade Organization over what it views as excessive “market price support” for rice, wheat and corn production.
The United States is challenging China in the World Trade Organization (WTO) over what it views as excessive “market price support” for rice, wheat and corn production.
In 2015, China’s market price support for these crops is estimated to be about $100 billion in excess of the levels China committed to during its WTO accession, the Office of the U.S. Trade Representative (USTR) pointed out.
“China’s excessive market price support for rice, wheat and corn inflates Chinese prices above market levels, creating artificial government incentives for Chinese farmers to increase production,” USTR said.
“These programs distort Chinese prices, undercut American farmers, and clearly break the limits China committed to when they joined the WTO,” said U.S. Trade Representative Michael Froman in a statement.
“Through tariff cuts and the removal of other trade barriers, China has gone from a $2-billion-a-year market for U.S. agricultural products to a $20-billion-plus market,” added Agriculture Secretary Tom Vilsack. “But we could be doing much better, particularly if our grain exports could compete in China on a level playing field. Unfortunately, China’s price supports have encouraged wheat, corn and rice production in China that has displaced imports.”
This trade enforcement action marks the 14th complaint brought by USTR against China at the WTO since 2009.
Numerous lawmakers on Capitol Hill back the White House’s action in the WTO.
“Not only does China refuse to abide by the commitments it made in joining the WTO, it attempts to obscure its illegal actions by consistently failing to even report on the support it is providing to its farmers,” said House Agriculture Committee Chairman K. Michael Conaway. “The actions of the Chinese government – and increasingly those of other advanced developing countries – are having a detrimental impact on America’s farmers and ranchers.”
“On top of challenging commodity prices, North Dakota farmers shouldn’t have to deal with China breaching trade commitments and making it tougher for us to get market value for our crops,” said Sen. Heidi Heitkamp (D-N.D.) member of the Senate Committee on Agriculture, Nutrition and Forestry. “When countries cheat on trade agreements and distort global markets, we need to hold them accountable, and that’s what the U.S. Trade Representative and the Secretary of Agriculture are doing today.”
According to USTR, China provides agricultural domestic support to Indica rice (long grain), Japonica rice (short and medium grain), wheat, and corn in excess of its Aggregate Measurement of Support commitments under the WTO Agreement on Agriculture. China maintains this support through so-called “market price support” programs.
“China committed through its WTO Schedule not to provide trade-distorting domestic support, except for domestic support at or below a de minimis level of 8.5 percent for each agricultural product. China, however, has provided domestic support for each product – Indica rice, Japonica rice, wheat and corn – substantially above the 8.5 percent de minimis level. In fact, in 2015, the level of support provided through these programs in excess of China’s commitment was nearly $100 billion,” USTR explained.
USTR noted that U.S. rice, wheat and corn exports average about $20 billion per year and contribute another $70 billion to the nation’s economy each year.
U.S. takes on China in WTO over rice, wheat and corn
