World Trade Organization officials ruled earlier this week that the Chinese government over-subsidized the country’s grain producers, artificially raising Chinese prices for grain and reducing imports.
The WTO’s panel report “is a significant victory for U.S. agriculture that will help American farmers compete on a more level playing field,” USDA officials said Thursday in a press release.
This dispute is the first to challenge China’s agricultural policies “that disregard WTO rules and shows that the United States will take whatever steps are necessary to enforce the rules and ensure free and fair trade for U.S. farmers, ranchers, workers, and businesses,” USDA officials said.
In December 2016, U.S. officials requested that the WTO establish a dispute settlement panel to consider whether China provides “market price support” for Indica (long-grain) rice, Japonica (short- and medium-grain) rice, wheat, and corn in excess of China’s domestic support commitments.
“The United States proved that China for years provided government support for its grain producers far in excess of the levels China agreed to when it joined the WTO,” said U.S. Trade Representative Robert Lighthizer. “China’s excessive support limits opportunities for U.S. farmers to export their world-class products to China. We expect China to quickly come into compliance with its WTO obligations.”
The panel report agreed with the United States that China provided domestic support to its agricultural producers in 2012, 2013, 2014, 2015, well in excess of its WTO commitments. Specifically, the panel found that China had provided support in excess of permitted levels for Indica (long-grain) rice, Japonica (short- and medium-grain) rice, and wheat, in every year. Each finding individually established that China broke its overall agricultural domestic support commitment for agricultural producers.
For corn, the panel declined to make findings on the support provided to corn in 2012-2015 given that China had apparently changed its program in 2016, just prior to the WTO’s establishment of the panel.
“We know that America’s farmers and ranchers thrive in a market-oriented, rules-based global economy. That means all countries must play by the rules, which is why this finding is so important to U.S. agriculture,” said U.S. Agriculture Secretary Sonny Perdue.
