A World Trade Organization (WTO) dispute settlement panel found that certain Chinese trade practices were inconsistent with WTO commitments. U.S. Trade Representative Robert Lighthizer and Secretary of Agriculture Sonny Perdue announced that the WTO panel found China had administered its tariff-rate quotas (TRQs) for wheat, corn, and rice in a manner that unfairly limited American grain farmers access to the Chinese market.
“Making sure our trading partners play by the rules is vital to providing our farmers the opportunity to export high-quality, American-grown products to the world,” Secretary Perdue said in a press release. “Today’s announcement is another victory for American farmers and fairness in the global trade system. We will use every tool available to gain meaningful market access opportunities for U.S. grains and other agricultural products.”
The panel found that China’s TRQ administration was not transparent, predictable, or fair, and ultimately inhibits TRQs from filling. China’s grain TRQs have gone underfilled for a number of years. If China’s TRQ’s had been used as intended and filled, USDA estimates that the country would have imported as much as $3.5 billion worth of corn, wheat, and rice in 2015 alone. This is the second recent victory against Chinese trade practices and their violation of WTO rules.
“This second important victory for the United States further demonstrates that President Trump will take all steps necessary to enforce trade rules and to ensure free and fair trade for U.S. farmers. The Administration will continue to press China to promptly come into compliance with its WTO obligations,” said Ambassador Lighthizer.
The U.S. originally brought the issue of Chinese TRQs for long-grain rice, short- and medium-grain rice, wheat, and corn to the attention of the WTO back in August 2017. The panel report shows that China administers its TRQs outside of Accession Protocol obligations. China was also found to allocate a significant portion of each TRQ to a designated state-trading enterprise which is not subjected to the same rules applied to non-state trading enterprises.