WTO Concurs Mostly With US Challenge of China Supports To Farmers

China's support for its agricultural producers has been an issue spanning two U.S. administrations and a dispute settlement panel at the WTO has mostly sided with U.S. contentions that China is exceeding commitments it made when it joined the world trade body. For 2012 through 2015, China "provided domestic support... in the form of market price support to producers of wheat, Indica rice and Japonica rice in excess of its commitment level," a dispute settlement panel report distributed today (February 28) stated, noting that China "acted inconsistently with its obligations." However, relative to the U.S. case that China exceeded its support commitments on corn, the WTO said, "The panel declined to rule on China's subsidies for producers of corn on the grounds that the measure at issue had already expired before the initiation of the dispute." Australia, Brazil, Canada, Colombia, Ecuador, Egypt, El Salvador, the European Union, Guatemala, India, Indonesia, Israel, Japan, Kazakhstan, the Republic of Korea, Norway, Pakistan, Paraguay, the Philippines, the Russian Federation, the Kingdom of Saudi Arabia, Singapore, Chinese Taipei, Thailand, Turkey, Ukraine, and Viet Nam notified their interest in participating in the Panel proceedings as third parties. Key in the dispute was the calculation of the value of China's market price support (MPS) provided to producers of wheat, rice and corn, a summary of the panel's findings said. While this dispute result covers supports for domestic agriculture, there is still an ongoing dispute result awaited on the operation of import tariff-rate quotas (TRQ) by China for corn, wheat and rice. U.S. Trade Representative Robert Lighthizer told lawmakers in a hearing Wednesday that the U.S. is also trying to address these WTO complaints in the context of the U.S.-China trade negotiations. The positive ruling on wheat and rice supports could give the U.S. some ammo, but it is likely that the TRQ issue could be more relevant to the Sino-U.S. trade prospects.