March 1, 2019

WTO rules China provides excessive government support to its grain producers

A dispute settlement panel from the World Trade Organization (WTO) ruled that China provides domestic support to its agricultural producers that is well in excess of its WTO commitments.

The panel decision come from a complaint filed by the United States in December 2016. The U.S. asserted that 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. Under WTO rules, China may provide non-exempt support up to the de minimis level of 8.5 percent of the value of total production of a particular commodity, a commitment set out in China's WTO accession agreement.

In its decision this week, 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. 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 changed its program in 2016, just prior to the WTO's establishment of the panel.

Link: WTO issues panel report regarding Chinese agricultural subsidies