April 24, 2019

WTO finds China breaches trade commitments with tariff rate quota system on grain

A World Trade Organization (WTO) dispute settlement panel found that China has administered its tariff-rate quotas (TRQs) for wheat, corn, and rice inconsistently with its WTO commitments.

According to the U.S. Department of Agriculture, China's grain TRQs have annually underfilled. The Department estimates that if China's TRQs had been fully used, it would have imported as much as $3.5 billion worth of corn, wheat and rice in 2015 alone.

In August 2017, the United States requested that the WTO establish a dispute settlement panel to consider whether China administers its TRQs for long-grain rice, short- and medium-grain rice, wheat, and corn in a manner inconsistent with its WTO commitments.

The WTO panel report says that "China's administration of its wheat, rice, and corn TRQs is, as a whole, inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis, to administer TRQs using clearly specified requirements and administrative procedures, and to administer TRQs in a manner that would not inhibit the filling of each TRQ."

Link: WTO issues panel report