US Wins Another Agricultural Case Against China at WTO

The World Trade Organization said China is not living up to its promises in how it uses tariff rate quotas for wheat, corn and rice, giving the U.S. a second victory in agriculture disputes with China. China may appeal the panel finding. The WTO said that the fact that state-trading enterprises are given specific shares of the lower-duty import quotas, but that those enterprises don't always use all of the quota, and it is not reallocated to other buyers, means that China restrains the filling of its tariff rate quotas.

The U.S. Department of Agriculture estimates that if China’s TRQs had been completely filled, China would have imported up to $3.5 billion worth of corn, wheat and rice in 2015. The Office of the U.S. Trade Representative says the quotas consistently do not fill. In 2017, China set TRQs at 9.6 million tons of wheat, 90 percent reserved for state traders; 7.2 million tons of corn, 60 percent reserved for state traders; and 5.3 million tons of rice, 50 percent reserved for state traders.

The WTO also said the administration process for TRQs is not transparent, predictable or fair. It did not rule on the U.S. claim that there are restrictions on the importation of these commodities other than duties.

Agriculture Secretary Sonny Perdue said, "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. 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."