MarketsFarm — The World Trade Organization (WTO) has ruled largely in favour of the United States in a trade dispute regarding China’s application of tariff rate quotas (TRQs) for wheat, corn and rice.
The ruling, issued by the WTO’s Dispute Settlement Body (DSB), stated China did not apply the TRQs on imports of wheat, rice and corn from the U.S. on a “transparent, predictable and fair basis.” China could have imported more of those commodities from the U.S.
In the dispute, China contended it only needed to give public notice on the total amount of the TRQs made available, not the amounts actually allocated to the U.S.
The DSB stated in its ruling that China did provide public notice for the total TRQ amounts available for allocation each year. However, the body found China did not do so for TRQs that were allocated, unused and returned.
The U.S. Department of Agriculture (USDA) estimated US$3.5 billion of corn, wheat and rice could have been imported by China in 2015, if the latter applied the TRQs in a proper manner.
It wasn’t until December 2016 that the U.S. requested consultations with China regarding the latter’s application of TRQs. Eight months later the U.S. turned to the WTO to settle the matter, and submissions from the U.S. and China were made during the spring of 2018. Hearings were held during that summer and fall, and in March the U.S. and China reviewed the body’s findings.
The ruling pertains to state and non-state trading enterprises.
“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,” U.S. Agriculture Secretary Sonny Perdue said in a USDA press statement.
However, the DSB’s ruling was based only on the agreement to which China joined the WTO. The DSB ruled against the U.S. when it came to further complaints filed under the 1994 General Agreement on Tariffs and Trade.
— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.