US challenges China grain tariffs, subsidies
December 25, 2016
The U.S. is challenging China's administration of tariff-rate quotas (TRQs) for rice, wheat and corn in the World Trade Organization and, separately, has requested that the WTO establish a dispute settlement panel to examine China's level of domestic support for rice, wheat and corn producers, Trade Representative Michael Froman announced Dec. 15.
"Today's new challenge — as well as the steps we are taking to advance our case against China's excessive government support for rice, wheat and corn — demonstrates again the Obama administration's strong and continued commitment to enforcing the rules of global trade, and protecting the interests and livelihoods of American farmers," Froman said in a news release. "China's TRQ policies breach their WTO commitments and limit opportunities for U.S. farmers to export competitively priced, high-quality grains to customers in China. The United States will aggressively pursue this challenge on behalf of American rice, wheat and corn farmers."
The Agriculture Department estimates that China's TRQs for these commodities were worth more than $7 billion in 2015, according to the U.S. Trade Representative. If the TRQs had been fully used, China would have imported as much as $3.5 billion worth of additional crops last year alone, USTR said.
"Real access under tariff-rate quotas is vital to global trade and to providing our farmers and ranchers the opportunity to export high-quality, American-grown products to the world," said Agriculture Secretary Tom Vilsack. "Although China has become a significant market for our grain exports, we could be doing much better than we are today.
“Real access under tariff-rate quotas is vital to global trade and to providing our farmers and ranchers the opportunity to export high-quality, American-grown products to the world,”
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"When China joined the WTO, it committed to implementing an agriculture regime that would facilitate market access consistent with international obligations," Vilsack said. "However, China has frustrated exporters through generous price support and unjustified market restrictions. Taking action against grain price supports was one piece of the puzzle, and now we must confront China's improper administration of its TRQs to ensure that our grains have the meaningful market access that China bound itself to as a member of the WTO."
Congressional agriculture and trade leaders of both parties endorsed the USTR actions.
"In September, I joined in the bipartisan call for China to be held accountable to their World Trade Organization commitments. Today's enforcement action on China's administration of tariff-rate quotas for wheat, corn and rice appears to be yet another example of China's refusal to play by the rules," said Senate Agriculture Committee Chairman Pat Roberts, R-Kan. "I am committed to working with our producers and alongside USDA and USTR as we continue to fight for U.S. farmers' ability to compete in the global market on a level playing field."
"China continues to ignore the commitments it made in joining the WTO," said House Agriculture Committee Chairman Michael Conaway, R-Texas. "Not only is China unfairly subsidizing its producers to the detriment of American farmers, they are also refusing to provide the market access they promised. We have been sounding the alarm, and I am pleased to see USTR taking action to hold China accountable."
"I welcome this USTR action against China's misadministration of tariff-rate quotas for rice, wheat and corn. It is not the first — nor will it be the last — enforcement action brought against China, which routinely adopts protectionist policies ranging from unscientific regulations on biotech products to excessive market price supports for agriculture commodities," said Rep. Adrian Smith, R-Neb., a member of the House Ways and Means Committee and chair of the Modern Agriculture Caucus. "China represents a large and growing market for American producers, and our involvement in trade negotiations and institutions such as the WTO is what enables us to hold our trading partners accountable. We must continue to remain a vigilant and engaged actor in the international economy to ensure a level playing field for our farmers and ranchers."
"We need to hold China accountable for unfair trade practices that hurt American farmers," said Senate Agriculture Committee ranking member Debbie Stabenow, D-Mich. "I applaud the USTR for taking steps today to level the playing field so that our businesses can create jobs and compete in the global economy."
"An equal playing field is vital for America's farmers to compete in a global marketplace," said House Agriculture Committee ranking member Collin Peterson, D-Minn. "It is imperative that the United States take this action to hold China accountable for failing to meet WTO commitments."
"China's strategy of gaming the system makes it virtually impossible for Oregon wheat growers and other American farmers to get the market access China promised when it joined the WTO," said Senate Finance Committee ranking member Ron Wyden, D-Ore. "That access is essential to the livelihoods of farms and rural communities across the nation. Together with the action the administration took in September challenging Chinese agriculture subsidies, launching this case demonstrates that the United States will fight for fair trade for farmers and rural communities."
"Today we're again standing up and working to hold China accountable for cheating North Dakota farmers," said Sen. Heidi Heitkamp, D-N.D., a member of the Senate Agriculture Committee. "When China or any other country cheats on a trade agreement, they make it harder for North Dakota wheat and corn farmers to access markets and get fair value for our state's top-notch crops. This is the second time the U.S. Trade Representative has brought an agricultural compliance case against China this year, and that's good news for North Dakota farmers and rural communities — especially when commodities prices are already challenging." ❖