Washington | Reuters — The United States on Tuesday launched a challenge to China’s price supports for domestic production of rice, wheat and corn at the World Trade Organization, charging that these far exceed limits that China committed to when it joined the WTO in 2001.
The U.S. Trade Representative’s office said China’s “market price support” for these grains was estimated to be nearly $100 billion above the WTO limits and constitutes an artificial government incentive for Chinese farmers to increase output (all figures US$).
“These programs distort Chinese prices, undercut American farmers, and clearly break the limits China committed to when they joined the WTO,” U.S. Trade Representative Michael Froman said in a statement. “We will not stand by when our trading partners fail to follow the rules like everyone else.”
The action marks the Obama administration’s 23rd trade enforcement challenge lodged with the WTO since 2009, and the 14th against China.
In a statement, President Barack Obama said the administration has “won every case that’s been decided” by the WTO.
“We’re confident the case we’re bringing today will be no different: it should bring an end to China’s illegal subsidies, remove significant barriers on American exports, and level the playing field for American farmers and their families who rely on the rice, wheat, and corn industries and the hundreds of thousands of jobs they help support,” Obama said.
In May, the administration sought a WTO dispute settlement panel to rule on its claims that China is unfairly continuing anti-dumping duties on U.S. broiler chicken products. That dispute is continuing, however, and China’s commerce ministry announced on Aug. 22 that it would extend the duties on U.S. broiler chickens for another five years.
Obama added that passage of the Trans-Pacific Partnership trade deal was needed to raise trading standards for an evolving global economy and warned that China was negotiating its own Asia trade deal.
“Unless we act now to set our own high standards, the fast-growing Asia-Pacific will be forced to play by lower-standard rules that we didn’t set. We can’t let that happen,” Obama said.
The USTR’s office said that according to its analysis, China’s domestic price supports for wheat, Indica rice, Japonica rice and corn have exceeded the 8.5 per cent “de minimis” level allowed under the WTO commitment for every year since 2012.
U.S. Agriculture Secretary Tom Vilsack said that U.S. agricultural exports to China, now more than $20 billion a year, could be larger if these supports were not in place.
— David Lawder is a Reuters correspondent covering international trade issues from Washington, D.C.