WTO Rules Against Chinese Rice and Wheat Price Supports

(URBANA, IL) A recent World Trade Organization (WTO) dispute panel ruled against China’s market price support for wheat, rice, and corn over a four-year period (2012-2015). The U.S. initiated the dispute claiming that China’s support for each grain exceeded the level allowed by its commitment under their WTO Agreement in each of the four years. The panel determined that China exceeded its limits for wheat and rice each year by an average of $20.6 billion but it did not make an assessment for corn. Based on the panel’s conclusion about the base years for China’s fixed external reference prices, China may be able to stay within its WTO limits by including in its legal instruments caps on the maximum quantities the government will purchase at set prices explains Dr. Carl Zulauf with Ohio State. If China keeps domestic grain prices above world levels, the U.S. and other exporters will have an ongoing interest in China meeting its WTO commitments for market access under its tariff rate quota obligations he says. From a broader perspective, however, the panel findings clarify how to interpret the WTO Agreement on Agriculture. Read more here from FarmDoc: https://farmdocdaily.illinois.edu/2019/03/wto-dispute-panel-report-on-chinas-agricultural-support.html