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BCN-16
US-CHINA-TRADE-WTO
WTO largely sides with US in dispute over China grain import tariffs
GENEVA, April 19, 2019 (BSS/AFP) – The World Trade Organization on
Thursday largely sided with the United States in its Obama-era case against
Beijing over Chinese restrictions on imports of American grain.
The WTO decision was the second in as many months to favor Washington’s
position on trade with China in grain.
Back in December 2016, Washington filed a complaint with the global trade
body over what it claimed were illegal Chinese restrictions on imports of
American rice, wheat and corn, describing China’s use of the so-called
tariff-rate quota (TRQ) system as “opaque and unpredictable”.
Washington estimated at the time that American farmers could have exported
some $3.5 billion more of such crops to China if the system had been used
properly, and charged that Beijing had violated its commitments under
international trade rules.
A panel of experts established by the WTO’s Dispute Settlement Body agreed
Thursday that China had failed to adhere to the commitments it made when it
became a WTO member in 2001 to administer the TRQs on a “transparent,
predictable, and fair basis”.
But the panel said the US had failed to show that China violated its
public notice obligation under the General Agreement on Tariffs and Trade
(GATT) in respect to TRQs.
US officials hailed the panel’s decision on Thursday.
“The administration will continue to press China to promptly come into
compliance with its WTO obligations,” US Trade Representative Robert
Lighthizer said in a statement, joined by Agriculture Secretary Sonny Perdue.
TRQs are two-level tariffs, allowing for a limited volume of imports to
come in at a lower “in-quota” tariff level, and all other imports charged at
an often much higher “out-of-quota” tariff.
Countries like China that joined the WTO after its creation in 1995 have
had their TRQ commitments set out in their accession agreements.
When China joined the WTO, it agreed to allow 2,660,000 metric tonnes of
short and medium-grain rice and the same amount for long-grain rice, as well
as 9,636,000 metric tonnes of wheat and 7,200,000 metric tonnes of corn to
enter the country at the lower duty rates.
Both sides have up to 60 days to appeal Thursday’s ruling.
China is the world’s largest producer of wheat and rice, holding
significant sway over world markets.
The news of the WTO ruling comes as Washington and Beijing strive to reach
a new trade agreement to avoid escalating their trade war.
The two sides have imposed tariffs on more than $360 billion in two-way
trade since last year, weighing on both countries’ manufacturing sectors and
unnerving global stock markets.
BSS/AFP/HR/1020