Feb 28, 2019
WASHINGTON, DC -- The World Trade Organization's (WTO) dispute panel today announced its ruling that China's domestic subsidies for rice, wheat, and corn are in violation of its WTO obligations.
"USA Rice is pleased with this outcome," said USA Rice COO Bob Cummings. "The ruling from the WTO has been anticipated for several years, with USA Rice beginning work on combating illegal foreign domestic subsidies in 2011."
Over-subsidized production and exports have the effect of suppressing global rice prices, leading to unfair competition in key U.S. rice export markets, as well as within the domestic market.
The economic impacts of China's practices are enormous. In 2015, the year before the WTO case was filed, China's "market price support" for rice, corn, and wheat was estimated to be nearly $100 billion in excess of the levels China committed to when it joined the WTO.
A 2016 Texas A&M study showed if rice subsidies were removed in China and other advanced developing counties, production in China would drop by as much as four percent and imports would increase nearly four-fold as their prices came more in line with world rice prices. As the top producer and consumer of rice, the impact this reckoning would have cannot be overstated.
"The WTO ruling vindicates the USA Rice stance that China has for years been undertaking excessive and illegal support programs, and it will set a precedent for the future," said Cummings. "Many other countries are believed to be subsidizing their agricultural producers in excess of their WTO commitments, and we believe this ruling is a compelling reason for them to curb these practices."
"Subsidies by foreign countries in excess of WTO imposed limits hurt U.S. agriculture and we are grateful to the Administration for continuing to pursue this case," said Charley Mathews, Jr., a California rice farmer and chair of USA Rice. "With about half of our crop exported in any given year, these steps toward leveling the international playing field have enormous consequences for us."