ARLINGTON, VA – The World Trade Organization’s (WTO) released today a long-awaited report on China’s compliance with its international obligations on the way it manages imports of corn, wheat and rice, and the report found that China fails to administer imports in a “transparent, predictable, and fair basis…” The end result is China’s policies hinder imports and are not in line with what China agreed to when it joined the WTO.
“Today’s panel report is a clear win for U.S. rice producers and exporters and comes quickly on the heels of the WTO finding earlier this year of excessive Chinese subsidies for rice and other grain production,” said USA Rice Chair Charley Mathews Jr., a California producer. “This is another example of the Trump administration holding China accountable to its WTO obligations and seeking market access for U.S. rice in China.”
In August 2017 the United States requested formation of a panel at the WTO to examine the compliance of the way China manages tariff rate quotas (TRQ) for the import of rice, wheat, and corn under China’s Accession Protocol. When China joined the WTO, it provided market access for the three grains via large TRQs, and the protocol required China to administer these TRQs in a transparent, predictable, and fair basis using clearly specified requirements such that these would not prevent the TRQs from filling.
The rice TRQ is 5.3 million metric tons annually, split evenly between private sector importers and the state grain traders. This total quota is also split 50-50 between long grain and non-long grain varieties. China is the world’s largest rice importer.
WTO guidelines provide China 60 days to appeal the panel report to the Appellate Body. If China does not appeal, the panel report can be adopted by the WTO’s Dispute Settlement Body and the “reasonable period” for China to come into compliance begins.
“Although the United States was not able to ship rice at the time the case was initiated, USA Rice was a strong supporter because we knew we would need a level administrative playing field if U.S. exporters were to be commercially successful once sales were possible,” according to Bobby Hanks, a Louisiana miller and Chair of USA Rice’s International Trade Policy Committee. “Now that Chinese importers can buy U.S. rice, we urge China to come into compliance with this WTO report, and with February’s report on domestic producer subsidies.”