U.S. Government Taking China to Task on Trade Distorting Policies

Sep 13, 2016
U.S. government and high-ranking congressional leaders join forces at today's announcement
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WASHINGTON, DC - USA Rice President and CEO Betsy Ward attended a press conference here today where the Obama Administration announced plans to launch a trade enforcement action against China at the World Trade Organization (WTO) challenging trade-distorting domestic supports for three key crops: corn, wheat, and rice.

In announcing the complaint, U.S. Trade Representative Michael Froman highlighted that in 2015 China's "market price support" for these products was estimated to be nearly $100 billion in excess of the levels China committed to when it joined the WTO.

"We will aggressively pursue this challenge on behalf of American farmers and hold the Chinese government accountable to the standards of fair global trade," said Ambassador Froman.

Ward said this latest action is just the first step in what could be a year-and-half long endeavor, but that the news is welcome for the signals it sends.

"We compete with China in some important regional markets, and there's no question that an economy as large as China's can have major trade-distorting impacts in the global agricultural sector," said Ward.  "Despite years of work by USA Rice and USDA to open the Chinese market, we still have no access for U.S. grown rice.  This enforcement action also sends a clear signal to other countries with whom we compete and who are not living up to their WTO obligations with regard to rice, such as Viet Nam, Thailand, and India."

Ward and Vetter

Ward and USTR Ambassador Darci Vetter

"USA Rice has asked our government for years to challenge countries who don't play by the rules, and we've provided them concrete evidence of harm being done by these countries to America's rice industry," she said. "It's gratifying to finally see some action."

Ward pointed to a 2016 Texas A&M study that 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.

"Under those models, U.S. rice exports rose 18 percent and farm gate prices rose nine percent," Ward added. "That's real money."

There is no indication yet how China will react to the case. USA Rice and USDA have been pressing for years for a phytosanitary deal to open the Chinese market to U.S. rice. "The phytosanitary deal is purely technical in nature and it has been completed on the U.S. side for months. We will continue to work with USDA and believe the agreement can and should be signed despite today's action," Ward said.

During today's press conference, Secretary of Agriculture Tom Vilsack stated, "This case is an important message to all WTO members that they must take their WTO obligations seriously."

Bipartisan support for the Administration's action demonstrates the importance of enforcing current and future trade deals. "We see this as a first step to bringing offending countries into compliance," said Ward.