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New WTO Case Against China Linked to TPP Efforts

Thursday, September 15, 2016
Sandler, Travis & Rosenberg Trade Report

The U.S. launched a trade enforcement action at the World Trade Organization Sept. 13 challenging China’s use of market price support for the production of rice, wheat, and corn. The Obama administration portrayed the case as evidence of its commitment to trade enforcement as part of its ongoing effort to secure congressional approval of the Trans-Pacific Partnership before the end of the year.

According to a press release from the Office of the U.S. Trade Representative, China appears to provide agricultural domestic support to long grain rice, short and medium grain rice, wheat, and corn in excess (by nearly $100 billion in 2015) of its aggregate measurement of support commitments under the WTO Agreement on Agriculture. China maintains this support through market price support programs in which it announces on an annual basis the minimum prices at which the government will purchase these commodities in major producing provinces during the harvest season. Through this program, USTR states, China has maintained domestic prices at levels above world market levels since 2012, “influencing domestic production decisions and distorting the Chinese market.”

The press release characterizes the new case as a continuation of the administration’s “strong record” of enforcing U.S. rights under its trade agreements and says it “indicates the resolve that the United States would bring to enforce the high standards won in the Trans-Pacific Partnership.” However, that point may not do much to sway those members of Congress who have signaled their opposition to TPP based on other specific issues.

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