US Files WTO Complaint Over Chinese Domestic Ag Subsidies
The U.S. filed a complaint at the World Trade Organization alleging that China provided subsidies in 2015 for domestic production of rice, wheat and corn, totaling $100 billion in excess of its commitments under WTO rules, U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack announced Sept. 13 (here). The policy bloats Chinese prices above normal market levels and constitutes an unfair incentive for Chinese farmers to boost production, the Office of the U.S. Trade Representative said in a statement. “Through tariff cuts and the removal of other trade barriers, China has gone from a $2-billion-a-year market for U.S. agricultural products to a $20-billion-plus market,” Vilsack said in a statement. “But we could be doing much better, particularly if our grain exports could compete in China on a level playing field. Unfortunately, China’s price supports have encouraged wheat, corn and rice production in China that has displaced imports.” The policy has injured U.S. producers, who could meet Chinese import demand if China were to follow through with a WTO- and market-oriented agriculture trade policy, Vilsack added.
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Several Democratic and Republican congressional lawmakers responded warmly to the news, from Sen. Heidi Heitkamp, D-N.D., to House Agriculture Committee Chairman Michael Conaway, R-Texas, with many legislators taking jabs at China, as they joined Froman and Vilsack during the announcement. President Barack Obama in a statement (here) said U.S. leadership in setting high global trade standards through efforts like this WTO action are yet another reason why the U.S. should ratify the Trans-Pacific Partnership. “It’s all the more important that we finalize TPP soon, because as we speak, China is negotiating a trade deal of its own -- one that would carve up the growing Asia-Pacific markets at our expense, risking American jobs, businesses, and goods,” Obama said. “Unless we act now to set our own high standards, the fast-growing Asia-Pacific will be forced to play by lower-standard rules that we didn’t set. We can’t let that happen."