You are here

WTO finds fault with China's agricultural trade restrictions

doc74z729uf88y1lctvc4zi_doc74vjqnl0ihj1djpm813k.jpg
China used a flawed and opaque approach when it administered tariff-rate quotas for rice, wheat, and corn, the Geneva-based arbiter of global trade disputes said on its website.

[GENEVA] China didn't follow proper procedures when it imposed trade restrictions on agricultural imports, the World Trade Organisation said on Thursday in a ruling that bolsters President Donald Trump's dispute against Beijing.

China used a flawed and opaque approach when it administered tariff-rate quotas for rice, wheat, and corn, the Geneva-based arbiter of global trade disputes said on its website.

China's tariff-rate quota "administration contains legal flaws from the beginning through to the completion of the process," the text of the ruling said.

The decision could increase US farmers' access to China at a time when they are struggling to compete amid the fallout from Mr Trump's trade war. The US Department of Agriculture previously said that Beijing's actions prevented an additional US$3.5 billion worth of crops being imported into China.

sentifi.com

Market voices on:

The ruling "will help American farmers compete on a more level playing field," the Office of the US Trade Representative said in an emailed statement after the decision. "The administration will continue to press China to promptly come into compliance with its WTO obligations."

Either the US or China may appeal the case at any point in the next 60 days. If the ruling is upheld, China must revise its quota programmes or face the prospect of trade retaliation from Washington.

As part of China's WTO accession agreement, Beijing pledged to set specific quota levels for wheat, corn and rice by applying a lower tariff rate to imports up to a certain quantity and then applying higher duties to imports that exceed the threshold. The US complaint alleged China never reached its agreed-upon threshold despite lower global prices that favored the importation of grains into China.

The panel separately rejected US allegations that China violated its public notice obligation related to tariff-rate quotas. The US had alleged that Beijing's procedures were not clearly specified and prevented exporters from filling the quotas.

BLOOMBERG