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U.S. and Mainland China Agree of End-of-December Deadline to Implement WTO Ruling on Agricultural TRQs

Mainland China and the United States have agreed that the recommendations of a World Trade Organisation dispute settlement panel regarding mainland China’s tariff-rate quotas on grain imports will be implemented by the end of this year. The United States had accused mainland China in 2016 of failing to properly apply its TRQs for rice, corn and wheat in line with WTO rules. Among other things, the U.S. Department of Agriculture claimed that mainland China may have imported as much as US$3.5 billion more of corn, wheat and rice in 2015 if it had filled its TRQs for those crops.

Last April, the WTO panel agreed with the United States that state trade enterprise usage requirements inhibited the usage of these TRQs. The panel found that “the disparity between what is written in China's legal instruments and what China states that the NDRC does in practice in allocating TRQ amounts does not represent administration in accordance with the applicable rules and standards.” On this basis, the panel found that mainland China “fails to administer its TRQs on a fair basis.”

Beijing opted not to appeal the panel ruling so the two sides had to agree to a “reasonable period of time” for mainland China to bring its policies in line with WTO rules. According to a WTO communication dated 4 July, the two sides agreed to an end-of-December deadline. If a WTO compliance panel later concludes that appropriate changes have not been made, the United States can ask to retaliate for the harm to its exports.

In a separate decision issued last February, the WTO also sided with the United States when it agreed that mainland China’s domestic support limits on certain grains had exceeded WTO rules. According to a WTO communication dated 12 June, the two parties have agreed to implement those recommendations by the end of March 2020.

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