US launches trade case against China over ag products

The Obama Administration on Tuesday launched a new case at the World Trade Organization (WTO) challenging China’s excessive government support for rice, wheat and corn.

U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack said that China’s government programs provide billions in market price support for key crops to the detriment of U.S. farmers.

{mosads}“These programs distort Chinese prices, undercut American farmers and clearly break the limits China committed to when they joined the WTO,” Froman said.

“As this administration has consistently and repeatedly shown, we will not stand by when our trading partners fail to follow the rules like everyone else,” he said.

The trade enforcement action is the 14th complaint brought by the USTR against China at the WTO since 2009. The United States has won all cases decided so far. 

“We’re confident the case we’re bringing today will be no different: it should bring an end to China’s illegal subsidies, remove significant barriers on American exports and level the playing field for American farmers and their families who rely on the rice, wheat and corn industries and the hundreds of thousands of jobs they help support,” President Obama said in a statement. 

The president used the China case to make a pitch for the Trans-Pacific Partnership trade agreement, whose fate rests in the hands of Congress during a lame-duck session after the election.

“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,” the president 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.”

The case argues that China has set prices for wheat, corn, and rice well above market levels that have in turn led to government subsidies in violation of WTO rules.

“As we move forward in Congress with other trade agreements, I will continue to work with USTR to ensure a level playing field for our workers and our products,” said House Ways and Means Chairman Kevin Brady (R-Texas).

House Agriculture Committee Chairman Michael Conaway (R-Texas) said that China has not only refused to abide by WTO rules, “it attempts to obscure its illegal actions by consistently failing to even report on the support it is providing to its farmers.”

Vilsack said that China has grown into a $20 billion yearly market for U.S. agricultural products.

So, China’s failure to limit its support for those products “has resulted in significant losses to American producers,” he said.

In 2015, China’s support for the agriculture products was estimated at nearly $100 billion in excess of the levels China committed to when it joined the global trade body in 2001.

“American farmers thrive whenever they compete on a level playing field, but when China doles out billions in wheat, rice and corn subsidies to its farmers, it distorts global markets and undercuts American farmers’ ability to compete,” said Senate Finance Committee ranking member Ron Wyden (D-Ore.).

U.S. Grains Council (USGC) President and CEO Tom Sleight said “we are hopeful that this step and our ongoing work in China can continue to support a long-term, stable and mutually beneficial trading relationship.”