The Obama Administration announced last week they plan to launch a trade enforcement action against China at the World Trade Organization (WTO) to challenge trade-distorting domestic supports. The Administration plans to challenge three key crops: corn, wheat and rice. In 2015 China’s “market price support” for these three crops was estimated to be almost $100 billion in excess of what they were when China committed to joint the WTO.
“We compete with China in some important regional markets, and there’s no question that an economy as large as China’s can have major trade-distorting impacts in the global agricultural sector,” USA Rice CEO Betsy Ward said. “Despite years of work by USA Rice and USDA to open the Chinese market, we still have no access for U.S. grown rice. This enforcement action also sends a clear signal to other countries with whom we compete and who are not living up to their WTO obligations with regard to rice, such as Viet Nam, Thailand, and India.”
The American Farm Bureau Federation also supports the decision to begin the dispute settlement process.
“The World Trade Organization’s Agreement on Agriculture applies to all members. Each country must follow agreed upon levels of domestic support. Violation of domestic support levels can lead to overproduction and price-depressing surpluses that affect farmers worldwide,” said President Zippy Duvall. “Trade deals only work if they’re followed. It is good to see our government enforcing the trade commitments that already exist. This kind of accountability leads to stronger trade relationships with all our partners.”
“The National Corn Growers Association is committed to the development and maintenance of fair and open global trade practices and policies as part of our efforts to feed and fuel a growing world,” adds Chip Bowling, President of the National Corn Growers Association. “We believe in both strong trade policy and market development. As a facilitator and arbitrator of global trade, the World Trade Organization provides structure and accountability to the process. We welcome USTR’s and USDA’s trade enforcement action, and will closely monitor these developments.”
The process is expected to take up to a year and a half to complete, but the ag groups are overwhelmingly pleased with the start.
“USA Rice has asked our government for years to challenge countries who don’t play by the rules, and we’ve provided them concrete evidence of harm being done by these countries to America’s rice industry,” she said. “It’s gratifying to finally see some action.”