Adopted 26 April 2019
Complainant United States
Respondent China
Third Parties Australia, Brazil, Canada, Colombia, Chinese Taipei, Ecuador, Egypt, El Salvador, European Union, Guatemala, India, Indonesia, Israel, Japan, Kazakhstan, Korea, Pakistan, Paraguay, Philippines, Russia, Saudi Arabia, Singapore, Thailand, Turkey, Ukraine, Viet Nam
Measure at Issue
The dispute concerns certain market price support measures by China to domestic agricultural producers of wheat, Indica rice, Japonica rice, and corn, which the United States (US) claimed were inconsistent with China's obligations under the WTO Agreement on Agriculture. Specifically, the US considered that China utilized market price measures in the period 2012–2015 to support farmer incomes and increase production of the said agricultural products, but that this support was in excess of China's WTO commitments. At the outset, the Panel found that the support measures for Chinese corn producers had expired, and that there were no factors weighing in favor of making findings on this expired measure.Footnote 1 So, no findings were made with respect to this claim.
Main Adopted Findings of the Panel
Finding that China exceeded the level of agricultural support for wheat and rice in the period 2012–2015 – Articles 3.2 and 6.3 of the Agreement on Agriculture
The Panel assessed whether China provided market price support to its agricultural producers of wheat, Indica rice, and Japonica rice in excess of its domestic support commitments under Articles 3.2 and 6.3 of the Agreement on Agriculture. The main contention in the dispute was how the Panel were to calculate the level of domestic support provided by China for each product, in order to establish China's total Current Total Aggregate Measurement of Support (AMS) against which its WTO commitments were to be examined.
When acceding to the WTO in 2001, China committed to a level of domestic support for agricultural producers of ‘nil’ or zero. Therefore, its Current Total AMS cannot exceed zero, but Chinese support that does not exceed 8.5% of an agricultural product's value of production in a year does not have to be calculated towards the AMS. In effect, China can provide support up to 8.5% of the annual production value of each basic agricultural product, but if any amount of such product-specific support is above 8.5% it will be included in the Current Total AMS for that year.Footnote 2
Assessing the level of China's domestic support for wheat and rice in the period 2012–2015, the Panel found that China provided for each product domestic support that was above its 8.5% de minimis threshold. Including these above-threshold values in the calculation of the Current Total AMS established that China's support measures exceeded its ‘zero’ commitment. As a result, China was found to have acted inconsistently with Articles 3.2 and 6.3 of the Agreement on Agriculture.Footnote 3 Moreover, China decided not to appeal the Panel's findings, but rather to implement these in a manner that respects its WTO obligations without appellate review.
