Info Service on WTO and Trade Issues (Dec16/08)
22 December 2016
China blocks US panel request over domestic
Published in SUNS #8380 dated 20 December
Geneva, 19 Dec (Kanaga Raja) -- A panel request by
the United States to examine domestic support provided by China for agricultural
producers, in particular of wheat, rice and corn, was blocked by China at a meeting
of the WTO Dispute Settlement Body on 16 December.
This was a first-time
request and panel establishment will be automatic when the request comes up again
before the DSB.
In its communication to the DSB, the United States charged
that China provides domestic support in excess of its product-specific de minimis
level of 8.5 percent for each of wheat, Indica rice, Japonica rice, and corn.
The United States considered that China has acted inconsistently with its
obligations pursuant to Articles 3.2 and 6.3 of the Agriculture Agreement because
the level of domestic support provided by China exceeds China's commitment level
of "nil" specified in Section I of Part IV of China's Schedule CLII.
In particular, said the United States, China's domestic support in favour
of agricultural producers, expressed in terms of its current Total Aggregate Measurement
of Support ("Total AMS"), exceeds China's final bound commitment level
in 2012, 2013, 2014, and 2015 on the basis of domestic support provided to producers
of, inter alia, wheat, Indica rice, Japonica rice, and corn.
States further considered that, to the extent applicable, these measures are inconsistent
with China's obligation under Article 7.2(b) of the Agriculture Agreement because,
in 2012, 2013, 2014, and 2015, China provides domestic support for wheat, Indica
rice, Japonica rice, and corn in excess of its product-specific de minimis level
of 8.5 percent for each product.
In its statement at the DSB, the United
States recalled that all WTO Members, including China, have undertaken to limit
the trade- or production-distorting government support they provide to agricultural
For each WTO Member, non-exempt domestic support, as defined
by the Agreement on Agriculture, may not exceed the level agreed to by that Member
as reflected in its WTO schedule.
Unfortunately, said the United States,
it appears that China maintains domestic support at levels well in excess of its
scheduled commitments, including with respect to wheat, Indica rice, Japonica
rice, and corn.
The United States maintained that when China joined the
WTO, it had committed not to provide support in favour of domestic producers,
expressed in terms of China's Current Total Aggregate Measurement of Support (Current
Total AMS), in excess of its final bound commitment level of "nil".
China further agreed that its de minimis exemption for product-specific support
would be equivalent to 8.5 percent of the total value of production of a basic
agricultural product during the relevant year, the United States added.
The United States said that for the years 2012, 2013, 2014 and 2015, however,
it appears that China has exceeded its final bound commitment level on the basis
of China's market price support (MPS) programs for wheat, Indica rice, Japonica
rice and corn alone.
That is, China's support for these products exceeded
8.5 percent of the total value of production for each product.
to initiating this dispute, the United States said it had attempted to resolve
these issues with China, both bilaterally and in the Committee on Agriculture.
However, China has continued to provide domestic support at levels well in
excess of its WTO commitments, the United States complained.
to trade officials, China said the support that it provides to its agricultural
producers are consistent with the WTO rules and practices.
out that the WTO rules permit such support and encourages the protection of interests
of agricultural producers.
On the US panel request, China said it was
disappointed with what it said was an unjustified step to challenge its legitimate
and WTO-consistent support for agricultural producers.
that it will strongly defend its interests and demonstrate the WTO-consistency
of its measures.
TWO PANELS SET ON AD METHODOLOGIES, RAILWAY
In other actions, the DSB agreed to establish a panel,
at the second request of the Russian Federation, to examine the European Union's
cost adjustment methodologies and certain anti-dumping measures on imports from
The dispute is with respect to Council Regulation (EC) No 1225/2009
of 30 November 2009 on protection against dumped imports from countries not members
of the European Community, in particular Articles 2.3 and 2.5 thereof, the cost
adjustment methodology used by the European Union authorities in anti-dumping
procedures, as well as anti-dumping measures imposed on imports of ammonium nitrate
and certain welded tubes and pipes of iron or non-alloy steel originating in the
Japan, the United States, Ukraine, Korea, Argentina,
Indonesia, Australia, India, China, Canada, Norway, Brazil, Vietnam and Mexico
reserved their third party rights to the dispute.
The DSB also agreed
to establish a panel, at the second request of Ukraine, to examine Russian measures
affecting the importation of railway equipment and parts thereof.
dispute concerns certain measures imposed by the Russian Federation on importation
of railway rolling stock, railroad switches, other railroad equipment, and parts
thereof ("railway products") from Ukraine.
Canada, Japan, the
European Union, the United States, China, Indonesia and Singapore reserved their
third party rights to the dispute.
APPOINTMENT OF APPELLATE BODY
According to trade officials, the Chair of the DSB,
Ambassador Xavier Carim of South Africa, said that the terms of two Appellate
Body members - Ricardo Ramirez Hernandez and Peter Van den Bossche - will expire
on 30 June 2017 and 11 December 2017, respectively.
DSB will have to decide next year on the appointments of two new Appellate Body
members to replace them.
The Chair said that he intends to circulate
a draft decision early next year regarding the selection process to be adopted
by the DSB.
For efficiency, and taking into account that delegations
will be busy in the second half of the year preparing for the WTO's Ministerial
Conference in Buenos Aires in December 2017, he proposed that members carry out
one selection process for the two positions at the same time, with a view to completing
the process by the end of June.
However, a selection committee would
make recommendations for filling one position as of 1 July 2017 and the other
as of 12 December 2017, he said.
The chair said that the two newest Appellate
Body members, Ms Zhao Hong and Mr. Hyun Chong Kim, would be sworn in on 25 January
2017 following the DSB meeting scheduled for that day.
The DSB agreed
on 23 November to the appointment of Ms Zhao and Mr Kim to replace Ms Yuejiao
Zhang and Mr Seung Wha Chang, whose terms ended on 31 May 2016.
Under this agenda item, Colombia reported that it had
issued a new decree modifying certain tariffs and thus "fully complied"
with the DSB's rulings and recommendations in its dispute with Panama over measures
on imported textiles, apparel and footwear.
According to trade officials,
Panama said that another Colombian decree provides for strict checks, restricted
entry ports and certain customs procedures which restricts access to the Colombian
market for the same goods.
Panama said that it is reviewing the new measures
and reserves its right to recourse to dispute settlement.
the item of United States - Conditional Tax Incentives for Large Civil Aircraft
was taken off the agenda of the DSB meeting as the United States has notified
that it is appealing the panel report. +