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U.S. Challenges Excessive Chinese Support for Rice, Wheat & Corn
USAgNet - 09/14/2016

The Obama Administration has launched a new trade enforcement action against China at the World Trade Organization concerning excessive government support provided for Chinese production of rice, wheat, and corn. United States Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack were joined by bipartisan members of Congress in announcing the complaint which challenges China's use of "market price support" for three key crops (rice, wheat, and corn) in excess of China's commitments under WTO rules.

In 2015, China's "market price support" for these products is estimated to be nearly $100 billion in excess of the levels China committed to during its accession. China's excessive market price support for rice, wheat, and corn inflates Chinese prices above market levels, creating artificial government incentives for Chinese farmers to increase production. The United States is challenging China's government support on behalf of American rice, wheat, and corn farmers to help reduce distortions for rice, wheat, and corn, and help American farmers to compete on a more level playing field.

"These programs distort Chinese prices, undercut American farmers, and clearly break the limits China committed to when they joined the WTO. 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," said Ambassador Froman. "We will aggressively pursue this challenge on behalf of American farmers and hold the Chinese government accountable to the standards of fair global trade."

"Through tariff cuts and the removal of other trade barriers, China has gone from a $2-billion-a-year market for U.S. agricultural products to a $20-billion-plus market," said Agriculture Secretary Vilsack. "But we could be doing much better, particularly if our grain exports could compete in China on a level playing field. Unfortunately, China's price supports have encouraged wheat, corn and rice production in China that has displaced imports. When China joined the WTO, it committed to limit this kind of trade-distorting support, which it has failed to do. This has resulted in significant losses to American producers. We see substantial opportunities to meet import demand for grains in China if China is willing to operate a WTO-consistent trade regime."

This trade enforcement action marks the 14th complaint brought by the Office of the United States Trade Representative against China at the WTO since 2009.

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