TWN Info Service on WTO and Trade Issues (Feb17/01)
1 February 2017
Third World Network

Panel set over Chinese domestic support to agri-producers
Published in SUNS #8389 dated 27 January 2017

Geneva, 26 Jan (Kanaga Raja) -- The WTO Dispute Settlement Body (DSB) on Wednesday agreed to establish a panel, at the request of the United States, to examine domestic support provided by China for agricultural producers, in particular of wheat, rice and corn.

This was a second-time request and panel establishment was automatic.

Japan, Korea, the European Union, Saudi Arabia, Colombia, Brazil, Australia, the Philippines, India, Egypt, Vietnam, El Salvador, Canada, Singapore, the Russian Federation, Paraguay, Turkey, Chinese Taipei, Pakistan, Norway, Kazakhstan, Thailand, and Indonesia reserved their third party rights in the dispute.

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.

The United 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. (See SUNS #8380 dated 20 December 2016.)

In its statement at the DSB, the United States reiterated its concern that China provides domestic support for agricultural producers at a level in excess of the commitments it agreed to when it joined the WTO.

In particular, the United States is concerned that China's market-price support for wheat, rice and corn each exceeds China's permissible level of domestic support for agricultural producers.

In its statement at the DSB, China expressed regret over the request by the United States for the establishment of a panel.

China said that it is particularly disappointed by the "unprecedented and unjustified" step of the United States to challenge China's "legitimate and WTO-consistent domestic support with respect to vital agricultural staples" including Indica rice, Japonica rice, wheat and corn.

Indeed, China pointed out, it is a well-recognised international practice, supported by WTO rules, that WTO Members have the right to provide necessary and essential support to their respective domestic agricultural sectors.

China said that it will strongly defend its interests and demonstrate the WTO-consistency of its measures before the panel.


Meanwhile, under a separate agenda item, Morocco blocked a panel request from Turkey over anti-dumping measures imposed by Morocco on certain hot-rolled steel from Turkey.

This was a first-time request and panel establishment will be automatic when the request comes up again before the DSB.

In its statement at the DSB, Turkey said that on 26 September 2014, Morocco imposed definitive anti-dumping duties on imports of certain hot-rolled steel from, inter alia, Turkey.

These duties apply to two large Turkish exporters, and has already had significant effects on Turkish exports of this product, it said.

In particular, Turkey's concerns are: the duration of the investigation, which exceeded 18 months; the arbitrary use of facts available in the dumping calculation; the lack of sufficient disclosure in the essential facts letter; the unsubstantiated finding of material retardation; and the trade-restrictive system for import surveillance.

According to trade officials, Morocco was of the view that a diplomatic solution could still be found.

It was thus not in a position to accept the request for panel establishment by Turkey.

Under yet another agenda item, the DSB adopted the panel report in the dispute over anti-dumping measures imposed by Canada on imports of certain carbon steel welded pipe from Chinese Taipei.

In its statement at the DSB, Canada welcomed the Panel's finding that Chinese Taipei failed to establish that Canada did not undertake a proper non-attribution analysis.

In particular, it welcomed the Panel's rejection of Chinese Taipei's argument that the Anti-Dumping Agreement requires an investigating authority to distinguish the effect of subsidisation from the effect of dumping in respect of goods that are both subsidised and dumped.

However, Canada expressed regret over certain aspects of the Panel's findings.

But taking into account the burden currently placed on the Appellate Body, including the back-log of cases in the dispute settlement system, Canada said that it will not appeal the Panel report.

"In summary, while we do not agree with all of the findings of the Panel, we accept this panel report," it said, adding that it will inform the DSB of its intentions to comply with the decision within the next 30 days.


According to trade officials, the Chair of the DSB, Ambassador Xavier Carim of South Africa, has proposed to members a procedure and timetable for selecting replacements for two Appellate Body members.

These two AB members are Mr. Ricardo Ramirez Hernandez, whose second four-year term of office expires on 30 June 2017, and Mr. Peter Van den Bossche, whose second four-year term of office expires on 11 December 2017.

The Chair asked members to agree to 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 2017.

Members would submit candidate nominations by 10 April. A Selection Committee would then carry out its work in April/May/June 2017 in order to make a recommendation to the DSB by no later than 8 June 2017, so that the DSB could take a decision on the new appointments at its regular meeting scheduled for 19 June 2017.

(The Selection Committee will be composed of the WTO Director-General and the Chair-persons in 2017 of the General Council, the Goods Council, the Services Council, the TRIPS Council and the DSB.)

The Chair said he would circulate a draft text of the proposal for submission and approval by the DSB at its February meeting. +