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The U.S. Bagged WTO Ruling Concerning Chinese Grains

The U.S. bagged a WTO (World Trade Organization) ruling regarding China’s price hold up for grains, productively challenging a calculation method that is also used by India. A WTO negotiation panel settled with the U.S. grievance that China had paid farmers excessively for Indica rice, wheat, and Japonica rice in 2012–2015. An uncertain corn financial support had already lapsed. In a statement, Robert Lighthizer—the U.S. Trade Representative—said, “China’s additional support constraints opportunities for the U.S. farmers to sell their world-class products to China. We anticipate China to rapidly come into conformity with its WTO compulsions.” China stated that it grieved the lack of backing from experts, citing that administration support for agriculture was a normal practice and allowed under WTO regulations.”

China would persist to promote the advancement of its agriculture sector in accordance with the WTO rules and defend the solidity of the multi-lateral trade structure, the Ministry of Commerce stated in a statement. The trade spokesperson’s office registered the grievance in September 2016, reporting China had reimbursed farmers with almost $100 Billion in excess by the WTO regulations. That offered an artificial enticement for farmers to increase production, lowering prices worldwide. Reportedly, China’s WTO membership deal allows trade-distorting allowances of up to 8.5% of the total value of production. On the contrary, China argued that it was not violating that limitation since only the grains purchased by the administration should be considered as subsidized.

On a similar note, recently, the Trump administration registered another round at the WTO, stating the U.S. trade rule was not going to be governed by the international panel and defending its use of regulations to pressurize China and other trade associates. A report carried by the U.S. Trade Representative describing the White House’s trade plan for 2019 asserted that the U.S. will persist to use the Switzerland-based WTO to defy what it considers as unfair practices.

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