US wins WTO ruling against China grain import quotas

The case marks second US victory in as many months

GENEVA: The United States won a World Trade Organisation (WTO) ruling on Thursday against China's use of tariff-rate quotas for imported rice, wheat and corn, which it successfully argued limited market access for US grain exports.

The case, lodged by the Obama administration in late 2016, marked the second US victory in as many months.

It came amid US-China trade talks and on the heels of Washington clinching a WTO ruling on China's price support for grains in March.



A WTO dispute panel ruled on Thursday that under the terms of its 2001 WTO accession, China's administration of the tariff rate quotas (TRQs) as a whole violated its obligation to administer them on a "transparent, predictable and fair basis".

TRQs are two-level tariffs, with a limited volume of imports allowed at the lower 'in-quota' tariff and subsequent imports charged an "out-of-quota" tariff, which is usually much higher.

However, the United States had not proven all of its case, failing to show that China had violated its public notice obligation under the General Agreement on Tariffs and Trade (GATT) in respect to TRQs, the panel said.

Either side can appeal the ruling within 60 days.

Last year, the United States claimed China's "unfair competitive practices" were harming foreign companies and workers in a way that violated WTO rules.

US Trade Ambassador Dennis Shea drew fire from Chinese envoy Zhang Xiangchen who said the Trump administration's tariffs on steel and aluminium products allowed protectionism under the guise of dubious national security concerns.



The heated words, in texts seen by Reuters, were exchanged at the start of a closed-door review of US trade policies, held every two years at the WTO.

Shea expressed concern about the WTO dispute settlement system having "strayed far from the system agreed to by members" and said that the Appellate Body had overreached in some legal interpretations.