context: This is the second WTO finding challenging the domestic system of support and protection for grain growers in as many weeks. The first finding took aim at state-set minimum purchase prices—a system China has moved away from rapidly in recent years and appears poised to drop altogether. This finding puts pressure not only on quota levels but on the secretive system of issuing them that means foreign sellers are unsure which buyers will be able to purchase in the coming year.

An 18 Apr 2019 World Trade Organisation (WTO) ruling on China’s tariff rate quota (TRQ) management measures for wheat, rice and corn found undue opacity in domestic practices but has rejected the US view that China is obligated to announce details of quota allocation and distribution. China has always advocated proper settlement of trade conflicts through WTO’s dispute settlement mechanism, says an editorial widely carried in state media, which argues the ruling should be viewed as a reflection of the critical role of WTO rather than a victory for either side of the dispute.

WTO’s dispute settlement mechanism has thus far considered over 500 cases, including 17 brought by China and 27 brought against China. Though rulings in the cases are not enforceable, they are generally respected by most member states, says the piece. A number of cases brought by China against the US are highlighted, where the WTO ruled in favour of China’s side.

The editorial highlights risks from US unilateralism and protectionism that may impact the efficacy of the mechanism, specifically by

  • blocking updates to members of the appellate body
  • resisting WTO reform proposals

The ruling on this case reflects the differing understanding of the rules by member states, says the piece, and notes that China will ‘seriously study’ the results of the ruling.