comment: Since China joined the WTO in 2001, its grain imports have been subject to a TRQ (tariff-rate quota) system. Following charges by US trade officials, a WTO (World Trade Organisation) ruling in 2019 found Beijing in breach of its TRQ obligations. The matter is now re-negotiated before the global trade body as US officials have announced new measures against what they see as a continued violation of Beijing’s international trade commitments.

The WTO agreed on 30 Aug 2021 to a request from Beijing to evaluate China’s compliance with a ruling faulting it for unfair restrictions on imports of American grain.

The WTO’s decision follows a long-standing dispute between the world’s two largest economies. In 2016, the Obama administration filed a complaint with the global trade body, claiming that Beijing had imposed illegal restrictions on imports of American rice, wheat and corn by using its TRQs (tariff-rate quotas) in an ‘opaque and unpredictable’ manner.

TRQ is a two-tier tariff system that imposes lower tariffs on imported ’in-quota’ goods and high tariffs on imports outside the quota.

Washington estimated that American farmers could have exported an additional US$3.5 billion of rice, wheat and corn to China if the system had been used properly, charging that Beijing had violated its commitments under international trade rules.

In 2019, the WTO’s DSB (Dispute Settlement Body) ruled that Beijing had failed its obligation to administer TRQs in a transparent, predictable and fair manner.

China has stated that it has implemented WTO recommendations since the ruling, but the United States disagrees. Last month, the United States announced that it has the right to take countermeasures against China, but did not provide further details.

China has requested that the WTO help settle the matter by establishing a fresh panel of experts to examine its compliance with the 2019 ruling. Its initial request for a panel was rejected, but its second request during a DSB meeting Monday was granted, says a Geneva-based trade official.

The Chinese mission in Geneva did not comment, but a trade official who attended the meeting said that Beijing was deeply concerned about the way the United States handled the dispute and that the United States must provide evidence, reports Lianhe Zaobao.