DISPUTE SETTLEMENT

DS: China — Tariff Rate Quotas for Certain Agricultural Products

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

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Key facts

 

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by the United States

On 15 December 2016, the United States requested consultations with China concerning China's administration of its tariff rate quotas, including those for wheat, short- and medium- grain rice, long grain rice, and corn.

The United States claimed that the measures appear to be inconsistent with:

  • Articles X:3(a), XI:1 and XIII:3(b) of the GATT 1994; and
     
  • Paragraph 1.2 of Part I of China's Protocol of Accession (to the extent that it incorporates paragraph 116 of the Report of the Working Party on the Accession of China).

On 22 December 2016, Australia and the European Union requested to join the consultations. On 29 December 2016, Canada and Thailand requested to join the consultations.

 

Panel and Appellate Body proceedings

On 18 August 2017, the United States requested the establishment of a panel. At its meeting on 31 August 2017, the DSB deferred the establishment of a panel.

At its meeting on 22 September 2017, the DSB established a panel. Australia, Brazil, Canada, Ecuador, the European Union, Guatemala, India, Indonesia, Japan, Kazakhstan, Korea, Norway, the Russian Federation, Singapore, Chinese Taipei, Ukraine and Viet Nam reserved their third-party rights.

On 1 February 2018, the United States requested the Director-General to compose the panel. On 12 February 2018, the Director-General composed the panel.

On 9 August 2018, the Chair of the panel informed the DSB that the panel estimated to issue its final report to the parties in the second quarter of 2019, in accordance with the timetable adopted after consultation with the parties. In its communication, the Chair also informed the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation would depend on completion of translation.

On 18 April 2019, the panel report was circulated to Members.

This dispute concerns China's administration of its wheat, rice, and corn TRQs. The United States challenged several specific aspects of China's TRQ administration: (i) the basic criteria for being eligible to receive TRQ allocations, (ii) the principles for allocating TRQ amounts and the procedures for reallocating unused, returned TRQ amounts, (iii) the process of seeking comments from the public on certain information provided by applicants, (iv) the administration of state trading enterprise (STE) and non-STE portions of TRQs, (v) the public notice provided in connection with allocation, return, and reallocation of TRQs, and (vi) the usage requirements for wheat, rice, and corn imported under TRQ allocations.

The United States made claims pursuant to several obligations under Paragraph 116 of China's Working Party Report. The United States also made claims under Articles X:3(a), XI:1, and XIII:3(b) of the GATT 1994.

Panel's findings

With respect to the United States' claims under Paragraph 116 of China's Working Party Report, the Panel assessed China's TRQ administration as set out in its legal instruments, as well as certain practices explained by China in the course of the proceeding.

The Panel first made findings concerning the specific challenged aspects of China's TRQ administration. More particularly, it found that:

  • The basic eligibility criteria are inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis, and to administer TRQs using clearly specified requirements;
  • The allocation principles are inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis, and to administer TRQs using clearly specified administrative procedures;
  • The reallocation procedures are inconsistent with the obligation to administer TRQs using clearly specified administrative procedures;
  • The public comment process is inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis, and to administer TRQs using clearly specified administrative procedures;
  • The administration of STE and non-STE portions of China's wheat, rice, and corn TRQs is inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis, to administer TRQs using clearly specified administrative procedures, and to administer TRQs in a manner that would not inhibit the filling of each TRQ;
  • The United States has not demonstrated that the extent of the public notice provided in connection with the allocation, return, and reallocation of wheat, rice, and corn TRQ amounts is inconsistent with the obligations to administer TRQs on a transparent and predictable basis, and to administer TRQs in a manner that would not inhibit the filling of each TRQ;
  • The usage requirements for wheat and corn imported under TRQ allocations are inconsistent with the obligations to administer TRQs on a predictable basis, to administer TRQs using clearly specified administrative procedures, and to administer TRQs in a manner that would not inhibit the filling of each TRQ; and
  • The United States has not demonstrated that the usage requirement for rice imported under TRQ allocations is inconsistent with the obligation to administer TRQs in a manner that would not inhibit the filling of each TRQ.

On the basis of these individual findings of violation, the Panel also concluded that China's TRQ administration as a whole is inconsistent with the obligations to administer TRQs on a transparent, predictable, and fair basis, to administer TRQs using clearly specified requirements and administrative procedures, and to administer TRQs in a manner that would not inhibit the filling of each TRQ.

With respect to the United States' claim under Article XIII:3(b) of the GATT 1994, the Panel found that this provision requires public notice of the total amounts of TRQs available for allocation and any changes thereto, not public notice of the total amounts of TRQs actually allocated and any changes thereto, as argued by the United States. The Panel therefore rejected the United States' claim.

With respect to the United States' claims under Articles X:3(a) and XI:1 of the GATT 1994, the Panel did not consider it necessary to make findings to secure a positive solution to the dispute, given the findings of inconsistency it made under Paragraph 116 of China's Working Party Report.

At is meeting on 28 May 2019, the DSB adopted the panel report.

 

Reasonable period of time

On 24 June 2019, China informed the DSB that it intended to implement the recommendations and rulings of the DSB in a manner consistent with its WTO obligations and that it would need a reasonable period of time to do so.

On 9 July 2019, the United States and China informed the DSB that they had agreed that the reasonable period of time for China to implement the DSB's recommendations and rulings was set to expire on 31 December 2019.

 

 

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