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Current Affairs

US Wins WTO Ruling on Chinese Grains

  • The United States won a world trade organization ruling on china’s price support for grains, successfully challenging a calculation methodology that is also used by India.
  • A WTO adjudication panel agreed on Thursday with the US complaint in September 2016, that china had paid farmers nearly $100 billion more for wheat, indica rice and japonica rice in 2012-2015.
  • China’s excessive support limits opportunities for US farmers to export their world-class products to china. China said it regretted the lack of support from experts, noting that government support for agriculture was a common practice and allowed under WTO rules.
  • China would continue to promote development of its agriculture sector in line with WTO rules and safeguard the stability of the multi-lateral trade system, said by the ministry of commerce.
  • China’s WTO membership agreement permits trade-distorting subsidies of up to 8.5 percent of the total value of production. China argued that it was not breaching the limit because only the gains procured by government should be counted as subsidised. The UN successfully argued that state buying at a guaranteed price raised the whole market.
  • The ruling, which may be appealed could have ramifications for India, which has made similar arguments to china. At a meeting WTO’S agriculture committee on Wednesday, the united states and Canada rejected India’s claim that its market price support for pulses was 1.5 percent of the value of production, saying it was 31percent to 85 percent, far above allowed limits.