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WTO Establishes Dispute Panel to Investigate Chinese Farm Subsidies

A dispute panel was established by the World Trade Organization (WTO) to investigate U.S. allegations that China provided more than $100 billion in illegal government subsidies for producing rice, wheat and corn.

WTO on June 25 named three dispute panelists to oversee the case: Gudmundur Helgason of Iceland, Juan Antonio Dorantes Sanchez of Mexico and Elaine Feldman of Canada. The panel will examine U.S. claims that Beijing supported farmers between 2012 and 2015 at levels that were substantially above China’s WTO commitments, according to a June 26 WTO filing.

Specifically, the panel will determine if China’s actions violated Articles 3.2 and 6.3 of WTO’s Agriculture Agreement, which governs China’s bound subsidy commitments. Further, the panel will determine if China’s domestic support for wheat, rice, and corn exceeded Beijing’s commitment to cap its product-specific subsidies at 8.5% of the value of production.

Though WTO rules generally permit countries to maintain de minimis levels of domestic support of between 5% and 10% of the value of production, China agreed to cap its de minims levels at 8.5% as part of its 2001 WTO accession agreement.

If WTO finds that Beijing violated its international trade obligations, it could force China to reduce its agricultural subsidies or face retaliatory trade tariffs worth tens of billions of dollars.

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