US Blocks Chinese Request for Dispute Panel Over Agricultural TRQs

The U.S. blocked China's request for a further dispute settlement panel to resolve claims that China has not brought its tariff-rate quota regime on wheat, rice and corn in line with World Trade Organization commitments, at the July 26 meeting of the WTO's Dispute Settlement Body, according to a Geneva-based trade official. After finding that China's compliance efforts lacked in transparency, the U.S. declared its intention to continue pursuing recourse over the non-compliance as opposed to following through with China's request for another panel review.

The development comes from the U.S.'s successful bid to the DSB to find that China's TRQs were inconsistent with WTO obligations. The DSB subsequently released recommendations on how to bring the trade restrictions into compliance with WTO rules and set a June 29 deadline for implementation. The U.S. believes China failed to properly implement the recommendations and now seeks retribution in the form of suspension of concessions, including most-favored nation obligations under the General Agreement on Tariffs and Trade 1994 (see 2107160054). The Chinese, on the other hand, sought another panel review of their compliance efforts which would confirm their full adherence to WTO rules.

"The United States is not in a position to agree to the establishment of a compliance panel," the trade official reported. "The United States said it stands ready to work constructively with China to reach a resolution to this dispute, as it has done since adoption of the panel report.

"On China's procedural claims, the United States said that nothing in the [Dispute Settlement Understanding] supports the view that arbitration on a request for WTO authorization must be suspended while compliance panel proceedings are ongoing. While members have at times agreed through voluntary agreements on such sequencing of proceedings, that is not required under the DSU. Where no sequencing agreement has been reached, as in the present case, a complaining member must request authorization to retaliate within the timeframe specified in Article 22.6 of the DSU or risk prejudicing its rights to do so at a later date. Accordingly, in this proceeding, US said it has done so in a timely manner."

The U.S. also again blocked the appointment of members to the Appellate Body, citing concerns with the body that it has raised the past 16 years and through multiple administrations.