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Beijing / AFP
China’s rice, wheat and corn subsidies are in line with WTO rules, Beijing’s commerce ministry said after Washington launched legal action against what it says are “unfair” trade incentives worth $100 billion.
The United States alleges China, the world’s largest producer of wheat and rice, doled out “market price support” for the grains above levels agreed at the Geneva-based WTO, making Chinese farmers more competitive around the world.
Beijing’s commerce ministry said it had received the US request for consultations under the World Trade Organization dispute settlement mechanism but insisted its policy was legal.
“Agriculture is a fundamental industry in any country and is key to the economic interests of the mass of agricultural producers,” an unnamed commerce ministry official said in a statement posted late Tuesday.
Government support for the sector was a “common international practice”, said the official.
According to US officials, China has been paying higher subsidy levels than the internationally agreed 8.5 percent above reference prices for grain commodities.
US Agriculture Secretary Tom Vilsack said that “if China is willing to operate a WTO-consistent trade regime” US agricultural exports to China could rise above their current $20 billion a year level, which accounts for 200,000 US jobs.
Many of those jobs are in states like Iowa and Kansas which, because of peculiarities of the US electoral system, have an outsized role in deciding presidential elections.
The 2016 election race has seen Republican and Democratic presidential candidates take a much more protectionist line on trade.
China has been the target of particularly tough campaign rhetoric.
The latest dispute marked the 14th WTO case launched against the Asian giant since US President Barack Obama took office and Washington has won every case that has been decided.
The official quoted in the Beijing commerce ministry statement said China “regrets the US request for the consultation… and will actively protect China’s industrial and trade interests”.
“China has always respected WTO rules, consistently supported Chinese agricultural production and development in ways in line with the rules and maintained the international trading system of farm produces,” the official added.