US complains of unfair government aid for Chinese farmers

"Unless we act now to set our own high standards, the fast-growing Asia-Pacific will be forced to play by lower-standard rules that we didn't set. We can't let that happen,'' US President Obama said.

By: AP | Washington | Published:September 13, 2016 10:48 pm
WTO, Barack Obama, rice, wheat, corn, American farmers, China, US China, US, US China Trade, US China exports, news, latest news, US news, world news, international news Agriculture Secretary Tom Vilsack noted that the removal of trade barriers in China have allowed agriculture exports to increase from billion a year in 2001 to more than billion a year. (representative image)

The Obama administration lodged a complaint Tuesday against China at the World Trade Organization alleging excessive government support for rice, wheat and corn that drives up production and makes it harder for American farmers to export the same crops to China. The complaint alleges that China’s support for those products in 2015 exceeded, by $100 billion, the levels China committed to when joining the WTO. The complaint also comes as the administration has lobbied Congress to approve a trade agreement among 12 Pacific Rim countries called the Trans-Pacific Partnership and gave President Barack Obama another opportunity to warn that failure to pass the agreement would allow China to negotiate its own trade deals with Asian markets at the US’s expense.

“Unless we act now to set our own high standards, the fast-growing Asia-Pacific will be forced to play by lower-standard rules that we didn’t set. We can’t let that happen,” Obama said in a statement coinciding with the announcement of the WTO complaint. Obama said the complaint is the 14th WTO case launched against China during his presidency. He said the US has won all the cases decided so far.

“We’re confident the case we’re bringing today will be no different,” Obama said. The complaint comes as US agriculture exports to China have soared. Agriculture Secretary Tom Vilsack noted that the removal of trade barriers in China have allowed agriculture exports to increase from $2 billion a year in 2001 to more than $20 billion a year.

“But we could be doing much better, particularly if our grain exports could compete in China on a level playing field,” Vilsack said. “Unfortunately, China’s price supports have encouraged wheat, corn and rice production in China that has displaced imports.”

Vilsack joined by US Trade Representative Michael Froman and a bipartisan group of lawmakers in announcing the complaint at a press conference at the federal Agriculture Department Tuesday. Lawmakers acknowledged that it could take years for the complaint to be resolved, but they said the action was important to maintain support for trade agreements from the public.

“If we don’t amp up our enforcement, we will have a nation that’s unwilling to do trade agreements because they don’t believe trade agreements will be enforced,” Democratic Sen. Heidi Heitkamp of North Dakota said Tuesday. A Chinese embassy representative in Washington did not immediately respond to an email inquiry seeking comment Tuesday.

China announces each year the minimum prices the government will pay for rice, wheat, and corn during the harvest season. The United States Trade Representative alleges that the support exceeds the level set as part of China’s entry into the WTO, increasing production and distorting the Chinese market.

The administration is hoping Tuesday’s action will enhance support for the Trans-Pacific Partnership. But House Speaker Paul Ryan has offered assurances to rank-and-file GOP lawmakers that the TPP deal will not move in the lame-duck session, and Senate Majority Leader Mitch McConnell has also indicated chances for passage are slim in the Senate.

Rep. Kevin Brady, the Republican chairman of the House Ways and Means Committee, said at Tuesday’s press conference that TPP isn’t perfect, but he’s committed to working with the administration to resolve various outstanding issues. He said it was critical that America “not abandon the trade field” in the Asia-Pacific region.