US files WTO complaint against China over grain import restrictions

The US government on Wednesday announced it was taking aim against illegal Chinese restrictions on imports of American grain, as well as price supports China provides for domestic farmers.

In what it says is the 15th challenge against China, and the second involving agriculture this year, the US Trade Representative said it filed a dispute in the World Trade Organization charging China has violated its commitments by limiting imports of American rice, wheat and corn.

USTR said it also is taking the next step in the complaint filed in September that China provides $100 billion in excess price support for local farmers. It requested the WTO establish a panel to rule on the case, after consultations failed to resolve the matter.

The cases add further fuel to the US argument that China has not yet graduated to the status of a market economy, something Beijing insists should have been automatic as of December 11, 15 years after it joined the global trade body.

That status would make it harder for Washington to impose tariffs on Chinese goods at the request of US companies.

USTR said in a statement that China's quota system for rice, wheat and corn is "opaque and unpredictable" and limits imports. The Agriculture Department estimates China would have imported as much as $3.5 billion of additional crops last year alone if the so-called tariff-rate quotas were properly used.

"Although China has become a significant market for our grain exports, we could be doing much better than we are today," USTR Michael Froman said in a statement.

"When China joined the WTO, it committed to implementing an agriculture regime that would facilitate market access consistent with international obligations. However, China has frustrated exporters through generous price support and unjustified market restrictions."