The Obama Administration launched a new complaint against China at the World Trade Organisation (WTO) regarding price support in domestic Chinese agricultural markets, according to a press release from USDA on Tuesday. The aim of the new trade enforcement action is to limit price distortion for rice, wheat, and corn in the Chinese market, and level the playing field for American farmers. Chinese rice, wheat, and corn prices have been inflated by the Chinese government well above market level, creating incentive for Chinese farmers to increase production through artificial government support. As a result, the Chinese corn market is expected to be oversupplied by 37mn t in 2017, according to the Chinese National Grain & Oils Information Center (CNGOIC).
The press release stated that the price distortion experienced in these Chinese agricultural markets excludes US farmers from the market, and is breaking the commitments which China agreed to when joining the WTO. While China has increased from a $2 bn per year agriculture import market to a $20bn plus per year market, the US Agriculture Secretary insists that eliminating this price support for domestically grown crops would create further opportunities for American exporters. This is the 14th complaint the United States Trade Representative have filed against China since 2009.