China –
Domestic Support for Agricultural Producers
Report of the Panel
TABLE OF CONTENTS
1 Introduction.. 13
1.1
Complaint by the United States. 13
1.2
Panel establishment and composition. 13
1.3
Panel proceedings. 13
1.3.1 General 13
1.3.2 United States' request for partially
open meetings. 13
1.3.3 Terms of reference. 14
2 Factual
aspects. 14
2.1 Measures at issue. 14
3 Parties'
requests for findings and recommendations. 14
4 Arguments of
the parties. 15
5 Arguments of
the third parties. 15
6 Interim
review... 15
7 Findings. 18
7.1
United States' request for partially open Panel meetings with the parties. 18
7.1.1 Procedural background. 18
7.1.2 Introduction. 19
7.1.3 Panel's analysis. 20
7.1.3.1 Introduction. 20
7.1.3.2 Article 18.2 of the DSU. 20
7.1.3.3 Prior disputes addressing open or
partially open hearings. 22
7.1.3.4 Concluding considerations. 25
7.2
The measures challenged in this dispute and China's claim relating to the
expiry of
one of the measures. 27
7.2.1 The measures challenged by the
United States. 27
7.2.2 China's terms of reference claim
raised with regard to the corn measure. 31
7.2.2.1 Whether
the corn measure has expired. 34
7.2.2.2 Whether
the Panel should make findings on the otherwise expired corn measure. 39
7.2.3 Main characteristics of the wheat
and rice measures. 43
7.2.3.1 General framework. 43
7.2.3.2 Market price support programmes
for wheat and rice. 43
7.2.3.3 Entities involved. 45
7.2.3.4 Geographical scope. 46
7.2.3.5 Temporal scope. 46
7.2.3.6 Quality requirements. 47
7.3
Claims brought by the United States and Panel's order of analysis. 47
7.4
Claims under Articles 6.3 and 3.2 of the Agreement on Agriculture. 48
7.4.1 Introduction. 48
7.4.2 Domestic support obligations as set
out in Articles 3.2 and 6.3 of the Agreement on Agriculture 49
7.4.3 Calculation of AMS and Current Total
AMS under the Agreement on Agriculture. 52
7.4.4 Preliminary considerations in
relation to China's domestic support commitments. 59
7.4.4.1 Tables of supporting material and
Member-specific domestic support-related commitments 59
7.4.5 Issues relating to the definition
and calculation of the variables of the MPS formula. 61
7.4.5.1 Applied Administered Price. 61
7.4.5.2 Fixed external reference price. 62
7.4.5.2.1 FERP contained in China's tables
of supporting material 64
7.4.5.2.2 Other Members' tables of supporting
material 67
7.4.5.2.3 Consistency in the calculations
of Base Total AMS and Current Total AMS. 71
7.4.5.2.4 The FERP that should be used in
the present dispute. 78
7.4.5.3 Quantity
of production eligible to receive the AAP. 82
7.4.5.3.1 Geographical scope of the
programme. 88
7.4.5.3.2 Temporal scope of the programme. 89
7.4.5.3.3 Activation and de-activation of
the programme. 89
7.4.5.3.4 Minimum grain quality
requirements. 90
7.4.5.3.5 Consumption of grain on
small-scale farms. 91
7.4.5.3.6 Conclusion. 91
7.4.5.4
Processing-level adjustment 92
7.4.5.4.1 Which variable should be
adjusted. 93
7.4.5.4.1.1 Basic
agricultural product 93
7.4.5.4.1.2 Point of first sale. 95
7.4.5.4.2 Adjustment rate to be used in
this case. 97
7.4.5.4.3
Conclusion on the processing-level adjustment 99
7.4.6 Calculation of China's Current Total
AMS. 99
7.4.7 MPS Calculations. 100
7.4.7.1 Wheat 100
7.4.7.2 Rice. 102
7.4.7.2.1 Total
value of production of rice. 102
7.4.7.2.2 Volume
of production of rice per province. 103
7.4.7.2.3 Weighted
average AAP. 104
7.4.7.2.4
Conclusion on these issues. 105
7.4.7.2.5 Japonica rice. 105
7.4.7.2.5.1 Japonica rice (United States'
approach) 105
7.4.7.2.5.2 Japonica rice (China's
approach) 107
7.4.7.2.6 Indica rice (United States'
approach) 109
7.4.7.2.6.1 Early-season Indica rice. 109
7.4.7.2.6.2 Mid-Late-Season Indica rice. 111
7.4.7.2.6.3 Total Indica rice MPS
calculation. 112
7.4.7.2.7 Indica rice (China's approach) 113
7.4.8 Conclusion on the calculation of
China's Current Total AMS. 114
7.5
Claim under Article 7.2(b) of the Agreement on Agriculture. 115
8 Conclusions
and recommendations. 115