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| There was actually a (pre-Trump) time when the "WTO court" actually functioned. But no longer. |
Kristen Hopewell of Edinburgh University explains:
China's pattern of accumulating massive stockpiles of agricultural products and then dumping these at presumably below-market prices would represent a massive distortion to global agricultural markets:China is now the world’s largest subsidizer of agriculture — Beijing provided an estimated $212 billion in farm subsidies in 2016, significantly more than the European Union ($100 billion), United States ($33 billion) or any other country.Subsidies now make up a significant portion of earnings for Chinese farmers, accounting for 38 percent of their revenue for wheat, 29 percent for corn and 32 percent for rice. By comparison, U.S. subsidies constitute 8 percent of U.S. farm earnings for wheat, 4 percent for corn and 2 percent for rice.Beijing’s support to China’s agriculture sector includes government purchases at above-market prices, as well as market price support programs, where farmers receive a direct payment from the government if market prices fall below a minimum set price.
But, as with most things happening under the Trump administration, there's a catch which alludes to the post title: Is the US "winning big" against China with this ruling going forward? Ironically, the Trump administration's ongoing efforts to kill the WTO by starving its judicial system of appeals court judges may soon backfire: All China needs to seemingly do is appeal the case and it will come to a standstill since there will be insufficient numbers of appeals court judges to make an appeals ruling on this case...or any WTO appeals case for that matter:And there’s another issue: China’s policy of supporting producers by purchasing agricultural commodities at above-market prices has led to the accumulation of massive government stockpiles. By 2016, China had amassed 60 percent of the world’s cotton supplies, over 50 percent of its corn, 40 percent of wheat and 21 percent of soybeans.To dispose of these large stocks, the government periodically auctions them off at below-acquisition cost. Analysts believe China’s policies exert “a colossal influence” on world prices, given the size of its state reserves. A mass sell-off from China’s sugar reserves in 2016, for example, helped to push the global price of sugar down by almost a quarter.
Talk about shooting yourself in the foot: the United States--or at least the Barack Obama-era remnants of it--secure a famous victory at the WTO. However, the Trump administration, in its haste to render the WTO ineffective since it hates all kinds of multilateral institutions, has made enforcement of this ruling unlikely to happen.But the Appellate Body, well, is short of bodies. The Trump administration has been blocking all appointments to the Appellate Body as the terms of its current judges expire. The Appellate Body has been reduced to three judges — the minimum needed to adjudicate a dispute — with the remaining four of its seven seats vacant.Two of those judges will reach the end of their terms in December [2020], leaving the Appellate Body without enough judges to review cases.And once an appeal is lodged, a dispute settlement panel decision remains blocked until the decision of the Appellate Body. This means that without a functioning Appellate Body, China may be able to simply block the WTO ruling on its agricultural subsidies, placing the case in legal limbo.
Once more, good job, Trumpy (with a hat tip to trade-o-phobe USTR Robert Lighthizer).
