WT/DS517/R/Add.1  
 
18 April 2019  
(19-2574) Page: 1/68 
  Original: English  
 
  
CHINA – TARIFF RATE QUOTAS  
FOR CERTAIN AGRICULT URAL PRODUCTS  
REPORT OF THE PANEL  
Addendum  
This addendum  contains Annexes A to C to the Report of the Panel to be found in document  
WT/DS517/R . 
 
 
_______________  
 
 WT/DS517/R/Add.1  
 
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  LIST OF ANNEXES  
ANNEX  A 
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  4 
ANNEX B  
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of the United States  12 
Annex  B-2 Integrated executive summary of the arguments of China  32 
ANNEX  C 
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of Australia  51 
Annex  C-2 Integrated executive summary of the arguments of Brazil  54 
Annex  C-3 Integrated executive summary of the arguments of Canada  56 
Annex  C-4 Integrated executive summary of the arguments of Ecuador  60 
Annex  C-5 Integrated executive summary of the arguments of the European Union  63 
Annex  C-6 Integrated executive summary of the arguments of  Japan  65 
Annex  C-7 Integrated executive summary of the arguments of  Ukraine  67 
 
 
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  ANNEX  A 
WORKING PROCEDURES OF THE PA NEL 
Contents  Page  
Annex  A-1 Working Procedures of the Panel  4 
 
 
  WT/DS517/R/Add.1  
 
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  ANNEX  A-1 
WORKING PROCEDURES O F THE PANEL  
Adopted on 5 March  2018 
General  
 
1. (1) In this proceeding, the Panel shall follow the relevant provisions of the Understanding 
on Rules and Procedures Governing the Settlement of Disputes (DSU).  In addition, the 
following Working Procedures apply.   
(2) The Panel reserves the right to modify the se procedures as necessary, after consultation 
with the parties.  
Confidentiality  
2. (1) The deliberations of the Panel and the documents submitted to it  shall be kept 
confidential. Members  shall treat as confidential information  submitted by another Member  to 
the Panel  which that Member has designated as confidential.   
(2) Nothing in the DSU or in these Working Procedures shall preclude a party or third party 
from disclosing statements of its own positions to the public.  
(3) If a party submits a confidenti al version of its written submissions to the Panel, it shall 
also, upon request of a Member, provide a non -confidential summary of the information 
contained in its submissions that could be disclosed to the public.  
(4) Upon request, the Panel may adopt ap propriate additional procedures for the treatment 
and handling of confidential information after consultation with the parties.  
Submissions  
 
3. (1) Before the first substantive meeting of the Panel with the parties, each party shall 
submit a written submi ssion in which its presents the facts of the case and its arguments, in 
accordance with the timetable adopted by the Panel.  
(2) Each party shall also submit to the Panel, prior to the second substantive meeting of 
the Panel, a written rebuttal, in accorda nce with the timetable adopted by the Panel.  
(3) Each third party that chooses to make a written submission prior to the first substantive 
meeting  of the Panel with the parties shall do so in accordance with the timetable adopted by 
the Panel.  
(4) The Pa nel may invite the parties or third parties to make  additional submissions in the 
course of the proceeding, including with respect to requests for preliminary rulings in 
accordance with paragraph 4 below.   
Preliminary rulings  
4. (1) If China  considers that the Panel should make a ruling prior to the issuan ce of the Report 
that certain measures or claims in the panel request or the complainant's first written 
submission are not properly before the Panel , the following procedure applies . Exceptions to 
this procedure shall be granted upon a showing of good cau se.  
a. China  shall submit any such request for a preliminary ruling at the earliest possible 
opportunity and in any event no later than in its first written submission to the Panel. The 
United States shall submit its response to the request prior to the firs t substantive meeting 
of the Panel, at a time to be determined by the Panel in light of the request.    WT/DS517/R/Add.1  
 
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  b. The Panel may issue a preliminary ruling on the issues raised in such a preliminary ruling 
request before, during or after the first substantive meeting , or the Panel may defer a  
ruling on the issues raised by a preliminary ruling request until it issue s its Report to the 
parties.  
c. In the event that the Panel finds it appropriate to issue a preliminary ruling prior to the 
issuance of its Report, the Panel ma y provide  reasons for the ruling at the time that the 
ruling is made, or subsequently in its Report.   
d. Any request for such a preliminary ruling by the respondent prior to the first meeting, and 
any subsequent submissions of the parties in relation thereto prior to the first meeting, 
shall be  served on all third parties. The Panel may provide all third parties with an 
opportunity to provide comments on any such request, either in their submissions as 
provided for in the timetable or separately. Any p reliminary ruling issued by the Panel 
prior to the first substantive meeting on whether certain measures or claims are properly 
before the Panel shall be communicated to all third parties.  
(2) This procedure is without prejudice to the parties' right to re quest other types of 
preliminary or procedural rulings in the course of the proceeding, and to the procedures that 
the Panel may follow with respect to such requests.  
Evidence  
5. (1) Each party shall submit all evidence to the Panel no later than during th e first 
substantive meeting, except evidence necessary for purposes of rebuttal, or evidence 
necessary for answers to questions or comments on answers provided by the other party. 
Additional exceptions may be granted upon a showing of good cause.  
(2) If any new evidence has been admitted upon a showing of good cause, the Panel shall 
accord the other party  an appropriate period of time to comment on the new evidence 
submitted.  
6. (1) Where the  original language of an exhibit  or portion thereof is not a WTO working 
language, the submitting party or third party shall simultaneously submit a translation of the 
exhibit or relevant portion into the WTO working language of the submission . The Panel may 
grant reasonable extensions of time for the translation of exh ibits upon a showing of good 
cause.  
(2) Any objection as to the accuracy of a translation should be raised promptly  in writing, 
preferably no later than the next submission  or meeting (whichever occurs earlier) following 
the submission which contains the translation in question. Any objection shall be accompanied 
by a detailed explanation of the grounds for the  objection and an alternative translation.  
7. (1) To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submission s, each party and third party shall sequentially number its exhibits throughout the 
course of the dispute, indicating the submitting Member and the number of each exhibit on its 
cover page. For example, exhibits submitted by the United States should be num bered USA-
1 USA-2, etc. If the last exhibit in connection with the first submission was numbered USA-5, 
the first exhibit in connection with the next submission thus would be numbered USA-6.  
(2) Each party shall provide a n updated  list of exhibits  (in Wor d or Excel format) together 
with each of its submissions, oral statements, and responses to questions.  
(3) If a party submits a document that has already been submitted as an exhibit by the 
other party, it should explain why it is submitting that document again.  WT/DS517/R/Add.1  
 
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  Questions  
 
8. The Panel may pose questions to the parties and third parties at any time, including:  
a. Prior to any meeting, the Panel may send written  questions , or a list of topics it intends 
to pursue in questioning orally in the course of a meeting. The Panel may ask different or 
additional questions at the meeting.   
b. The Panel may put questions to the parties and third parties orally in the course of a 
meeti ng, and in writing following the meeting, as provided for in paragraph s 15 and 21  below.   
Substantive meetings  
 
9. The Panel shall meet in closed session.  
10. The parties shall be present at the meetings only when invited by the Panel to appear before 
it.  
11. (1) Each party has the right to determine the composition of its own delegation when 
meeting with the Panel.  
(2) Each party shall  have the responsibility for all members of its delegation and shall 
ensure that each member of its delegation acts in accordance with the DSU and these Working 
Procedures, particularly with regard to the confidentiality of the proceeding and the 
submissions of the parties and third parties.  
12. Each party shall provide to the Panel the list of members of its delegation n o later than 
5.00 p.m. (Geneva time ) three working days preceding the first day of each meeting with the 
Panel.   
13. A request for interpretation by any party should be made to the Panel as early as possible, 
preferably at the organizational stage, to allo w sufficient time to ensure availability of 
interpreters.  
14. The first substantive meeting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall invite the United States to make an opening statement to present its 
case first. Sub sequently, the Panel shall invite China to present its point of view. Before each 
party takes the floor, it shall provide the Panel and other participants at the meeting with a 
provisional written version of its statement. In the event that interpretation is needed, each 
party shall provide additional copies for the interpreters.  
b. Each party should avoid lengthy repetition of the arguments in its submissions. Each 
party is invited to limit the length of its opening statement to 60 minutes . If either part y 
considers that it requires more time for its opening statement, it should inform the Panel and 
the other party at least 10 days prior to the meeting, and it should also provide, at the same 
time, an estimate of the length of its statement. The Panel will  accord equal time to both 
parties for their statements.    
c. After the conclusion of the opening statements, the Panel shall give each party the 
opportunity to make comments or ask the other party questions.  
d. The Panel may subsequently pose questions to the parties.  
e. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with the United States presenting its statement first. Before 
each part y takes the floor, it shall provide the Panel and other participants at the meeting with 
a provisional written version of its closing statement , if available . WT/DS517/R/Add.1  
 
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  f. Following the meeting:  
i. Each party shall submit a final written version of its opening statemen t no later than 
5.00 p.m. (Geneva time) on the first working day following the meeting.  At the same 
time, each party should also submit a final written version of any prepared closing 
statement that it delivered at the meeting.   
ii. Each party shall send in writing, within the timeframe established by the Panel prior 
to the end of the meeting, any questions to the other party to which it wishes to receive 
a response in writing.  
iii. The Panel shall send in writing, within the timeframe established by the Panel prior to 
the end of the meeting , any questions to the parties to which it wishes to receive a 
response in writing.  
iv. Each party shall respond in writing to the questions from the Panel, and to any 
questions posed by the other party, w ithin the time -frame established by the Panel 
prior to the end of the meeting . 
15. The second substantive meeting of the Panel with the parties shall be conducted in the same 
manner as the first substantive meeting with the Panel, except that China shall b e given the 
opportunity to present its oral statement first. If China chooses not to avail itself of that right, 
it shall inform the Panel and the other party no later than 5.00pm (Geneva time) three working 
days day prior to the meeting. In that case, the United States shall present its opening 
statement first, followed by  China . The party that presented its opening statement first shall 
present its closing statement first.  
Third party session   
 
16. The third parties shall be present at the meetings only w hen invited by the Panel to appear 
before it.  
17. (1) Each third party has the right to determine the composition of its own delegation  when 
meeting with the Panel.  
(2) Each third party shall have the responsibility for all members of its delegation and shall 
ensure that each member of its delegation acts in accordance with the DSU and these Working 
Procedures, particularly with regard to the confidentiality of the proceeding and the 
submissions of the parties and third parties.  
18. A request for interpr etation by any third party should be made to the Panel as early as possible, 
preferably upon receiving the working procedures and timetable for the proceeding, to allow 
sufficient time to ensure availability of interpreters.  
19. (1) Each third party may pr esent its views orally during a session of the first substantive 
meeting with the parties set aside for that purpose.  
(2) Each third party shall indicate to the Panel whether it intends to make an oral statement 
during the third party session,  along with the list of members of its delegation, in advance of 
this session and no later than 5.00  p.m. (Geneva time) three working days preceding the first 
day of  the third party session of the  meeting with the Panel.  
20. The third -party session shall be conducted as follows:  
a. All parties and third parties may be present during the entirety of this session.  
b. The Panel shall first hear the oral statements of the third parties, who shall speak in 
alphabetical order. Each third party making an oral statement at the third -party session 
shall provide the Panel and other participants with a provisional written version of its WT/DS517/R/Add.1  
 
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  statement before it takes the floor . In the event that interpretation of a third party's oral 
statement is needed, that third part y shall provide additional copies for the interpreters.  
c. Each third party should limit the length of its  statement to 15 minutes, and avoid repetition 
of the arguments already in its submission . If a third party considers that it requires more 
time for its opening statement, it should inform the Panel and the parties at least 10 days 
prior to the meeting, and it should also provide, at the same time, an estimate of the 
length of its statement. The Panel will accord equal time to all third parties for the ir 
statements.    
d. After the third parties have made their statements, the parties shall be given the 
opportunity to pose questions to any third party for clarification on any matter raised in 
that third party's submission or statement.  
e. The Panel may subsequently pose questions to any third party.  
f. Following the third -party session:  
i. Each third party shall submit the final written version of its oral statement, no later 
than 5.00  p.m. (Geneva time) on the first working day following the meeting.  
ii. Each party may send in writing, within the timeframe to be established by the Panel 
prior to the end of the meeting, any questions to a third party or parties to which it 
wishes to receive a response in writing.  
iii. The Panel may send in writing, wit hin the timeframe to be established by the Panel 
prior to the end of the meeting , any questions to a third party or parties to which it 
wishes to receive a response in writing.  
iv. Each third party choosing to do so shall respond in writing to written que stions from 
the Panel or a party, within a timeframe established by the Panel prior to the end of 
the meeting . 
Descriptive part and executive summaries  
 
21. The description of the arguments of the parties and third parties in the descriptive part of the 
Panel report shall consist  of the integrated executive summaries provided by the parties and 
third parties, which shall be annexed  as addenda to the report. These integrated executive 
summaries shall not in any way serve as a substitute for the submissions  of the parties and 
third parties in the Panel's examination of the case.  
22. Each party shall submit one integrated executive summar y. The integrated executive 
summary shall summarize the facts and arguments as presented to the Panel in the party's 
writte n submission s, its oral statement s and its responses to questions following the 
substantive meeting s. The timing of the submission of the integrated executive summar y shall 
be indicated in the timetable adopted by the Panel.  
23. The integrated executive su mmary shall be limited to no more than 30 pages.   
24. The Panel may request the parties and third parties to provide executive summaries of facts 
and arguments presented in any other submissions to the Panel for which a deadline may not 
be specified in the  timetable.  
25. Each third party shall submit an integrated executive summary of its arguments as presented 
in its written submission and statement in accordance with the timetable adopted by the Panel. 
This integrated executive summary may also include a summary of responses to questions, if 
relevant. The executive summary to be provided by each third party shall not exceed 
six pages. If a third -party submission and/or oral statement does not exceed six pages in 
total, this may serve as the executive summa ry of that third party's arguments.  WT/DS517/R/Add.1  
 
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  Interim review  
 
26. Following issuance of the interim report, each party may submit a written request to review 
precise aspects of the interim report and request a further meeting with the Panel, in 
accordance with the timetable adopted by the Panel. The right to request such  a meeting shall 
be exercised no later than at the time the written request for review is submitted.  
27. In the event that no further meeting with the Panel is requested, each party may submit 
written comments on the other party's written request for revi ew, in accordance with the 
timetable adopted by the Panel. Such comments shall be limited to commenting on the other 
party's written request for review.  
Interim and Final Report  
28. The interim report, as well as the final report prior to its official cir culation, shall be kept 
strictly confidential and shall not be disclosed.  
Service of documents  
 
29. The following procedures regarding service of documents apply  to all documents submitted by 
parties and third parties in the course of the proceeding:  
a. Each party and third party  shall submit all documents to the Panel by submitting  them 
with the DS  Registry (office No. 2047) . 
b. Each party and third party shall submit  two paper copies of its submissions and two paper 
copies of its Exhibits  to the Panel  by 5.00 p.m. (Geneva time) on the due dates established 
by the Panel . The DS  Registrar shall stamp the documents with the date and time of 
submission . The paper version submitted to the DS Registry shall constitute the official 
version for the purpos es of submission deadlines and the record of the dispute.  
c. Each party and third party shall also send an email to the DS Registry, at the same time 
that it submits the paper versions, attaching an electronic copy, preferably in Microsoft 
Word format and PDF format, of all documents that it submits in paper. All such e -mails 
to the Panel shall be addressed to DSRegistry@wto.org , and copied to other WTO 
Secretariat  staff whose e -mail addresses have been provided to the parties in the course 
of the proceeding.  Where it is not possible to attach all the Exhibits to one email, the 
submitting party or third party shall provide the DS Registry with four copies of the Exhibits 
in CD -ROMs or DVDs.  
d. In addition, each party  and third party is invited to submit all documents through the 
Digital Dispute Settlement Registry (DDSR) within 24 hours following the deadline for the 
submission of the paper versions. If the parties or third parties have any questions or 
technical diff iculties relating to the DDSR, they are invited to consult the DDSR User Guide 
(electronic copy provided) or contact the DS Registry at DSRegistry@wto.org . 
e. Each party shall serve any document submitted to the Pa nel directly on the other party. 
Each party shall, in addition, serve any submissions  in advance of the first substantive 
meeting with the Panel directly on the third parties. Each third party shall serve any 
document submitted to the Panel directly on the  parties and on all other third parties. A 
party or third party may serve its documents on another party or third party only by e-
mail, on a CD -ROM or DVD, unless the rec ipient party or third party has previously 
requested a paper copy. Each party and thir d party shall confirm, in writing, that copies 
have been served on the parties and third parties, as appropriate, at the time it provides 
each document to the Panel.  
f. Each party and third party  shall submit  its documents to the DS  Registry and serve  copies 
on the other party (and third parties where appropriate) by 5.00  p.m. (Geneva time) on 
the due dates established by the Panel.   WT/DS517/R/Add.1  
 
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  g. As a general rule, all communications from the Panel to the parties and third parties will 
be via email. In addition to transmitting them to the parties by email, the Panel shall 
provide the parties with a paper copy of the Interim Report and the Final Report.  
Correction of clerical errors in submissions  
30. The Panel may grant leave to a party or thi rd party to correct clerical errors in any of its 
submissions (including paragraph numbering and typographical mistakes). Any such request 
should identify the nature of the errors to be corrected, and should be made promptly following 
the filing of the sub mission in question.  
 
 
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ANNEX  B 
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of the United States  12 
Annex  B-2 Integrated executive summary of the arguments of China  32 
 
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  ANNEX  B-1 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGU MENTS OF THE UNITED STATES  
EXECUTIVE SUMMARY OF THE U.S.  FIRST WRITTEN SUBMISSION  
China is both a significant producer and a significant consumer of grains, including wheat, 
rice, and corn.  China permits imports of these grains through the administration of tariff -rate quotas 
("TRQs") for wheat, long -grain rice, s hort- and medium -grain rice, and corn ( "grains ").  According 
to China 's own notifications and Chinese customs data, China 's TRQs for wheat, corn, and rice do 
not fill, despite market conditions indicating sufficient Chinese demand.  
China has breached nu merous of its obligations under Paragraph 116 of the Report of the 
Working Party on the Accession of China  ("Working Party Report "), incorporated by reference as a 
binding obligation into China 's Accession Protocol.  In particular, China administers its TRQs for corn, 
wheat, and rice inconsistently with six of these distinct obligations: (1) to administer the TRQ on a 
transparent basis; (2) to administer the TRQ on a predictable basis; (3) to administer the TRQ on a 
fair basis; (4) to admi nister the TRQ using administrative procedures that are clearly specified; (5) 
to administer the TRQ using requirements that are clearly specified; and (6) to administer the TRQ 
using timeframes, administrative procedures, and requirements that would not i nhibit the filling of 
the TRQs.  
The United States also explains how China breaches Article X:3(a) of the General Agreement 
on Tariffs and Trade 1994  ("GATT 1994 ") because China 's TRQ administration is not reasonable, 
because China: (1) utilizes vague el igibility criteria and allocation principles to allocate the TRQ that 
applicants cannot reasonably understand; (2) permits numerous authorized agents to independently 
interpret the vague criteria; (3) publishes applicant data for comment and "disagreement " without 
clear guidelines regarding how this information will be verified and used; and (3) fails to make public 
information regarding TRQ allocation or reallocation in a manner that would make importation 
feasible.  
I. PARAGRAPH 116  OF THE WORKING PARTY REPORT  
Transparent Basis  
 For TRQ administration to be on a transparent basis, the system or principles pursuant to 
which administration of the TRQ occurs must be easily discerned and understood.  If what is 
published does not allow Members and applic ants to easily understand the basis for TRQ 
administration then that publication alone would not be sufficient to satisfy this requirement. China 
does not administer its TRQs on a transparent basis, because: (i) the eligibility criteria and allocation 
principles set out in China 's instruments are vague and not "easily discerned; " (ii) China does not 
provide any public information regarding which entities received TRQ allocations and in what 
amounts; (iii) China does not make public what unused TRQ quantitie s, if any, are returned and 
made available for reallocation; and, (iv) China does not publicize information regarding which 
entities received reallocations of TRQ and in what amounts.  
First, the Allocation Notice  enumerates these basic criteria, but doe s not define them such 
that the requirements would be easily understandable or obvious to Members or potential applicants.  
The Allocation Notice  and Reallocation Notice  make clear that the basic criteria are preconditions of 
eligibility to receive TRQ.  H owever, Members and applicants cannot easily discern or understand, 
from the text of the 2003 Provisional Measures  and Allocation Notice  – even read with the application 
form itself – what all of the basic criteria are or how NDRC or its authorized agents might apply them 
in evaluating a TRQ application.  Therefore, because each of the basic criteria discussed above is not 
"easily discerne d or understood, " the basis on which China administers its TRQs is not transparent.  
China therefore breaches Paragraph 116.   
The 2003 Provisional Measures  and Allocation Notice  also set forth non -transparent allocation 
principles by which TRQs are all ocated.   As with the basic criteria described above, China 's 
instruments fail to define or explain the allocation principles on which allocation and reallocation of 
the relevant TRQs will be based.   WT/DS517/R/Add.1  
 
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It is unclear from the text of the 2003 Provisional M easures  or the Allocation Notice  how NDRC 
evaluates applicants ' "actual production and operating capacities. "  The instruments do not provide 
any context, or even content, for the factor "other relevant commercial standards. "  That is, there 
apparently are  "other " standards that are "relevant " to NDRC 's decision -making with respect to the 
allocation of TRQ amounts, but these are not identified in the 2003 Provisional Measures  or the 
Allocation Notice .  Among other principles not reflected in the Allocation Notice 's short statement of 
allocation principles, the Allocation Notice  does not address how NDRC determines which applicants 
will receive allocations of the portion of each TRQ reserved for state trading.   
China apparently verifies applicant information through a public comment process.  This 
additional step renders NDRC 's administration of the TRQ application and allocation process, 
including NDRC 's determinations with respect to both the basic criteria and allocation principles, 
much less cl ear, and increases applicants ' uncertainty regarding the status or sufficiency of their 
applications considerably.   
Second, China also fails to administer its grains TRQs on a transparent basis because it fails 
to provide information on the results of the TRQ allocation process.  Without such information, 
Members and applicants cannot understand how NDRC assesses the applicants and determines 
allocated amounts. Traders inside and outside of China lack the necessary commercial information 
to engage in im portation under the TRQs.   
Because China fails to make public the amounts allocated, the recipients of allocations, and 
the amounts allocated to different importing entities, China administers its TRQs through a process 
or set of rules or procedures t hat is not easily understood, discernable, or obvious, and thus not on 
a transparent basis, inconsistent with Paragraph 116 of the Working Party Report.   
Third, NDRC does not administer the TRQs on a transparent basis because it launches a 
reallocatio n process by publishing the annual Reallocation Notice , but does not provide information 
on what amounts, if any, were returned unused and are thus available for reallocation to other 
importers or interested entities.  China does not provide any additional information to Members, 
applicants or traders – either in the Reallocation Notice  or, for example, after the September 15 
deadline – regarding the amounts actually returned and available for reallocation.   
Without any information regarding the unused amounts returned and available for 
reallocation, Memb ers, potential applicants and traders do not even know whether a reallocation 
will, or did, take place in a given year.  Rather, the public simply sees the same Reallocation Notice  
issued every year, setting out the same application instructions and timefr ames without more.  
Finally, NDRC does not provide Members or the public, including traders inside and outside of 
China, with any information on the TRQ quantities actually reallocated, if any.  As with the initial 
allocation, without such information,  Members and reallocation applicants cannot understand how 
NDRC assesses the applicants and determines allocated amounts.  Additionally, without knowing the 
results of the allocation process, traders inside and outside of China lack the necessary commercia l 
information to engage in importation under the reallocated portion of the TRQs.  Thus, for these 
reasons as well, China fails to administer its TRQs on a transparent basis, in breach of Paragraph 
116 of the Working Party Report.  
Predictable Basis  
China fails to administer its TRQs on a "predictable " basis for many of the same reasons its 
administration is not on a "transparent " basis.  That is, the lack of clarity in China 's requirements 
and processes not only renders them not transparent, it preve nts Members and applicants from 
being able to easily predict or anticipate how administration will occur.  China 's TRQs are not 
administered on a "predictable " basis because: (i) the eligibility criteria and allocation principles are 
vague and Members and applicants cannot anticipate how they will be applied; (ii) China does not 
provide information on what amounts, if any, were returned unused and made available for 
reallocation; (iii) China does not provide information on which entities receive reallocatio ns and in 
what amounts; and, (iv) applicants receiving a state trading allocation cannot predict whether they 
will be able to import the full amount.  WT/DS517/R/Add.1  
 
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First, the basic criteria for TRQ eligibility and the allocation principles set out in China 's legal 
instruments are vague.  The unpredictability caused by the vagueness of the criteria is compounded 
in some cases by the fact that NDRC apparently verifies or supplements information submitted by 
an applicant by allowing any member of the public to submit th eir own comments and information 
if it is in "disagreement " with an applicant 's data.   
Second, China launches a reallocation process by publishing the annual Reallocation Notice, 
but does not publish information on what amounts, if any, were returned unused and are thus 
available for reallocation.  Without any information regarding the unused amounts returned and 
available for reallocation, Members, potential applicants and traders cannot easily predict or 
anticipate whether a reallocation will take pl ace in a given year.  Nor can they easily predict or 
anticipate how much of a reallocation they might receive were they to apply.   
Third, NDRC does not provide the public, including traders inside and outside of China, with 
any information on the TRQ quantities actually reallocated, if any.  As with the initial allocation, 
without such information, Members and reallocation applicants cannot easily predict or anticipate 
how NDRC assesses the various applicants and determines reallocated amounts.  Theref ore, 
Members and potential applicants are unable to easily predict or anticipate the outcome of the TRQ 
reallocation process generally, because they are not able to see or understand the outcome of prior 
processes.  
Finally, inability of applicants to a nticipate whether they might receive a state trading 
allocation leads to significant uncertainty for potential applicants due to the additional requirements 
associated with the state trading portion of the TRQ.  
Fair Basis  
China must administer its TRQs in an impartial manner and in accordance with rules or 
standards.  China does not administer its TRQs in an impartial manner or in accordance with rules 
or standards because in many instances no rules or standards exist and, where they do exist, they 
are vague or unclear.  
First, China 's administration is not impartial, or carried out in accordance with rules or 
standards, because the allocation principles enumerated in Article IV of the Allocation Notice  are not 
defined; or, in the c ase of "other relevant commercial standards, " not even identified.  Similarly, the 
allocation principles fail to set out clear rules and standards on the basis of which NDRC will make 
decisions regarding the allocation and reallocation of TRQ amounts.  
The vagueness of the allocation principles provided in China 's Allocation Notices  impacts not 
only whether to apply and the information submitted to obtain the amount applied for, but also the 
decision regarding how much to apply for.   
Applicants base  their decisions, including whether to apply for a TRQ allocation, which 
commodity to apply for, and what quantity to apply for, on the published legal instruments, including 
the annually issued Allocation  and Reallocation Notices .  Thus, applicants submit  information, 
including "quantity applied for " and "name of agricultural product quota applied for " based on their 
understanding of "actual production and operating capacities (including historical production and 
processing, actual import performance, and operating situation, etc.) and other relevant commercial 
standards. " 
Second, China 's administration is not impartial, or carried out in accordance with rules or 
standards, because the basic criteria are not defined.  It is also unclear how NDRC conside rs 
comments from the public where that information may go to "disagreement " with an applicant 's 
eligibility.  This aspect of China 's administrative process exacerbates the unfair nature of the 
administration, because not only do the basic criteria themselv es lack clear rules or standards, but 
the public opinions submitted could introduce bias or inequity due to the potential motivations of a 
submitter or the inability of NDRC or the applicant to verify or refute the information provided.   
The vagueness  of the basic criteria impacts not only the information  an applicant may submit 
to demonstrate eligibility, but also the decision whether to apply  at all.  Further, the application is 
not necessarily just the form supplied by NDRC as part of its annual Allocation Notice , but may also 
include "related materials submitted by the applicant " per Article 12 of the 2003 Provisional WT/DS517/R/Add.1  
 
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  Measures .  The vagueness of the criteria may result in applicants submitting more or less additional 
information at any of these stag es in the process.  Potential applicants may choose not to apply at 
all because they are unable to understand the basic criteria or because they perceive the criteria in 
a way that they conclude in error they are not eligible.  
Finally, applicants "bear responsibility for the authenticity of the application materials and 
information they submit. "  Applicants attest, on the application form, that they have read and 
understood the Allocation Notice and commit to guaranteeing "conformity with the grain impo rt 
tariff-rate quota application criteria stipulated by the government. "  Thus, the Allocation Notice puts 
the burden of demonstrating eligibility and attesting to accuracy on the applicant.  These applicants 
are basing their understanding of eligibility o n the only information available to them, the basic 
criteria in the annual Allocation Notices .  One applicant may attest that they guarantee conformity 
with the requirement to fulfill social responsibilities based on their understanding of that vague term,  
while another decides not to apply because they do not understand or are not comfortable attesting 
that they conform to the requirement because it is unclear.  
For these reasons, the use of vague and undefined eligibility criteria does not provide TRQ  
administration on a fair basis; that is, based on rules and standards which can be discerned and 
understood by Members and applicants.   
Therefore, because of the lack of clear rules or standards with respect to the evaluation of 
basic criteria, China  also fails to administer its TRQs on a fair basis, in breach of China 's commitments 
under Paragraph 116 of the Working Party Report.  
Clearly Specified Administrative Procedures  
The obligation under Paragraph 116 of the Working Party Report requires  that China use 
administrative procedures that are set out in plain obvious detail.  China does not administer its 
TRQs using administrative procedures that are "clearly specified " because (1) its allocation principles 
and reallocation procedures are vague  and undefined, or not specified at all; and (2) China does not 
clearly specify the procedure for obtaining NDRC approval to import through a non -state trading 
entity using a state trading quota after August 15.  
First, it is unclear from the text of th e 2003 Provisional Measures  or the Allocation Notice  how 
NDRC evaluates applicants ' "actual production and operating capacities. "  Second, the instruments 
do not provide any context, or even content, for the factor "other relevant commercial standards. "  
Third, the Allocation Notice  does not address how NDRC determines which applicants will receive 
allocations of the portion of each TRQ reserved for state trading. Fourth, China apparently verifies 
applicant information in part through a public comment proce ss.   This additional step renders 
NDRC 's determinations with respect to both the basic criteria and allocation principles unclear, and 
increases applicants ' uncertainty regarding the status or sufficiency of their applications.   
In addition, China does not clearly specify the procedures for seeking approval from NDRC to 
import state trading quota after August 15.  Neither the 2003 Provisional Measures,  nor Allocation 
Notice  specifies the procedure for obtaining NDRC approval, howe ver, nor details on what basis 
NDRC will determine whether to grant approval.  Although China makes clear there is a procedure  
to be utilized to seek approval to import state trading quota without COFCO after August 15, none 
of the measures specify what th at procedure is.  
Clearly Specified Requirements  
The obligation under Paragraph 116 of the Working Party Report requires that China use 
requirements that are set out in plain obvious detail.  China does not administer its TRQs using 
requirements that are "clearly specified " because its basic criteria, wh ich applicants must 
demonstrate compliance with in order to be eligible to receive TRQ allocation or reallocation, are not 
set out in plain or obvious detail.   
The Allocation Notice  and Reallocation Notice  make clear that the basic criteria are 
requir ements to receive a TRQ allocation.  However, the text of the 2003 Provisional Measures  and 
Allocation Notice  – even read with the application form itself – does not detail the basic criteria or WT/DS517/R/Add.1  
 
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  how NDRC or its local authorities might apply them in evaluat ing a TRQ application.  No other 
measures detail these requirements.   
Not Inhibit the Filling of Each TRQ  
China 's measures breach Paragraph 116 of the Working Party Report because China does not 
administer its TRQs using administrative procedures a nd requirements that would not inhibit the 
filling of each TRQ.  In the context of China 's TRQ administration, China must not employ timeframes, 
procedures, or requirements that would hinder, restrain, or prevent each TRQ from becoming full or 
being satisfied.  
First, China employs a single application process to allocate both the state trading and non -
state trading portions of the TRQ, without permitting applicants to choose which portion they apply 
for.  Nor can applicants understand the basis up on which NDRC will determine which applicants 
receive an allocation of the state trading portion, which restricts the TRQ Certificate holder from 
employing its importer of choice.   
Applicants do not have any information regarding how NDRC will determi ne which applicants 
will receive state trading allocations.  Therefore, they cannot anticipate whether they might receive 
an allocation of the state trading portion of the TRQ, or the non -state trading portion, which can be 
imported directly or through a n on-state enterprise, or both.   
Therefore, the uncertainty inherent in China 's process makes it more difficult to negotiate with 
potential exporters, contract for sale, and import the commodities.  These uncertainties may also 
induce applicants to limi t the quantities for which they apply, just as the potential inability to 
complete a contract through the state trading entity may increase the amount of unused TRQ 
allocations returned to NDRC by September 15.  And where a TRQ Certificate holder must retu rn 
unused amounts, she is not eligible to apply for a reallocation of TRQ amounts to be imported without 
the need to import through an STE.   
Second, China withholds critical information on the recipients of the initial allocation, and the 
amounts actu ally allocated and reallocated.  Thus, grain -exporting entities do not have information 
that is necessary to enter into commercial relationships with potential importers, inhibiting the filling 
of each TRQ.  
Specifically, China does not announce which applicants are allocated TRQ amounts and in what 
amounts, which prevents traders from understanding the TRQ allocations and making commercial 
arrangements to import the grains.  With respect to reallocation, traders have even less information 
and thus are less able to fill the TRQs in the short time period remaining.  Uncertainty about how 
much quota will be reallocated, or whether reallocation will take place at all, may make potential 
importers less likely to apply for a reallocation quota amount or lead them to apply for a smaller 
amount than they otherwise would have.  If any TRQ amounts are reallocated, the lack of information 
on recipients makes it more difficult and costly for traders in China and foreign exporters to identify 
recipients and enter int o contracts for sale or importation.   
Finally, the processing restrictions and penalties for non -use impose a significant burden on 
TRQ Certificate holders and discourages applicants from applying for the full amounts desired for 
import. These process ing requirements, and the inability of an importer to sell any unused imported 
products in the event its business needs or plans change, raises uncertainty and therefore increases 
costs for a TRQ Certificate holder.  Further, because unused amounts may be reported in the 
following year 's allocation application and may be counted against the applicant in the next 
allocation, the usage requirement incentivizes applicants to request a smaller  TRQ amount than it 
may otherwise wish to receive for commercial purp oses. 
The Allocation Notice  also provides that group enterprises possessing multiple processing 
plants must individually apply for, and individually use, TRQ allocations in the name of each 
processing plant.  An enterprise with multiple plants could no t import corn or wheat for use at one 
facility but then, for business reasons, choose to process it at another facility.  Again, the plant 
usage restriction would discourage applicants from applying for the quantity actually needed or 
desired for commercia l purposes.  The usage requirements therefore have the effect of inhibiting 
the filling of the TRQs.  WT/DS517/R/Add.1  
 
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  II. ARTICLE X:3( A) OF THE GATT  1994  
The manner in which China administers its TRQs is inconsistent with China 's obligations under 
Article X:3(a) of the  GATT 1994.  Of relevance in this dispute is China 's obligation to administer its 
TRQs in a "reasonable manner. "  An inconsistency with a Member 's WTO obligations under Article 
X:3(a) arises where "the identified features of the challenged administration n ecessarily lead to an 
inconsistency with Article X:3(a) with respect to the administration of laws and regulations in a 
uniform, impartial and reasonable manner. "  According to the panel in China – Raw Materials , 
"necessarily lead to an inconsistency " does not mean administration is unreasonable in every 
instance.  Rather, the administration may be inconsistent with Article X:3(a) if there is a "very real 
risk" or an "inherent danger " of unreasonable administration in a specific, identifiable situation.    
China fails to administer its TRQs in a "reasonable manner, " and therefore breaches Article 
X:3(a) of the GATT 1994, for several reasons.  
First, China fails to administer its TRQs in a reasonable manner because it announces and 
applies vague basic criteria and allocation principles that make it difficult for applicants to understand 
and comply with its requirements.  It is not rational, sensible, or appropriate to announce criteria 
and principles, but fail to make them comprehensible.  Furthermore, the allocation principles provide 
further uncertainty.  Again, the poorly specified allocation principles limit an applicant 's ability to 
interpret the Chinese government 's requirements for importers.  Applicants who receive limited TRQ 
allocations are una ble to understand which allocation principles may have caused their allocation.   
Second, China uses thirty -six separate provincial and municipal "authorized agencies " to 
receive and review applications for TRQ allocations and reallocations .  The Allocation Notice  
reiterates that these authorized agencies will act as the intermediary between the central level of 
NDRC and applicants.  Similarly, authorized local entities approved by NDRC are obligated to receive 
and review applications for TRQ allocation  and reallocation, referring applications that comply with 
the requirements to NDRC, and referring insufficient applications back to applicants.   
China 's TRQ administration instruments do not provide guidance to the authorized agencies 
regarding the d efinition or requirements associated with a number of the basic criteria. For this 
reason, applications made in one locality may receive different consideration and a different result 
than applications made in any of the other thirty -six locations.  Prior panels have found separate 
local entities interpreting overly vague criteria to be a circumstance that can result in non -sensible 
or irrational administration of laws, regulations, decisions, or rulings .   
Third, China provides for the publication of a pplicant data and permits the public to provide 
"disagreement, " "feedback, " and "opinions, " without providing relevant guidance regarding how 
these comments are vetted, considered, or impact the TRQ allocation process.  This aspect of China 's 
administrativ e process exacerbates the unreasonable nature of the administration, because not only 
do the basic criteria and allocation principles themselves lack clear rules or standards, but the public 
opinions submitted could introduce bias or inequity due to the po tential motivations of a submitter.  
Such a process prevents evaluation of TRQ applicants, and administrative decisions with respect to 
eligibility, from being made in a rational or sensible manner.    
China 's instruments do not provide any information  regarding how NDRC determines which 
applicants will receive which TRQ allocation, or how an individual entity 's TRQ allocation might be 
split between the non -state trading and state trading portions of the TRQ.   
Fourth, China does not publish informa tion regarding actual annual allocated TRQ volumes in 
the aggregate at the time of allocation (January 1), or in the aggregate at the time of reallocation 
(September 30).  Similarly, China does not publish information regarding the total allocated amount 
of the TRQ that must be imported through a state -owned enterprise, and what amount may be 
imported directly by TRQ Certificate holders.  This means meaningful information regarding the 
amount of wheat, rice, and corn permitted to be imported, as well as the  amount of unallocated TRQ 
available for subsequent applicants is not provided on an annual basis.   
Fifth, China does not release information regarding the specific TRQ allocation recipients or 
the TRQ volumes each recipient was granted.  This informa tion is particularly critical during the 
reallocation process when TRQ Certificate holders have a limited period of time within which to WT/DS517/R/Add.1  
 
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  contract for and import the authorized grain.  The lack of published information regarding the 
successful TRQ applicant s and permitted import volumes therefore further impedes the identification 
of appropriate importers to contract with, or to consolidate import volumes with, to permit cost -
effective importation.   
When coupled with the lack of clarity regarding the ba sic criteria, the failure to provide 
information regarding actual TRQ allocation and reallocation volumes prevents interested importers 
from understanding and utilizing the TRQ system.  Additionally, without knowing the results of the 
allocation process tr aders inside and outside of China lack the necessary commercial information to 
engage in importation under the TRQs.   
III.  ARTICLE XIII:3( B) OF THE GATT  1994  
Article XIII:(3)(b) of the GATT 1994 requires Members to provide public notice of both the 
"total quantity or value of the product or products which will be permitted to be imported during a 
specified future period ," and "of any change in such quantity or value. "  China does not provide 
information regarding: the quantity of wheat, rice, or corn permitted to be imported at the initiation 
of the TRQ period; any changes to the quantity permitted to be imported after unused TRQ amounts 
have been re turned to NDRC; or, any changes to this amount after reallocation of TRQ.   
Permission to import under the TRQ is only granted to successful applicants.  Thus, the amount 
of TRQ "which will be permitted to be imported during a specific future period " corresponds to the 
total amounts authorized on the TRQ Certificates issued to selected applicants.   
China does not provide a public notification of the amounts allocated under the initial allocation 
process.  This failure to provide even aggregate publ ic notice of the total volume for which permission 
to import has been granted under each TRQ is inconsistent with China 's obligation under Article 
XIII:3(b). China 's pro forma  announcement each year of the total TRQ quantities that it has 
committed to prov ide in its Schedule is not sufficient.  To succeed in satisfying its obligation to 
provide public notification of amounts "permitted to be imported, " China must publicly announce the 
amounts for which permission to import has in fact  been granted.  
China's TRQ administration is also inconsistent with the second public notice obligation, which 
requires Members to provide a public notification regarding any changes to quantities permitted to 
be imported.  When unused TRQ allocation amounts are surrendered to the local authorized agent 
as required by the annual Reallocation Notice , the total amount of product that "will be permitted to 
be imported " is reduced.  Thus, after September 15, the total quantity of product permitted to be 
imported has changed.   
China does not publish information regarding unused allocation amounts that TRQ holders 
return to NDRC, or regarding the amounts available to applications for potential reallocation.  
Because the return of unused TRQ allocations reflects a "change " in the total quantity "permitted to 
be imported, " China 's failure to publically announce the change in these amounts breaches its 
obligations under Article XIII:3(b) of the GATT 1994.  
Finally, it is not clear to applicants or importers whether in any given  year China in fact grants 
additional permission to any applicants for the importation of reallocated TRQ amounts.  Assuming 
the issuance of each annual Reallocation Notice  in fact indicates that NDRC will undertake a 
reallocation process, the results of t hat process would, again, change the total quantity of product 
"permitted to be imported during a specified future period. "    
IV. ARTICLE XI:1  OF THE GATT  1994  
Article XI:1 proscribes restrictions "on the importation " or "on the exportation " of any product.  
When considering "a limitation on action, a limiting condition or regulation " or "something that has 
a limiting effect " in the context of Article XI:1, panels and the Appellate Body have considered a 
wide range of factors affecting the co mpetitive opportunities and the ability to import products.   
China 's administration of its TRQs for wheat, rice, and corn imposes impermissible "restrictions 
… on the importation of " these grains within the meaning of Article XI:1 of the GATT 1994.  F irst, 
China 's administration of the state trading and non -state trading portions of the TRQ through a 
single application process creates significant uncertainty for TRQ applicants.  Each portion of the WT/DS517/R/Add.1  
 
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  TRQ has its own requirements and commercial considerat ions.  However, applicants cannot indicate 
for which TRQ portion they wish to apply, and do not know on what basis NDRC will determine which 
applicants receive allocations for which portion, or in what amounts.   
The inability of traders to anticipate what type of allocation they may receive leads to 
significant uncertainty for potential applicants, because different requirements and commercial 
considerations are associated with the state trading and non -state trading portions of the TRQ.   
The diff ering requirements and commercial consideration of state trading and non -state 
trading TRQ allocation, when combined with applicants ' inability to decide or predict which allocation 
they will receive and the time limits of contracting, result in significan t risks and uncertainty for TRQ 
applicants.  Furthermore, these requirements, uncertainty, and potential penalties associated with 
failure to import discourage applicants from applying for TRQ allocations at all, or may lead them to 
apply for a smaller TRQ  allocation than they might otherwise have in the absence of such uncertainty.  
These aspects of China 's TRQ administration thus constitute a restriction on the importation of rice, 
wheat and corn, in breach of Article XI:1 of the GATT 1994.  
Second, Ch ina imposes usage restrictions and penalties for non -use, which creates burdens 
and uncertainty for importers and thereby discourage use of the TRQs.  The restrictions impose 
limitations and limiting conditions on importation by creating or increasing risk s and uncertainties 
associated with importation, and thereby increasing the costs associated with importation.  
Restricting TRQ Certificate holders from selling or transferring imported wheat, rice, or corn creates 
waste and increases unnecessarily the cos t of using imported products in their production processes.  
Further, China 's restrictions prevents TRQ Certificate holders from reacting to commercial 
considerations in a meaningful way.  Failure to utilize all imported grain covered by a TRQ Certificate 
may lead to reductions in the next year 's allocation.  To avoid these outcomes, TRQ applicants would 
request a smaller amount of imports than they might otherwise request if acting pursuant to their 
commercial interests, rather than in the light of China 's requirements and penalties.  
Previous panels have found that measures imposing limitations of this kind constitute 
restrictions under Article XI:1 of the GATT 1994.    China 's requirements thus constitute a 
"restriction… on the importation " of these pr oducts, in breach of China 's obligations under Article 
XI:1 of the GATT 1994.  
EXECUTIVE SUMMARY OF THE U.S ORAL STATEMENTS AT THE FIRST MEETING  
[Summaries of the U.S. oral statements at the first substantive meeting are reflected in the 
Executive Summa ry of the U.S. First and Second Written Submissions.]  
EXECUTIVE SUMMARY OF THE U.S.  RESPONSES TO THE PANEL'S FIRST SET OF QUESTIONS  
[Summaries of the U.S. responses to the Panel 's questions are reflected in the Executive 
Summary of the U.S. First and Second Written Submissions.]  
EXECUTIVE SUMMARY OF THE U.S.  SECOND WRITTEN SUBMISSION  
In an attempt to rebut the prima facie  showing of the United States, China advances a series 
of unsubstantiated assertions that according to China explain the admi nistration "in practice " of 
China 's TRQs.  When asked for evidence regarding these alleged practices by the Panel and for more 
information on TRQ allocation and reallocation generally by the United States, China has provided 
little more than general assert ions and "confirmation " from Chinese government officials.  China has 
not provided documentation, data, legal instruments, or any other evidence, as requested by the 
Panel and the United States, to substantiate its assertions on those alleged TRQ administr ation 
practices, or to demonstrate compliance with its WTO obligations.  
The Panel is to assess the facts put forward by both parties to the dispute.  The Panel would 
need to weigh the evidence on the record in this dispute to make its findings of fact and consider 
the arguments made by both parties on "the applicability of and conformity with the relevant covered 
agreements. "  If the Panel has rejected China 's assertions as to alleged NDRC "practices, " then these 
non-facts (unsubstantiated allegations) cannot provide further bases in support of the U.S. claims.  WT/DS517/R/Add.1  
 
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  However, it may be that the Panel finds it appropriate to address certain arguments of China or the 
United States relating to these assertions as part of the Panel 's explanation of its interpreta tion or 
its application of the provisions of the covered agreements to the facts (including the substance of 
the measures).   
The U.S. First Written Submission established that the legal instruments establishing China 's 
TRQ administration are inconsist ent with China 's WTO obligations.  China 's assertions, even aside 
from not being supported by evidence, only underscore China 's failure to comply with its WTO 
obligations rather than demonstrate compliance.  
I. CHINA FAILS TO REBUT THE U.S.  CLAIMS UNDER PARAGRAPH 116 
China "does not disagree with the United States concerning the ordinary meaning of the terms 
that comprise the six obligations referenced by the United States, and China does not disagree with 
the United States concerning the legal standard that should be applied by the Panel. "  China in this 
manner accepts both the substance of the legal obligations and agrees that each obligation should 
be considered independently.  
Transparent Basis  
China primarily disagrees with what is required for China to administer its TRQs on a basis 
that is "easily understood, discerned, or obvious. "  China addresses certain of the bases set out by 
the United States but fails to rebut the prima facie  case made by the United States.  
First, China does not address the inconsistency of the basic criteria with Paragraph 116, except 
to indicate that it does not use the basic criteria to determine eligibility.  
Second, with regard to allocation principles, Chi na asserts that, for purposes of China 's 
obligation to administer its TRQs on a transparent basis, "it is sufficient for applicants to know that 
TRQs will be allocated in accordance with applicants ' actual production and operating capacities 
(including his torical production and processing, actual import performance, and operations) and 
other relevant commercial standards. " However, China 's legal instruments do not provide any 
context, or even content, for "other relevant commercial standards. " Further, Chin a, noting that its 
allocation of TRQs "is not automatic, " states that it "does not believe, however, that transparent . . 
. TRQ administration requires the elimination of any element of discretion from the allocation 
process. "  China does not recognize the  relationship between this discretion and its WTO obligations, 
rather, it states that "China 's view that this is the most transparent  . . . way of achieving full 
utilization of the TRQ should not be ‘second guess[ed]. '"  
China relies on the Headnotes to Schedule CLII to defend the use of "other relevant 
commercial standards, " suggesting that the Schedule 's reference to a "residual category " authorizes 
China to publish the vague "other relevant commercial standards, " without further definition.  
However , even aside from the fact that this language only applied to the first year, Schedule CLII 
can neither shield China from other obligations in the covered agreements, nor provide derogations 
from the obligations provided in those agreements.  Further, noth ing in the Schedule indicates that 
China need not specify what these standards are in the measures that actually implement the TRQs, 
and indeed China 's Schedule CLII contemplates distribution based on "relevant commercial criteria, 
subject to specific cond itions to be published. "  Thus, the Headnotes anticipate the publication of 
more detail in line with China 's Paragraph 116 obligation to administer TRQs on a transparent basis.   
Third, China does not consider publication of information to be required by the obligation to 
administer TRQs on a transparent basis.  China argues that because applicants may request certain 
information, on an individual basis, there is no inconsistency with its obligation to Members to 
administer its TRQs on a transp arent basis.  China 's responses disregard the affirmative nature of 
China 's obligation to ensure that China  administers its TRQs on a transparent basis.  China also 
argues that information on which entities received TRQ allocations is business confidential .  The 
United States continues to disagree.  
Finally, China argues its failure to provide information on amounts returned and reallocated 
does not amount to inconsistency with its obligations because "China 's Schedule CLII commitments 
incorporate a pub lication schedule that is irreconcilable with publishing additional information 
regarding reallocation in advance of or after the September 15 deadline. "  China 's Schedule does WT/DS517/R/Add.1  
 
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  not comprise a "publication schedule; " rather, the Headnotes set out certain de adlines for the 
allocation and reallocation process.  The Schedule does not limit or prohibit the publication of 
information, including information necessary to ensure that China administers its TRQs on a 
transparent basis.  
Predictable Basis  
China fails to directly address the claims that it does not administer its TRQs on a predictable 
basis.   
First, China states that it "does not contest the U.S. claim, " and thus appears to concede that 
the basic criteria are inconsistent with Paragraph 116, including the requirement to be administered 
on a predictable basis.   
Second, with regard to whether its allocation principles are sufficiently predictable, China relies 
on the same argument made in response to the claim that they are not transparent because China 
addresses, collectively, the separate claims regarding the allocation principles. China fails to provide 
any reason its allocation principles are sufficient to meet the obligation to administer its TRQs in a 
predictable manner.  
Third, Chi na fails to directly address the claims that it does not administer its TRQs on a 
predictable basis because China does not provide information on what amounts, if any, were 
returned unused and made available for reallocation, and because China does not pro vide 
information on which entities receive reallocations and in what amounts.  Rather, China addresses 
the lack of information generally, relying on the availability of individual inquiries, Schedule CLII, 
and business confidentiality to assert China admin isters its TRQs consistent with Paragraph 116 as 
a whole.  These arguments are insufficient to rebut the U.S. case that China does not administer its 
TRQs on a predictable basis.  
Finally, the United States demonstrated that China does not administer it s TRQs on a 
predictable basis because applicants receiving a state trading allocation cannot predict what type of 
allocation they will receive and whether they will be able to import the full amount.  China disagreed 
with the factual basis for this argumen t, asserting that "applicants do not receive allocations from 
the STE portion of each TRQ . . .  [t]he entire STE portion of each TRQ is allocated to COFCO. "  
China 's asserted "practice " is inconsistent with its measures.   
Regardless of whether China "in practice " allocates the STE portion to COFCO, non -STE 
applicants, or both, the legal instruments relied upon by applicants indicate that applicants could 
receive (1) an STE portion of the TRQ, which will be required to be imported through COFCO, (2) a 
non-STE portion, or (3) a mixed allocation, a portion of which will be subject to the requirement to 
import through COFCO.  The inability of applicants to anticipate whether they might receive a state 
trading allocation thus leads to significant uncertaint y for potential applicants, and is inconsistent 
with Paragraph 116.  
Fair Basis  
China does not contest the U.S. claim that China 's basic criteria are unfair, but claims this is 
insufficient to find an inconsistency with Paragraph 116 because "Paragraph 116 relates to the 
administration of the TRQs as a whole. "  China 's argument is without merit.   
China again argues that it is entitled to discretion, and thus China 's determination that a basis 
is fair should not be second -guessed.  However as noted above, China 's TRQ administration, 
including any exercise of discretion in allocating TRQs, must be consistent with its WTO obligations.   
Clearly Specified Procedures  
With respect to the claim that China does not clearly specify the proced ure for obtaining NDRC 
approval to import a state trading quota through a non -state trading entity after August 15, China 
concedes "the 2017 Allocation Notice  provides no further detail regarding the post -August 15 
approval process. "   WT/DS517/R/Add.1  
 
- 22 - 
 
  
Clearly Specified  Requirements  
China does not contest that the basic criteria are "requirements " or that they are not clearly 
specified.  However, China asserts that "the articulation of the basic criteria constitutes a specific 
aspect of China 's administration of the TRQs, while Paragraph 116 relates to the administration of 
the TRQs as a whole. "  The basic criteria are requirements used to administer the TRQs.  Failure to 
ensure that these are clearly specified is inconsistent with Paragraph 116.   
With respect to  allocation information, China asserts that because any grain -exporter can use 
the applicant information published in the Announcement of Applicant Enterprise Data  "to identify 
companies with the capacity to meet its needs and make overtures accordingly, " the information 
China presently provides does not inhibit the filling of each TRQ.  The Announcement of Applicant 
Enterprise Data  lists entities that applied for TRQ, but does not indicate whether a given applicant 
received an allocation.  Therefore a grai n exporter could not use the applicant information "to identify 
companies with the capacity to meet its needs " because between 48 and 77 percent of the applicants 
listed have no authorization to import pursuant to the TRQs at all.  China points to a work -around 
that entities could deploy to mitigate the impact, which does not diminish China 's obligation to not 
inhibit the fill or excuse China 's failure to provide sufficient public information regarding the results 
of the allocation process.  
China chara cterizes the processing requirement as follows:  "End users that do not have 
sufficient capacity to process the raw grains that they import under their quota may sell those 
imported grains to other entities for processing. "  The distinction between end use rs with processing 
capacity and those without sufficiency capacity to process the grains they import is absent from 
China 's legal instruments.  But if China differentiates its application or enforcement of the 
requirement based on the end user 's capacity, this further demonstrates the claim that the 
restriction, coupled with penalties for non -use, inhibits the filling of each TRQ.  
Not Inhibit the Filling of Each TRQ  
China must not employ timeframes, procedures or requirements that would hin der, restrain, 
or prevent each TRQ from becoming full or being satisfied.  
With regard to the first reason for inconsistency, that administering both portions of the TRQ 
in a single process inhibits the filling of each TRQ, China responds only that the  U.S. claims "largely 
repeat the U.S. arguments in relation to transparency and predictability and therefore are similarly 
inapplicable in light of the allocation of entire STE portion of the TRQ to COFCO. "  China 's response 
fails to rebut the prima facie  case because China 's own legal instruments and Schedule CLII indicate 
that end users, including non -STE end users, who apply for TRQ allocations can receive an STE 
portion of the TRQs.   
China also fails to rebut the second argument, that China 's failure to provide sufficient public 
information regarding the results of the allocation and reallocation process prevents traders, 
including foreign exporters, from making use of the TRQ amounts available.  The Announcement of 
Applicant Enterprise Data  lists entities that applied for TRQ, but does not indicate whether a given 
applicant received an allocation.  Therefore a grain exporter could not use the applicant information 
"to identify companies with the capacity to meet its needs " because between 48 an d 77 percent of 
the applicants listed have no authorization to import pursuant to the TRQs at all.   
  Third, China imposes restrictions on the use of imported products, coupled with penalties for 
non-use, which also discourage applicants from applying  for the full quantities desired.  China 
responds that, on the contrary, the usage restriction encourages full TRQ utilization.  But China 's 
response focuses on a different aspect of its measures – the penalties for failure to import and use 
a TRQ allocati on – not the restrictions on the use  of the imported product.  The United States has 
not challenged a general prohibition on the sale or transfer of TRQ Certificates, or what China 
characterizes as a "restriction on transferring or selling the quota itself ."   
Further, China 's annual publication  of these usage restrictions, as notified to potential 
applicants by the Allocation Notice , creates uncertainty because an applicant understands it must 
apply for a specific amount of each TRQ and will be respons ible for processing the grains once 
imported, without any flexibility to process elsewhere should circumstances change between 
applying and importing.  Further, because the potential applicant understands that unused amounts WT/DS517/R/Add.1  
 
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  may be reported and counted aga inst the applicant in the next allocation, the usage requirement 
incentivizes an applicant to request a smaller TRQ amount than it may otherwise wish to receive for 
commercial purposes, regardless of how China applies or enforces the requirement in practic e. 
Thus, the combination of restrictions on the usage of imported products and the penalties 
imposed on TRQ Certificate holders for failing to import the full TRQ amounts would therefore inhibit 
the filling of the TRQs.   
II. CHINA'S ASSERTIONS PROVIDE ADDITIONAL BASES FOR FINDING INCONSISTENCIES WITH 
PARAGRAPH 116 
In its First Written Submission, China highlights "certain key aspects of its system for 
administering its grains TRQs that the United States overlooked or misunderstood  in its description 
of China's legal framework for administering its TRQs. "  However, China 's description of these "key 
aspects " directly contradicts China 's own legal instruments, announcements, and other publically 
available information, and, if accurate , demonstrates further inconsistency with the obligations in 
Paragraph 116.  The United States notes that the characterization "if accurate " is important because 
China has provided no evidence to support its assertions.    
Allocation of STE Portions to COFCO China Allocates the Entire STE Portion 
to COFCO and COFCO is Not Required to Return Unused Amounts, 
Inconsistent with Paragraph 116  
Based on the legal instruments, and absent different information on allocation of the STE 
portion of each TRQ, Mem bers, applicants, and other interested entities would necessarily 
understand and predicate application decisions on the understanding that they could be allocated an 
amount of the STE TRQ portion, or receive a mixed allocation of both the STE and non -STE p ortion, 
which would need to be imported through different entities.  However, China asserts in this 
proceeding that, in practice, COFCO is allocated the full STE portion of each TRQ, which is between 
50 percent and 90  percent of each TRQ, depending on the grain.  In addition, China now asserts 
COFCO is not required to return any unused portion of its TRQs for reallocation.  China 's published 
measures do not expressly provide for COFCO 's exemption from this requirement, nor is it 
discernable based on China 's measures.   
If accurate, China 's assertions that the entire STE portion of each TRQ is allocated to COFCO, 
and that COFCO is not required to return unused amounts, are inconsistent with China 's obligations 
to administer each TRQs on a basis that is (a ) transparent, (b) predictable, (c) fair basis, and (d) 
does not inhibit its filling.   
First, the actual basis for TRQ administration is not discernable because NDRC does not 
publish, indicate, or otherwise disclose the fact that COFCO receives the en tire STE portion, and this 
significant portion of each TRQ (50 to 90 percent depending on the commodity) is therefore 
unavailable to applicants.  Based on Schedule CLII and China 's legal instruments, if an STE is an end 
user then any TRQ allocated must be returned or a penalty assessed.  If, as China asserts, COFCO 
is not required to return unused portions, China does not administer its TRQs on a transparent basis.  
Second, the legal instruments China issues lead Members, applicants, and other interested  
entities to anticipate being able to receive an allocation of the STE portion, non -STE portion, or a 
mixed allocation.  Thus, where a Member, applicant, or other interested entity sought to anticipate 
the TRQ allocation, reallocations, and other administr ation requirements based on the system of 
rules and procedures established by China 's legal instruments, the prediction is incorrect.  Instead, 
China claims that in practice it allocates the entire STE portion to COFCO, and does not require 
COFCO to return  unused quota.  The actual basis for TRQ administration is thus not predictable 
because NDRC does not publish, indicate, or otherwise disclose this information.  
Third, China asserts that "[a]pplicants become aware of this practice through their 
partici pation in the TRQ administration system. "  China 's obligation is not just to "applicants, " but 
to other Members.  This practice further suggests that China 's TRQs are not allocated or administered 
in accordance with rules and standards, or on an impartial basis.  That is, China ignores the basic 
criteria and allocation principles purporting to be rules or standards, and instead allocates between 
50 to 90 percent of each TRQ to a single government controlled entity regardless of its interest in WT/DS517/R/Add.1  
 
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  importing the  grains or any other published criteria.  This practice is not in accordance with rules 
and standards.  
Fourth, China sets out a clear requirement that all end users return unused amounts for 
reallocation, but in fact COFCO is not subject to this requi rement, nor does COFCO appear to be 
penalized for its failure to comply.  This practice again appears to be neither impartial – as it treats 
the government owned entity more favorably than other end users – nor in accordance with China 's 
own rules and standards.   
NDRC 's allocation of the STE portion of each TRQ to COFCO, and the exemption of those 
significant portions from the requirement to return unused amounts for reallocation inhibits the fill 
of each TRQ.  The results of this practice are significant and recognized in these proceedings.  
Specifically, while China declined to provide specific fill rates for the STE and non -STE portions of 
the TRQs, China asserts that "the non -STE portion of each TRQ was fully allocated and fully  utilized. "  
Therefore, necessarily COFCO is declining to import large volumes of its allocations each year , and 
its failure to return unused quantities is ensuring that this TRQ quantity is not available to other 
entities.  
Therefore, in 2017 between  25 and 61 percent of each TRQ was not available for reallocation 
to applicants.  This effectively excluded from China 's TRQ administration a significant volume of 
wheat, corn, and rice, despite measures and an annual Allocation Notice announcing the sched uled 
amounts available for allocation and reallocation.  This scenario squarely fits within the plain meaning 
of "inhibit the filling. "   
China 's Reliance on Credit China Instead of Published Criteria is 
Inconsistent with Paragraph 116  
China assert s that it roundly ignores each of the basic criteria; China now states that "in 
practice, [China] does not conduct an individual assessment of the Basic Criteria, " but rather uses 
an unannounced evaluation method – Credit China reviews – to evaluate an app licant 's eligibility.  
China 's assertion is inconsistent with China 's obligations to administer TRQs (a) on a transparent 
basis; (b) on a predictable basis; (c) on a fair basis; and (d) using clearly specified requirements.     
First, even assuming arguendo , that China 's unsupported assertions are accurate, using an 
unannounced method of determining eligibility is even less transparent than using a vague, but 
announced method.  Members, applicants, and other interested entities cannot discern that NDRC  
relies solely on Credit China.  Given China 's statements it is unclear which information contained in 
the Credit China system is used to evaluate applicants, resulting in an application process, the basis 
on which China administers its TRQs, that is not e asily understood or discernable.  
Second, China sets out a basis on which it purports to administer TRQs but uses another basis; 
Members, applicants and other interested entities are not able to anticipate how TRQs will be 
allocated based on the measu res.   
Third, while the annually announced basic criteria purport to establish the rules and standards 
for TRQ administration, China conceded it does not administer its TRQs in accordance with these 
rules and standards.  It is plainly inconsistent wit h China 's Paragraph 116 obligations to administer 
its TRQs in contravention of, or with disregard for, announced rules and standards.  Therefore based 
on China 's assertion, China does not administer its TRQs on a fair basis.  
Finally, by publishing the annual Allocation Notice, China is notifying the public, including 
Members, applicants, and other entities, that applicants must demonstrate compliance with the basic 
criteria to be eligible for a TRQ allocation.  NDRC annually p ublishes a list of criteria, but rather uses 
unannounced requirements – verified by the Credit China report – to evaluate an applicant 's 
eligibility.  Therefore, the requirements used to administer TRQs are not specified at all, and China 
is inconsistent w ith its obligations under Paragraph 116.  
China 's Procedure for Verification and Rebuttal of Public Comments  
Each year China issues an Announcement  of Applicant Enterprise Data for Import Tariff -Rate 
Quotas for Grains, and provides an opportunity f or the public to submit comments to NDRC regarding WT/DS517/R/Add.1  
 
- 25 - 
 
  each applicant.  No other measure or legal instrument references, let alone describes, the public 
comment process.   
China now asserts that if NDRC receives a comment regarding a particular applicant, an 
administrative procedure to verify its accuracy, including an opportunity for the applicant to rebut 
the comment, is used to determine whether the comment should be considered in determining the 
applicant 's eligibility.  This statement is uns upported by the measures or any other evidence on the 
record.  
The verification and rebuttal process described by China is an administrative procedure, that 
is, it is a set of instructions for performing a specific task.  Here, the task is verifying a public 
comment by collecting additional information and soliciting a response from the applicant.  China 
has made no effort however to specify or even notify Members, applicants, or other entities of this 
procedure.  It is not described, referenced, or oth erwise suggested by any measure or information 
provided by China.  For this additional reason, China does not administer its TRQs consistent with 
Paragraph 116.  Article IV of the Allocation  Notice does not indicate that NDRC applies different 
principles d epending on applicant type.  Rather, it suggests that all of these factors will be 
considered.   
China Asserts that Different Allocation Principles Apply to Certain Applicant 
Types  
China now states that with respect to allocation of the non -STE po rtion, a general trade TRQ 
applicant's historic import performance is the most important factor in determining the amount of 
the allocation.  For a processing trade applicant, the applicant 's production and processing capacities 
are key factors in addition  to its historic performance in determining the amount of the allocation.  
In addition, China asserts that new applicants are only considered if the TRQ is not fully allocated to 
applicants with historical import performance.  The legal instruments provide d by China do not reflect 
this. 
China 's asserted practice diverges from its publicly announced legal instruments and would 
thus be inconsistent with its obligation to administer TRQs on a transparent basis.  Noting that China 
is obligated to administe r its TRQs based on a system or principles that are easily discerned and 
understood, China has in this instance announced one set of principles and subsequently indicated 
that it is using an alternative, unannounced set of principles in practice.  This is simply not a 
transparent basis for administering its TRQs.    
China sets out a basis on which it purports to administer TRQs but uses another basis; 
Members and traders are not able to anticipate how TRQs will be allocated based on the measures. 
There fore, China again purports to set out a process or set of rules or principles for allocating TRQ 
Certificates, but asserts it in practice applies a different set of principles.  Moreover, China applies 
the principles differently to different types of appli cants, without disclosing this to Members, 
applicants, or other interested entities.  For these reasons, Members, applicants, and other 
interested entities cannot anticipate or plan for the basis on which allocation amounts are actually 
determined.   
China Does Not Apply or Enforce the Usage Requirements to Certain TRQ 
Holders with Insufficient Processing Capacity  
China 's Allocation Notice makes clear that TRQ Certificate holders must process in their own 
facilities all wheat and corn imported purs uant to the TRQ.  Because TRQ holders are also penalized 
for not using ( i.e., importing) their allocations, applicants are incentivized to limit their applications 
according to their processing capacities.  China asserts that it would not apply or enforce the 
processing requirement in accordance with the rules and principles set out in the Allocation Notice.   
The Allocation Notice does not suggest this kind of flexibility, or provide any guidance regarding how 
NDRC evaluates an applicant 's or a TRQ Certific ate holder 's current capacity for purposes of this 
requirement.   
China 's assertions regarding its usage restrictions, namely, that it would not uniformly apply 
the processing requirement set out in the Allocation Notice, further demonstrates that China does 
not administer its TRQs on a predictable basis or using clearly speci fied requirements.  China 
publishes a processing requirement applicable to all TRQ holders, but asserts it would apply or WT/DS517/R/Add.1  
 
- 26 - 
 
  enforce the requirement only with respect to certain TRQ holders.  Non -enforcement of significant 
requirements at the discretion of ND RC renders China 's administration unpredictable.    
China 's publication of a processing requirement applicable to all TRQ holders, but application 
or enforcement of the requirement only with respect to certain TRQ holders, is inconsistent with its 
obligation to administer TRQs using clearly specified requirements.  The Allocation Notice does not 
indicate this varied application, nor does it indicate how NDRC determines an applicant 's capacity 
for purposes of this requirement.   
China has thus fail ed to clearly specify its requirements for use of the imported grains.  
Instead, China has led Members, applicants, and other interested entities to believe one requirement 
exists, while secretly imposing a different standard.  In this circumstance, China has not sufficiently 
specified its TRQ administration requirements to comply with Paragraph 116.  
III. CHINA FAILS TO REBUT AND PROVIDES ADDITIONAL BASES FOR FINDING INCONSISTENCY WITH 
GATT  1994  
Neither China 's legal nor factual arguments demonstrate that it has not acted inconsistently 
with its obligations.  Moreover, many of China 's largely unsupported factual assertions, if true, would 
demonstrate additional inconsistencies.  
Article X:3(a) of the GATT 1994  
Neither China 's legal nor factual a rguments demonstrate that it has not acted inconsistently 
with its obligations.  Moreover, many of China 's largely unsupported factual assertions, if true, would 
demonstrate additional inconsistencies with GATT 1994 Article X:3(a).  
First, China, in it s First Written Submission, asserts that to be inconsistent with Article X:3(a) 
the cited administrative practice must "necessarily lead[] to an unreasonable administration of the 
grains TRQs. "  China suggests that the "necessarily leads " approach is stric ter than the one 
contemplated by the panel in China – Raw Materials , which described administration where there is 
"a very real risk " of unreasonable administration as inconsistent with Article X:3(a).  In this vein, 
China also asserts that the availabilit y of an alternative means of "achieving a Member 's stated 
administrative objective does not render a Member 's chosen means unreasonable. "  The description 
of the interpretative approach provided by the panel in China – Raw Materials  is a restatement of 
the interpretative approach described in the Appellate Body report for EC – Selected Customs Matters  
and panel report for Argentina – Hides and Leathers , and in any event, China has failed to comply 
with Article X:3(a) applying any of the interpretative approaches.   
Second, even while China accepts that no showing of trade effects is required, China asserts 
that "‘Article X:3(a) requires an examinat ion of the real effect that a measure might have on traders 
operating in the commercial world. '"  The structure and requirements built into a particular measure 
may be sufficient to demonstrate a breach of Article X:3(a).  
Six separate aspects of Chin a's TRQ administration result in unreasonable administration.  
Neither China 's First Written Submission, nor China 's Responses to Panel Questions respond in any 
meaningful way to the evidence presented by the United States of China 's inconsistency with Art icle 
X:3(a) of the GATT 1994.   
First, China asserts that the lack of proper basic criteria does not cause "any negative impacts 
– actual or possible – on TRQ applicants, " because while the criteria listed are erroneous it simply 
uses information typi cally supplied by the applicant to determine eligibility.  However, the failure to 
provide clear applicant criteria is not just an issue for NDRC and its authorized agents who must 
determine eligibility, but for Members and those potential applicants to wh om the criteria are 
communicated.  These criteria discourage new applicants who are unable to interpret China 's 
requirements, as well as applicants who have previously failed to receive an allocation.  China asserts 
that applicants can just seek informatio n regarding their rejection from NDRC, but the annual 
publication of erroneous criteria suggests they would not even understand the appropriate questions 
to ask.  
Second, in response to concerns raised regarding the allocation principles, China assert s that 
the "alleged vagueness of the Allocation Principles " does not "necessarily lead[] to an unreasonable WT/DS517/R/Add.1  
 
- 27 - 
 
  administration of the TRQ. "  However, it is unclear from the text of the 2003 Provisional Measures  
or the Allocation Notice  how NDRC evaluates appli cants ' "actual production and operating 
capacities. "  Failure to provide this information to applicants results in administration that is not 
sensible or rational.  Moreover, taken together with the additional catch -all, "other relevant 
commercial criteria ," this creates additional confusion for applicants.   
Third, China simply rejects as a "misunderstand[ing] " the role that authorized agencies play 
in the administration of China 's TRQs.  Rather, both the 2003 Provisional Measures  and the annual 
issued Allocation  and Reallocation Notices  call for an evaluation by the local authorized agents of 
whether the applicant has met the basic criteria.  Structuring its TRQ administration so as to permit 
numerous entities to independently evaluate and determine whether applicants are consistent with  
undefined criteria leads to a situation where applications made in one locality may receive different 
consideration and a different result than applications made in any of the other thirty -six locations.  
Without clear criteria, guidance or other informat ion, it is therefore impossible to ensure that the 
criteria are interpreted and applied in a consistent manner.  For these reasons, the application of 
vague and undefined criteria by thirty -seven separate authorized agents as part of the administration 
of TRQ allocation renders the manner in which China administers its TRQs unreasonable.  
Fourth, with regard to the public comment process, China alleges that it relies on a previously 
undisclosed process related to the verification of public comments and opportunity for rebuttal to 
suggest that its administration is "reasonable. "  Again, there is nothing to suggest that members of 
the public understand the vague and undefined basic criteria any better than applicants.  They are 
permitted to comment on appl icants ' compliance when there is no clear indication of what compliance 
means.  Further, this entire process is curious as China suggests the only relevant factor regarding 
eligibility is passing the Credit China background check.  
Fifth, China assert s that the use of a single application process for allocating STE and non -STE 
TRQ portions "cannot create uncertainty where there is only a single type of allocation granted to 
non-STE applicants. "  Numerous aspects of China 's legal instruments indicate to  Members, 
applicants, traders, and other interested entities that a certain volume of imports are to be 
completed "through " the STE, but that any eligible applicant may receive a TRQ allocation in either 
the STE or non -STE portion.  Thus, China informs Mem bers and applicants that they may receive 
STE or non -STE allocations regardless of whether this is accurate.  For this reason, this process fails 
to be a reasonable means of TRQ administration and is a breach of GATT 1994 Article X:3(a).  
Finally, China responds that the United States has provided "no factual evidence that the 
information currently published by China prevents traders from entering into necessary 
arrangements to utilize their allocations. "  As described above, it is the stru cture and architecture of 
this measure that is at issue, and there is no requirement for evidence of actual trade impact.   
Additionally, certain aspects of China 's "in practice " administration, if accurate, do not 
demonstrate that China has not acted  inconsistently with Article X:3(a), but rather further 
demonstrate a breach of Article X:3(a).  
First, with regard to the basic criteria, which China annually announces and has cited in its 
FAQs, China asserts that in practice "NDRC does not conduct an individual assessment of each of 
the Basic Criteria. "  Instead, "NDRC generates a credit report through ‘Credit China, '" and "utilizes 
all of the information available through Credit China in evaluating each applicant. "  The use of 
divergent, unpublishe d criteria hamper Members ' and applicants ' ability to understand the 
application process and potential reasons for rejection, and thus result in unreasonable 
administration.  
 
Second, China has indicated that it provides the entire STE portion of each  TRQ to a single 
entity – COFCO.  This administrative practice is "unreasonable. "  China once again annually 
announces one practice to Members and applicants, and then in reality employs a very different 
practice for distributing TRQ allocations.  A system  where applicants are required to apply to the 
Chinese government for permission to import wheat, corn, and rice on the basis of specifications 
and applications that have no bearing on the actual decision making of the government is not rational 
or sensibl e, and results in inconsistency with Article X:3(a).  For these additional reasons, China has 
breached Article X:3(a) of the GATT 1994.  WT/DS517/R/Add.1  
 
- 28 - 
 
  
Article XIII:3(b) of the GATT 1994  
China claims that the plain meaning of the terms of Article XIII:3(b) of the GATT 1994 provides 
that "the scope of the provision is . . . limited to the total quota quantities set forth in China 's 
Schedule CLII. "  Rather, Article XIII:3(b) requires the pro vision of meaningful aggregate information 
regarding TRQs both with regard to the initial amounts permitted to be imported in a specified future 
period and any changes to that amount.  
China further points to GATT 1994 Article XIII:3(a), indicating tha t this subparagraph 
addresses those situations where a license is issued.  China 's analysis is again in error.  Article 
XIII:3(b) deals with "import restrictions involving the fixing of quotas; " thus addressing instances 
where a Member fixes a quota.  Conv ersely, Article XIII:3(a) applies to instances where "import 
licenses are issued in connection with import restrictions. "  Article XIII:3(a) thus addresses 
circumstances where import licenses are required in order to effectuate an import restriction.   
China appears to also contend that, while TRQs are subject to the provisions of Article XIII of 
the GATT 1994 as prescribed by paragraph 5, more generally TRQs are not "quantitative 
restrictions. "  This is inaccurate.  Paragraph 5 of Article XIII makes c lear that TRQs are a type of 
import restraint addressed by Article XIII and that more specifically, the reference to "fixing of 
quotas " includes TRQs.  More generally, the reference to quantitative restrictions in the title of Article 
XIII does not circums cribe the scope of Article XIII, and in any event Article XIII:5 expressly provides 
that TRQs are within the scope of Article XIII.   
Article XI:1 of the GATT 1994  
China makes three primary arguments with regard to Article XI:1.  First, China claim s that 
TRQs and all associated requirements – whether characterized as administrative or substantive – 
are outside the scope of Article XI:1 of the GATT 1994.  As part of this argument, China asserts that 
the U.S. claim should fail because other claims cou ld have been made under other articles of the 
GATT 1994 or other agreements.  Finally, China argues that the United States has not demonstrated 
a "limiting effect " on imported products.   
With regard to the first argument, China asserts that TRQs are simply outside the scope of 
Article XI:1, and that while "non-automatic import licenses generally have been found to be within 
the scope of Article XI:1, " this is not the case where licenses are for the purposes of administering 
TRQs specifically.  China f urther clarifies that in its view, not just the duty, at an in -quota or out -of-
quota level, is excluded from consideration under Article XI:1, but all "substantive conditions that a 
Member imposes upon access to the TRQ " are outside the scope of Article XI :1 of the GATT 1994.   
However, this dispute does no t challenge the "imposition by China of in -quota or out -of-quota 
duty rates or the use by China of TRQs in general, " but rather the "series of steps, or events, that 
are taken or occur in the carryin g out of China 's TRQ " including specific administrative actions and 
omissions China uses to authorize imports pursuant to those TRQs.  Nothing in the text of Article 
XI:1 suggests that association with, connection to, or proximity to "duties, taxes or othe r charges " 
is sufficient to shield other import restrictions from the obligations under Article XI:1.  Rather, Article 
XI:1 is squarely applicable to China 's TRQ administration because Article XI:1 explicitly addresses 
prohibitions or restrictions "made effective through quotas, import or export licenses or other 
measures. "  That is, restrictions on imports that are produced or operative because of quotas, im port 
or export licenses or other measures.   
China also asserts that the U.S. claim should have been brought under another article or 
agreement depending on whether the challenged aspect is considered "administrative " or 
"substantive. "  This argument is without merit.  Specifically, China attributes "a certain scepticism " 
to the analysis of import licensing procedures under GATT 1994 Article XI:1 in the Argentina – Import 
Measures  dispute, and draws from this the conclusion that "claims relating to the  administration of 
import licensing systems, including TRQ licensing systems should be brought under the [Import 
Licensing] Agreement. "  No such conclusion is supported by the Appellate Body 's discussion in 
Argentina – Import Measures .  Moreover, the Agree ment on Import Licensing Procedures  (the 
"Import Licensing Agreement ") itself states that "Members shall ensure that the administrative 
procedures used to implement import licensing regimes are in conformity with the relevant 
provisions of GATT  1994 includ ing its annexes and protocols. "  Unlike other WTO agreements, which 
have explicit conflicts clauses, the Import Licensing Agreement expressly notes that the GATT 1994 WT/DS517/R/Add.1  
 
- 29 - 
 
  applies simultaneously.  For this reason, prohibitions and restrictions on importation related to 
import licensing may appropriately be considered under Article XI:1 of the GATT 1994.  
China makes a further argument that "substantive elements of a TRQ form part of the quota 
itself and must be examined under provisions of the GATT 1994 other than Article XI:1, most notably 
Article II of the GATT 1994. "  China notes that "[s]ubstantive conditions of access define the quota 
itself. "  As noted by the United States, in some instan ces Members negotiated specific narrow TRQs; 
for instance, a Member may have a TRQ open to only certain other countries or for a narrowly 
defined product like "skimmed milk powder (for school lunch). "  These narrowly defined and 
scheduled TRQs are differen t from the obligations imposed by China through its regulatory process 
and subsequent "practice. "  Further, contrary to China 's assertion, China 's Schedule CLII contains 
no authorization or agreement to the challenged aspects of China 's TRQ administration.   Rather, the 
Headnotes indicate that China will implement TRQ regulations making clear their practices and 
methodologies, and demand that these regulations "be applied in a consistent and equitable 
manner. "  For these reasons, nothing bars a challenge to China 's measures under Article XI:1 of the 
GATT 1994.  
Finally, China misunderstands the burden of proof.  It is not necessary to demonstrate a 
limiting effect by recourse to trade flows.  Rather, a s explained by the Appellate Body, this "limitation 
need not be demonstrated by quantifying the effects of the measure at issue; rather, such limiting 
effects can be demonstrated through the design, architecture, and revealing structure of the 
measure at issue considered in its relevant context. "  Two admini strative procedures – the usage 
restrictions and associated penalties, and the administration of the TRQ for both the STE and non -
STE portion through a single process – are structured so as to have a limiting effect on imports.   
The United States has  demonstrated this restriction first by reference to China 's administration 
of the state trading and non -state trading portions of the TRQ through a single application process 
that creates significant uncertainty for TRQ applicants.  Second, China 's use re strictions on products 
imported under the TRQ, combined with penalties for non -use of the full allocation, also restricts 
imports inconsistent with Article XI:1.  
China asserts "there is no ‘uncertainty ' . . . because all non -STE applicants receive no n-STE 
allocation. "  However, at no point does China communicate this information to Members, applicants 
or other interested entities.  Instead, China 's STE and non -STE TRQs administration – as described 
in its Schedule, its 2003 Provisional Measures , and a nnual Allocation  and Reallocation Notices  – 
indicates that allocation of the STE portion is provided to end users and results in concerns and self 
limitation for applicants who anticipate potentially receiving this TRQ allocation.   
With regard to the usage restrictions and associated penalties, China again asserts that "‘in 
practice, ' an end user that finds it is unable to process all of the grains imported under its quota 
may sell those grains directly to any other entity. "  Again, however, there is no evidence that 
Members, applicants, or other interested entities are aware of China 's alleged "practice. "  To the 
contrary, China annually announces in its Allocation Notices  that for the wheat and corn TRQs, all 
product must be process ed by the TRQ holder.  Previous panels have found that measures imposing 
limitations of this kind constitute restrictions on importation under Article XI:1 of the GATT 1994.    
 China 's submissions suggest a number of additional restrictions on import s.  In particular, if 
China 's unsupported assertions are accurate, the provision of the entire STE share to COFCO, and 
the failure to require COFCO to return unused allocation for reallocation is a significant limitation on 
imports.   
 China asserts t hat contrary to the directions provided in its Schedule CLII and 2003 
Provisional Measures , which suggest that some amount of the STE portions of each TRQ will be 
allocated to end users who must import "through " an STE, China allocates the entire STE share  
directly to COFCO.  China is thus annually providing large quantities of each TRQ portion to a 
government controlled entity – COFCO.  That government controlled entity subsequently declines to 
import significant volumes of wheat, corn, and rice, and is no t required to return the allocation so 
as to make it available to other end users.  This allocation, refusal to import, and refusal to reallocate 
unused TRQ is a blatant restriction on importation.    WT/DS517/R/Add.1  
 
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The results of this practice are significant.  Spe cifically, China asserts that "the non -STE 
portion of each TRQ was fully allocated and fully utilized. "  COFCO is declining to use between 25 to 
61 percent of the overall TRQ, and because China does not require COFCO to return unused 
allocations this volum e is unavailable to non -STE users who would likely be willing and able to import 
some or all of this amount.   
The ability of China to limit imports at the in -quota duty rate, by allocating 50 to 90 percent 
of each TRQ to COFCO is an additional signif icant restriction on the importation of wheat, corn, and 
rice into the Chinese market, and is further inconsistent with China 's obligation under Article XI:1 of 
the GATT 1994.  
EXECUTIVE SUMMARY OF THE U.S.  ORAL STATEMENTS AT THE SECOND MEETING  
China is incorrect in arguing that a "holistic approach " means that consistency with one or 
more requirements of Paragraph 116 would excuse an inconsistency with another requirement of 
Paragraph 116.  China did not undertake an obligation to administer som e parts of its process at a 
WTO plus level and others at a WTO minus level, such that general TRQ administration averages out 
to Paragraph 116.  China 's so-called "holistic " approach should be rejected.   
With regard to Article XIII:3(b) of the GATT 1 994, the United States notes that while China 
purports to agree that Article XIII:3(b) is a "forward -looking " and "ongoing " obligation, it continues 
to contend that the text has no practical meaning after a Member has included TRQ amounts  in its 
schedule, unless the Member offers larger TRQs than required under its schedule.   
China continues to broadly argue that TRQs generally are not subject to Article XI:1 because 
they are not "quantitative restrictions, " but rather "duties " and thus outside the sc ope of Article 
XI:1.  However, t he United States  has no t challenged the imposition by China of in -quota or out -of-
quota duty rates or the use by China of TRQs in general, but rather the "series of steps, or events, 
that are taken or occur in the carrying o ut of China 's TRQ, " including specific administrative 
requirements and processes pursuant to those TRQs.  It is these administrative aspects that 
constitute restrictions on importation, not the connection to lower or higher duty rates.   
Further, nothing in the text of Article XI:1 suggests that association with, connection to, or 
proximity to "duties, taxes or other charges " is sufficient to shield other import prohibitions or 
restrictions from liability under Article XI:1.  China continues to suggest that processing 
requirements and associated penalties are not subject to Article XI:1 because they are "substantive 
conditions " for accessing the TRQ and thus part of the TRQ itself.  China is in error.  
GATT 1994, Article X:3(a) specifically addresses the manner of "administration " of "laws, 
regulations, decisions and rulings, " and thus expressly does not address substantiv e concerns 
related to those laws, regulations, decisions, and rulings.  By contrast, the applicability of Article 
XI:1 turns on whether the challenged measure is a prohibition or restriction on importation other 
than a duty, tax, or other charge.   
A measure is not exempt from Article XI:1 because a Member has imposed the prohibition or 
restriction in addition to a duty, tax, or other charge.  To that end, the United States reiterates that 
it is not challenging the in -quota or out -of-quota duty rates o r the application of those rates to 
particular products.  The United States is challenging the importation restrictions in China 's measures 
that are in addition to the in -quota duty rates.  
  China goes on to conflate the negotiated terms of a Member 's TRQ contained in its schedule 
– such as maintaining a TRQ on a country specific basis or limiting it to a particular end -use – with 
"substantive conditions " that China suggests can be put in place at the Member 's discretion and are 
not subject to review under Article XI:1.  China 's Schedule CLII includes a description of the products 
as "corn," "wheat, " etc., the relevant tariff item numbers, the in -quota duties and TRQ quantity 
amounts, and other terms and conditions, such as implementation stages for TR Q quantities.  China 
negotiated TRQs applicable to grains for any use, so long as they fit under the cited tariff item 
numbers.  China has not negotiated TRQs like those in Canada 's or Japan 's Schedules of Concessions 
that identify products through certain  end uses, such as skim milk powder for school lunches.   WT/DS517/R/Add.1  
 
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The Schedule does not, as China suggests, "provide for the imposition of  . . . end -use 
requirements, through taking account of capacity to produce processed grain. "  China also suggests 
that a n exercise of judicial economy would be appropriate, and the Panel should only make certain 
findings under Paragraph 116 and Article XIII:3(b).   
Article 7.1 of the Understanding on Rules and Procedures Governing the Settlement of 
Disputes  ("DSU") establishes the standard terms of reference when the Dispute Settlement Body 
("DSB") charges a panel with examining a matter the complaining party has referred to the DSB.  
DSU Article 11 sets out the "function " of panels, and tracks the standard terms of reference.  In 
pertinent part, these provisions establish that the DSB tasks a panel with "examining " a matter and 
then making "such other findings as will assist the DSB in making the recommendation " set out in 
DSU Article 19.1 (that is, a recommendation that the Member bring the measure into conformity 
with that agreement).  A panel should "address those claims on which a finding is necessary in order 
to enable the DSB to make sufficiently precise recommendations and rulings so as to allow for prompt 
comp liance by a Member with those recommendations and rulings. " 
Because compliance will not simply be a matter of China eliminating or removing its TRQ 
administration measures, but rather reforming its TRQ administration measures so as to comply with 
China's specific WTO obligations, it is important to make findings on each of these obligations so as 
to properly guide implementation.  Without sufficient findings to inform implementation, it is likely 
that the dispute will not be resolved.  
China argue d in its Second Written Submission for specific applications of judicial economy, 
first with respect to Paragraph 116 and Article X:3(a) of the GATT 1994 and, second, with respect 
to Paragraph 116 and Article XIII:3(b) of the GATT 1994.  
China "agrees with the United States that the scope and content of Paragraph 116 and Article 
X:3(a) are not the same. "  China contends that if the Panel were to consider both Paragraph 116 
and Article X:3(a) it would "inevitably reach the same conclusion " under both pro visions.   
As described at length in this dispute, China maintains a complex and opaque TRQ 
administration that is difficult to understand and participate in and results in underutilization of 
China 's TRQs.  Unlike a dispute where the inconsistent mea sure will likely be withdrawn, China will 
continue to maintain TRQ administration measures for allocating licenses and permitting importation 
at in-quota duty levels.  It will be critical for China to consider whether the measures taken to comply 
are: tran sparent, predictable, fair, clearly specified, and unlikely to inhibit the fill of the TRQ, as well 
as reasonable.  For this reason, sufficiently precise findings with regard to Paragraph 116 and Article 
X:3(a) would be helpful to inform the actions China must take to come into compliance with its WTO 
obligations.  
China continues to argue that whatever the Panel determines Article XIII:3(b) requires should 
be sufficient to satisfy the transparency requirement under Paragraph 116 of the Working Party 
Report.  The United States disagrees.  Article XIII:3(b) requires public notice of the amounts 
permitted to be imported and changes to those amounts.   
Paragraph 116 requires China to administer its TRQs, including with respect to allocation and 
realloc ation, through a process or set of rules or principles that is easily understood, discerned, or 
obvious.  As part of this obligation, China should be providing information to Members and applicants 
regarding how the rules function, how they are applied, an d the results of applying those rules in a 
timely manner.  This will include and go beyond the specific information required to be made public 
by Article XIII:3(b) of the GATT 1994.  For this reason, findings under both Article XIII:3(b) and 
Paragraph 116 of the Working Party Report would be important to help resolve the dispute.    
EXECUTIVE SUMMARY OF THE U.S.  RESPONSES TO THE PANEL'S SECOND SET OF QUESTIONS  
[Summaries of the U.S. responses to the Panel 's questions are reflected in the Executive 
Summ ary of the U.S. First and Second Written Submissions.]   WT/DS517/R/Add.1  
 
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  ANNEX B -2 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGU MENTS OF CHINA  
I. INTRODUCTION  
1. In the present dispute, the United States challenges the consistency of China's administration 
of its tariff rate quotas ("TRQs") for wheat, long -grain rice, short - and medium -grain rice, and corn 
with certain of its obligations under the GATT 1994 and Par agraph  116 of the Working Party Report 
to China's Protocol of Accession . Specifically, the United States challenges six specific aspects of 
China's system of TRQ administration: the basic criteria for determining eligibility for TRQ allocations 
and realloc ations ("Basic Criteria"); the principles for determining TRQ allocations ("Allocation 
Principles"); the information published concerning allocation and reallocation of the TRQs; the 
administration of the portions of the TRQs reserved for state trading ent erprises ("STEs") and non -
state trading enterprises ("non -STEs"); the public comment process; and the end -use requirements 
and penalties for non -use.1 
2. For the reasons set out in China's written submissions, oral statements, responses to questions 
from t he Panel and the United States, and comments on the United States' responses to questions 
from the Panel, China submits that the U.S. claims under Paragraph  116 of the Working Party Report 
to China's Protocol of Accession and Articles  X:3(a), XIII:3(b), an d XI:1 of the GATT 1994 are 
unfounded and unsupported.  
II. SUMMARY OF CHINA 'S SYSTEM OF TRQ ADM INISTRATION  
3. China's National Development and Reform Commission ("NDRC") is the authority responsible 
for allocating and reallocating the grains TRQs . Within N DRC, the Department of Economy and Trade 
is charged with overseeing the administration of the TRQs . Thirty -seven provincial and municipal 
departments are authorized to process TRQ applications.2 
4. The grains TRQs are divided into STE and non -STE quotas.3  NDRC issues an annual Allocation 
Notice , which provides the TRQ amounts for each grain, including the STE portion for each TRQ; the 
Basic Criteria for TRQ allocation eligibility; and the Allocation Principles that NDRC applies to 
determine the allocations  that will be granted to eligible applicants.4  
5.  In relation to the non -STE portions of the grains TRQs, applicants must satisfy the Basic 
Criteria and commodity -specific requirements provided in the 2016 and  2017 Allocation Notices  in 
order to be eligi ble for a TRQ allocation . Both processing and general trade applicants apply for TRQs 
between October 15 and October 30 of each year, and submit their application forms to a local 
authorized agency.5   
6. When an authorized agency receives an application form, it will confirm that all of the 
information requested by the form has been provided and that the applicant has signed the form.6  
The authorized agencies are available to answer questions that applica nts have in relation to the 
application form and the application process . The agencies answer these questions on the basis of 
the TRQ Guideline of the Examination and Approval of Grain Import TRQ  ("TRQ Guidelines") and the 
Guidance on the Examination and A pproval of Grain Import TRQs: Frequently Asked Questions and 
                                                
1 See China's first written submission, para.  22. 
2 See Public Notice on Authorized Agencies for Agricultural Product Import Tariff -Rate Quotas  (Ministry 
of Commerce and National Development and Reform Commission, Public Notice No. 54, issued 15  October 
2003) ("2003 List of NDRC Authorized Agencies ") (CHN -6). 
3 Provisional Measures on the Administration of Import Tariff -Rate Quotas for Agricultural Products 
(Ministry of Commerce and National Development and Reform Commission 2003 Order No.  4, issued 
27 September 2003) (" 2003 Provisional Measures "), Article  4 (CHN -5). 
4 See 2017 Allocation Notice  (CHN-7). 
5 See 2003 Provisional Measures , Articles 10 and 11 (CHN -5). 
6 If an authorized agency determines that an application form is incomplete, the form is  returned to the 
applicant with instructions on how to properly complete the form . See 2003 Provisional Measures , Article  8 
(CHN -5). WT/DS517/R/Add.1  
 
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  Answers  ("TRQ FAQs") that NDRC publishes on its official website.7  If a question is not covered by 
the guidelines or the TRQ FAQs, the authorized agency forwards the question to NDRC, and NDRC 
tells the authorized agency how to respond.8  Questions may also be posed directly to NDRC through 
NDRC's official website.9  Responses to questions submitted in writing are provided within ten 
working days, pursuant to Article  34 of the 2003 Provisional Me asures .10  
7. The authorized agencies do not conduct a substantive assessment of the applications . After 
determining that the applications are complete and properly signed, the local authorized agency 
delivers the applications to NDRC.11 
8. NDRC then revie ws the applications to determine whether the applicants meet the Basic 
Criteria .12  The uniform social credit code that is provided by each applicant in its application is used 
to generate a credit report through "Credit China" (https://www.creditchina.gov .cn).13  The 
information that is used in generating a credit report includes the general registration information 
of the enterprise; the administrative licenses acquired by the enterprise; the administrative 
punishments received by the enterprise; and whet her the enterprise is on the Good Credit List, 
Watch List, or Black List . Only the Black List is considered by NDRC . The components of the credit 
report are illustrated in Exhibit  CHN-19.14  Applicants with records of non -compliance (i.e. applicants 
who ha ve been "blacklisted") are rejected . Applicants who inquire concerning the reasons for a 
rejected application will be provided with a response by NDRC or  the relevant authorized agency 
within ten working days.15 
9. Concurrent with the eligibility review, N DRC publishes the list of applicants by issuing the 
Announcement of Applicant Enterprise Data for Import Tariff -Rate Quotas for Grains . This notice also 
provides the opportunity for the public to submit comments to NDRC regarding each applicant.16  
NDRC re lies on public comments to double check that applicants are eligible to receive TRQ 
allocations.17  If NDRC receives a comment regarding a particular applicant, NDRC asks the 
responsible authorized agency to collect information in relation to the comment s o that NDRC can 
verify its accuracy . The authorized agency also informs the applicant that a comment has been 
submitted in relation to its application, and the applicant is given an opportunity to provide a 
response . If NDRC concludes pursuant to the comment and the information collected by the 
authorized agency that the applicant has not fully met the Basic Criteria or that it has submitted 
falsified information in its application, then the application is rejected . If NDRC concludes otherwise, 
then th e applicant remains on the list.18   
10. Following the eligibility review, NDRC allocates the non -STE quota for each grains TRQ among 
the eligible applicants based on the Allocation Principles provided in Article  4 of the 2016 and 2017 
                                                
7 See Guideline on the Examination and Approval of Grain Import TRQs (National Development and 
Reform Commission, published  27 May 2017) ("TRQ Guidelines") (CHN -15) and Guidance on the Examination 
and Approval of Grain Import TRQs: Frequently Asked Questions and Answers (National Development and 
Reform Commission, published 27 May 2017) ("TRQ FAQs") (CHN -14). 
8 See 2003 Provis ional Measures , Article  8 (CHN -5). 
9 TRQ applicants can access the NDRC's Online Inquiry Page, available at: 
http://services.ndrc.gov.cn:8080/ecdomain/portal/portlets/bjweb/newpage/itemlist/itemlist.jsp?admintype=&t
hemetype=&keyword=010092.  
10 Article  34 of the 2003 Provisional Measures  provides that "[i]nquiries relating to the allocation and 
reallocation of agricultural product import tariff -rate quota[s] shall be posed in writing to the Ministry of 
Commerce, NDRC or their respective authorized agencies . The Ministry of Commerce, NDRC or their authorized 
agencies shall reply to such inquiries within 10 working days."  
11 See China's response to Panel question No. 3(c), paras. 9 and 10 . At this stage, if an application is 
found to be incomplete, NDRC will no tify the responsible authorized agency, and the authorized agency will 
require the applicant to resubmit a complete application prior to NDRC's publication of the Announcement of 
Enterprise Data . 
12 2017 Allocation Notice , Article  2 (CHN -7). 
13 These credi t reports are publicly searchable using an entity's name or social credit code.  
14 See China's responses to Panel questions No. 8(c), para. 24 and No. 47, para.  8. 
15 See 2003 Provisional Measures , Article  34 (CHN -5). 
16 See Announcement of Applicant Enterprise Data for Import Tariff -Rate Quotas for Grains in 2017 
(National Development and Reform Commission, issued 1 December 2016) ("2017  Announcement of Enterprise 
Data") (CHN -8). 
17 See China's response to Panel question No. 55(a), paras.  22 and 23.  
18 See China's first written submission, para.  15. WT/DS517/R/Add.1  
 
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  Allocation Notices .19  With respect to the allocation of the non -STE quota, a general trade TRQ 
applicant's historic import performance is the most important factor in determining the amount of 
the allocation . For a processing trade applicant, the applicant's production and p rocessing capacities 
are key factors in addition to its historic performance in determining the amount of the allocation . 
New applications are considered in the event that the entire non -STE portion of the TRQ has not 
been fully allocated to applicants wit h historic import performance under the TRQs.20 
11. When NDRC has completed its substantive review of each application, the authorized agencies 
inform each applicant of the results of its application . The annual import tariff rate quotas for 
agricultural p roducts are implemented from January 1 of each year . In 2016 and 2017, the non -STE 
portion of each TRQ was fully allocated and fully utilized, with the one exception of short - and 
medium -grain rice in 2016, for the technical reason explained by China in it s responses to Panel 
questions.21 
12. In relation to the STE portions of the TRQs, China National Cereals, Oils and Foodstuffs Import 
and Export Corporation ("COFCO") is the only enterprise designated as a state trading enterprise for 
grains.22  COFCO is t herefore allocated the full STE portion of each TRQ.23  This amounts to between 
50 percent and 90  percent of each grains TRQ, depending on the grain, in accordance with China's 
Schedule CLII.24  COFCO cannot apply for an allocation from the non -STE portion  of the TRQ . No 
STE other than COFCO has ever received an STE portion of a TRQ allocation because COFCO is the 
sole authorized STE importer for grains.25 
13. In practice, because the STE portions of the TRQs are allocated entirely to COFCO, any other 
TRQ a llocation to an end -user is non -state trading only . If an end -user is unable to sign or complete 
import contracts for the entire TRQ allocation on their certificate by the end of the year, the end -
user must return the unused quantity before September 15.26  COFCO is not required to return any 
unused portion of its grains TRQs for reallocation, nor is it subject to penalties for less than full 
utilization . Only end -users are subject to the obligation to return unused amounts for reallocation 
and penalties fo r non-use.27  All entities are subject to usage requirements.28 
14. End-users who have imported their TRQ allocation by the end of August, as well as new users 
that conform to the Basic Criteria, may apply for any returned allocation amounts, from Septembe r 
1 to September  15.29  The procedures for reallocations follow the procedures for initial allocations in 
relation to the completeness check by the authorized agencies and the eligibility review by NDRC . 
Reallocations are granted based on the "first -come, first-serve d" methodology specified in Article  26 
of the 2003 Provisional Measures . The unused amounts of the non -STE portions of the TRQs are in 
fact returned and reallocated.30 
                                                
19 2017 Allocation Notice , Article  4 (CHN -7); 2016 Allocation Notice , Article 4 (CHN -10); see also 2003 
Provisional Measures , Article  13 (CHN -5). 
20 See China's first written submission, paras. 16  and 17; China's response to Panel question No.  51, 
para. 13. 
21 See China's response to Panel question 10, para. 35 and fn 41.  
22 See Catalogue of Import State Trading Enterprises (Ministry of Foreign Trade and Economic 
Cooperation 2001 Announcement No. 2 8, issued 2001) (CHN -13).  
23 See China's responses to Panel questions, Table  1. 
24 See Schedule CLII – People's Republic of China, Part I – Most-Favoured -Nation Tariff: Section I -B – 
Tariff Quotas (WT/ACC/CHN/49/Add.1) (CHN49A1 -02) ("China's Schedule CLII").  
25 See China's response to Panel question No. 6(e), para. 19.  
26 2003 Provisional Measures , Article  23 (CHN -5). 
27 See China's response to Panel question No. 6(e), para. 20.  
28 See China's response to Panel question No. 6, para. 20 . China notes that certain Panel questions refer 
to the usage requirements alternatively as "end -use requirements" or "processing requirements" . China 
explained the difference between processing requirements applicable only to entities engaged in processing 
trade and the end -use processing requirement applicable to all general trade recipients of wheat and corn in its 
response to Panel question No. 58(b) . It is the end -use processing requirement applicable to all general trade 
recipients that is challenged by the U nited States.  
29 2003 Provisional Measures , Articles 24, 25 (CHN -5); Public Notice on the Reallocation of Import Tariff -
Rate Quotas for Agricultural Products in 2017  (National Development and Reform Commission 2017 Public 
Notice No. 11, issued 11 August) ( "2017 Reallocation Notice ") para. 1 (CHN -9). 
30 See China's second written submission, Table  1. WT/DS517/R/Add.1  
 
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  III. THE PANEL SHOUL D EXERCISE JUDICIAL ECONOMY REGARDING CE RTAIN OF T HE 
U.S. CLAIMS UNDER AR TICLE  X:3(A) OF THE GATT  1994 AND PARAGR APH 116 OF 
THE WORKING PARTY REPORT  
A. Examining the United States' Claims Under Paragraph  116 of the Working 
Party Report  and Article  X:3(a) of the GATT 1994 Is Unnecessary to Resolve 
this Dis pute 
15. The United States is pursuing claims under both Paragraph  116 and Article  X:3(a) of the GATT 
1994 with respect to the Basic Criteria; Allocation Principles; information published concerning 
allocations and reallocations of the TRQs; administration  of the STE and non -STE portions of the 
TRQs in conjunction with penalties for non -use; and the public comment process.  
16. It is undisputed that it is within the bounds of a panel's discretion "to determine only those 
claims on which a finding is necessar y 'for the DSB to make sufficiently precise recommendations 
and rulings so as to allow for prompt compliance by a Member with those recommendations and 
rulings'" and thereby "'ensure effective resolution of disputes to the benefit of all Members'".31  In 
China's view, the exercise of judicial economy with respect to the U.S. claims under Article  X:3(a) 
of the GATT 1994 that it has also brought under Paragraph  116, and the United States' claims under 
Paragraph  116 that it has also brought under Article  XIII:3(b) of the GATT 1994, would be the most 
efficient and effective means to resolve this dispute.32   
17. China acknowledges that there are circumstances in which the exercise of judicial economy 
by a panel may not be appropriate, such as where different rem edies are available under different 
applicable provisions .  No such circumstances exist here . The United States has not argued that the 
exercise of judicial economy will preclude the possibility of it obtaining a remedy under another 
provision . Rather, it asserts only that its claims implicate "distinct" legal obligations, and that "the 
scope and content" of those obligations "are not the same."33   
18. China agrees with the United States that the scope and content of Paragraph  116 and 
Article  X:3(a) are not the same.34  While Paragraph  116 addresses TRQ administration specifically, 
the scope of Article  X:3(a) applies to administration generally and is therefore broader . The content 
of the provisions also differs because of the TRQ -specific outcomes set out in the latter half of the 
first sentence of Paragraph  116 (provision of effective import opportunities, etc.) . The provisions 
nonetheless overlap to a significant degree because of the series of requirements set forth in the 
first part  of the first sentence of Paragraph  116 (administration on a transparent, predictable, etc. 
basis) . These requirements combine to encompass the specific obligation contained in Article  X:3(a) 
underlying the United States' claim – the obligation to administ er measures of the kind described 
in Article  X:1 in a reasonable manner.35  To require China to administer its TRQs on a transparent, 
predictable, uniform, fair and non -discriminatory basis, using clearly specified timeframes, 
administrative procedures and  requirements, is therefore to require China to administer its TRQs 
in the "reasonable" manner mandated by Article  X:3(a).  
19. Thus, China disagrees with the United States that the differences between the scope and 
content of these provisions require exami ning the U.S. claims under both provisions, or that such 
differences require the Panel to decline to exercise judicial economy.36  On the contrary, these 
differences militate in favour of foregoing analysis of the U.S. claims under Article  X:3(a).  
                                                
31 See China's response to Panel question No. 22, para. 61, quoting Appellate Body Report, Australia – 
Salmon , para. 223 . See also Appellate Body Report, India – Patents (US) , para. 87 ("… a panel has the 
discretion to determine the claims it must address in order to resolve the dispute between the parties — 
provided that those claims are within that panel's terms of reference.").  
32 See also European Union's thi rd-party submission, paras.  12-14. 
33 See China's second written submission, para. 7, quoting United States' response to Panel question 
No. 21(a), para. 65 and No. 21(b), para.  68. 
34 See United States' response to Panel question No. 21, para. 65.  
35 See United States' first written submission, para. 228.  
36 See Appellate Body Report,  Argentina – Import Measures , para. 5.194 . The Appellate Body explained 
that: WT/DS517/R/Add.1  
 
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  B. Examining the United States' Claims Under Article  XIII:3(b) of the GATT 
1994 and Paragraph 116 of the Working Party Report  Is Unnecessary to 
Resolve this Dispute  
20. The United States is also pursuing claims under Paragraph 116 and Articles XIII:3(b) and 
X:3(a) of the GATT 1994 relating to the publication of allocation and reallocation information . The 
United States clarified in its responses to questions from the Panel that the information it claims is 
required under Paragraph 116 and Article XIII:3(b) inc ludes the total amounts actually allocated, 
returned and reallocated . China has already explained why it does not consider it necessary for the 
Panel to examine the United States' claim under Article  X:3(a) relating to this information . In China's 
view, it  is similarly unnecessary for the Panel to examine the United States' claim under 
Paragraph  116, for the following reasons .  
21. China explained in its first written submission that Article  XIII:3(b) requires publication of the 
total amounts that will be p ermitted to be imported during the specified future period and any 
changes to those amounts during that specified period.37  This requirement does not extend to 
publishing amounts actually allocated, either in the aggregate or individually . Article  XIII:3( b) thus 
expressly provides specific public notice requirements with respect to the administration of TRQs, 
including total amounts .  
22. In contrast, Paragraph  116 makes no reference to public notification of TRQ amounts . The 
United States is trying to rea d such a requirement into Paragraph  116 through the more general 
requirement to administer TRQs on a transparent and predictable basis . China does not believe that 
the Panel could reasonably conclude that the precise public notice requirements in Article  XIII:3(b) 
do not require publication of the amounts actually allocated, returned for reallocation, and 
reallocated, but find that such amounts must be published under Paragraph  116. Accordingly, China 
submits that the Panel's analysis with respect to public ation of amounts actually allocated, returned, 
and reallocated should begin and end with Article  XIII:3(b), as this will efficiently resolve the 
question of whether China is obligated to publish this information.  
IV. THE UNITED STATE S HAS FAILED TO ESTA BLISH THAT CHINA'S SYST EM OF TRQ 
ADMINISTRATION IS IN CONSISTENT WITH ITS WTO OBLIGATIONS  
A. Basic Criteria  
The Basic Criteria Do Not Render China's System of TRQ Administration as 
a Whole Inconsistent with Paragraph  116 of the Working Party Report  
23. The articulat ion of the Basic Criteria constitutes a particular aspect of China's administration 
of the TRQs . Paragraph  116 however relates to the administration  of the TRQs as a whole . 
Consequently, while China acknowledges that the description of the Basic Criteria n eeds to be 
updated to better reflect the nature of NDRC's assessment,38 this does not mean that China's system 
of TRQ administration is inconsistent with Paragraph  116.39 
24. As the United States acknowledged in its first written submission, "China's admin istration of 
its TRQs relates to all aspects of its execution, or carrying out, of those TRQs".40  Accordingly, even 
if the Panel were to conclude that any of the specific aspects challenged by the United States are 
inconsistent with the obligations in Par agraph  116, the Panel would have to then evaluate whether 
the inconsistency of those specific aspects with Paragraph  116 is a sufficient basis upon which to 
conclude that the administration of the TRQs as a whole is inconsistent with Paragraph  116. 
25. In referring to its TRQ administration "as a whole", China is referring to its system of TRQ 
administration in its entirety . China's system of TRQ administration includes, inter alia, the six 
                                                
In our view, the fact that two provisions have a different "scope and content" does not, in a nd of itself, 
imply that a panel must address each and every claim under those provisions . Indeed, if this were so, 
then only in the rarest of circumstances would a panel be able to exercise judicial economy on a claim.  
Ibid. 
37 See China's first written s ubmission, paras. 85 -87. 
38 See China's oral statement to the Panel at the first meeting, para. 14.  
39 See China's response to Panel question No.  26, para. 73.  
40 See United States' first written submission, para. 67.  WT/DS517/R/Add.1  
 
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  specific aspects challenged by the United States – the Basic Criter ia; Allocation Principles; public 
comment process; public notice requirements; usage requirements and penalties; and 
administration of the STE and non -STE portions of the TRQs . China's system of TRQ administration 
also includes aspects not challenged by th e United States, such as the application forms for TRQ 
allocations and reallocations utilized by NDRC; the applicant categories and application periods 
specified by NDRC in the annual Allocation Notice; the public inquiry process; the TRQ FAQs and 
TRQ Guid elines issued by NDRC; NDRC's reliance on the first -come, first -served method at the 
reallocation stage; the process by which NDRC and the local authorized agencies inform recipients 
that they have received allocations and reallocations; and the designatio n of COFCO as the sole STE 
authorized to import grains.41 
26. Under a holistic analysis, no single administrative measure or practice is determinative of 
whether China's administration is consistent with Paragraph  116. To illustrate, access to information 
relating to allocation and reallocation is facilitated through the right of any entity (applicant or non -
applicant) to submit any inquiry relating to the grains TRQs to local authorized agencies and NDRC . 
The inquiry feature interacts with all of the other  features of China's TRQ system, including the Basic 
Criteria, to further the administration of the TRQs on a transparent, predictable, and fair basis, using 
clearly specified procedures and requirements that do not inhibit the filling of each TRQ . Any ent ity 
could submit an inquiry to NDRC requesting further details as to the operation of the public comment 
procedure . The question of the consistency or inconsistency of China's administration with 
Paragraph  116 thus is not decided by any one aspect.42 
27. The contents of Paragraph  116 affirm that a holistic analysis is appropriate . None of the 
requirements set forth in Paragraph  116 pertain to specific aspects of TRQ administration, such as 
when and how to provide public notice of permitted imports or the me chanisms to use in determining 
allocation and reallocation amounts and recipients . Rather, they pertain to the administration of the 
TRQs regime as a whole . China also considers that the Agreement on Import Licensing Procedures 
("ILP Agreement") suggests s uch a holistic approach is appropriate when evaluating China's 
administration of the TRQs.43  Article  3.2 of the ILP Agreement requires non -automatic licensing 
procedures to be "no more administratively burdensome than absolutely necessary to administer 
the measure" . China notes that the Members had this standard in mind with respect to China's TRQ 
administration.44  It is well -established that evaluating the necessity of a measure entails a holistic 
analysis that involves weighing and balancing a series fa ctors not limited to the measure itself.45  
China considers that the holistic evaluation of the administration of non -automatic licensing 
procedures under the ILP Agreement indicates that a similar evaluation should be undertaken with 
respect to the admini stration of TRQ licensing procedures under Paragraph  116. 
28. China thus requests that the Panel reach a conclusion on the consistency of China's 
administration with Paragraph  116 that rests on China's system of TRQ administration as a whole.  
The United States Has Not Demonstrated that the Basic Criteria Are 
Inconsistent with Article  X:3(a) of the GATT 1994  
29. The United States argues that the inclusion of "vague" or "undefined" Basic Criteria is 
inconsistent with China's obligation to administer its TRQs in a "reasonable manner" under 
Article  X:3(a) of the GATT 1994 . For the reasons China has explained, the Panel should exercise 
judicial economy with respec t to the United States' claim relating to the Basic Criteria under 
Article  X:3(a) . Even if the Panel proceeds to examine the U.S. claim, the Panel should reject it 
because the United States has not demonstrated that the alleged vagueness in the Basic Crite ria 
                                                
41 See China's response to Panel quest ion No. 60(b), para. 41.  
42 See China's second written submission, para. 59.  
43 See China's second written submission, para. 60.  
44 See Working Party Report , para. 112 ("…members asked that China ensure that its TRQ 
arrangements be no more administratively  burdensome than absolutely necessary…").  
45 See, e.g. Appellate Body Report, EC – Seal Products , para. 5.169, referring to Appellate Body 
Reports, Korea – Various Measures on Beef , para. 164, US – Gambling , para. 306, and Brazil – Retreaded 
Tyres , para. 1 82. WT/DS517/R/Add.1  
 
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  necessarily leads  to an unreasonable administration of the grains TRQs ,46 and because the United 
States has failed to "support its claim with solid evidence".47   
30. In evaluating whether the United States has in fact demonstrated that the Basic Criteria 
necessarily lead to the unreasonable administration of the grains TRQs, the specific factual 
circumstances in which the Basic Criteria are applied must be examined in light of their objective.48  
There is no evidence that similarly situated applic ants are being treated differently in NDRC's 
evaluation, or that the requirements have in fact caused prejudice to the United States or other 
Members.49  China acknowledges that a showing of trade effects is not required to establish 
inconsistency with Art icle X:3(a) . China recalls however, that "Article  X:3(a) requires an examination 
of the real effect  that a measure might have on traders operating in the commercial world " and that 
this "can involve and examination of whether there is a "possible impact  on the competitive situation 
due to…unreasonableness in the application" of the measure.50  
31. When the "real effect" of the Basic Criteria is examined, it is evident that China's 
administration of the Basic Criteria is consistent with Article  X:3(a) . The " real effect" is that all 
applicants are subject to the same pro forma  screening before their applications are forwarded to 
NDRC for substantive review . There is no evidence that grains traders operating in China are being 
negatively impacted by an unreason able application of the Basic Criteria . Furthermore, the "possible 
impacts'' alleged by the United States are based on a misunderstanding of the function of the Basic 
Criteria in the TRQ administration process.  
32. The United States emphasizes that the Ba sic Criteria are "insufficiently specified to permit 
applicants to properly understand and subsequently meet the criteria."51  However, the Basic Criteria 
are met as soon as an applicant signs the application , passes the standard background check , and 
is confirmed not to have violated the 2003 Provisional Measures .52  What an applicant must properly 
understand are the requirements to provide certain operational data and to sign the application form 
– requirements which are clearly specified in the form itse lf. The descriptions of each of the Basic 
Criteria have no bearing on this aspect of the application process . The United States also theorizes 
that the Basic Criteria "prevent applicants from correcting or improving their applications in the 
future."53  As China explained in its first written submission, any applicant whose form is rejected 
by a local agency is informed as to the reason for the rejection and provided an opportunity to 
complete and resubmit the form.54  The application of the Basic Criteria therefore cannot "have 
caused, [n]or are likely to cause", this outcome.55  
                                                
46 See Appellate Body Report, EC – Selected Customs Matters , para. 201.  
47 See Panel Report, Thailand – Cigarettes , para. 7.874, quoting Appellate Body Report, US – Oil 
Country Tubular Goods Sunset Reviews, para. 217 . The Appellate Body stated:  
We observe, first, that allegations that the conduct of a WTO Member is biased or unreasonable are 
serious under any circumstances . Such allegations should not be brought lightly, or in a subsidiary fashion . A 
claim under Article  X:3(a) of the GATT 1994 must be supported by solid evidence; the nature and the scope of 
the claim, and the evidence adduced by the complainant in support of it, should reflect the gravity of the 
accusations inherent in claims under Article  X:3(a) of the GATT 1994.  
Ibid. 
48 See Panel Report, US – COOL , para. 7.851 (finding that "whether an act of administration can be 
considered reasonable within the context of Article  X:3(a) entails a consideration of factual circumstances 
specific to each case" and "an examination of the f eatures of the administrative act at issue in light of its 
objective, cause or the rationale behind it") . See also Panel Report, Thailand – Cigarettes , para. 7.921 . The 
Panel found that the Appellate Body's "clarification of the principles underlying the c hapeau of Article  XX 
provide guidance on the analysis of the reasonableness requirement under Article  X:3(a)" and noted that "for 
example…the rationale that can explain [the measure at issue] is also relevant to evaluating the question of 
whether it is an administrative process that leads to unreasonable administration".  
49 See Panel Report, Thailand – Cigarettes , para. 7.969 (finding a violation of Article  X:3(a) where 
proven delays under Thailand's customs review process tended "to show prejudice caused t o other Member 
governments and traders").  
50 See Panel Report, Argentina – Hides and Leather , para. 11.77 (emphasis added).  
51 See United States' first written submission, para. 233.  
52 See China's first written submission, para. 35.  
53 See United States' first written submission, para. 238.  
54 See China's first written submission, para.  38. 
55 See Panel Report, China – Raw Materials , para. 7.705, quoting Appellate Body Report, EC – Selected 
Customs Matters , para. 225 . The Appellate Body stated:  WT/DS517/R/Add.1  
 
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  33. In relation to the U.S. argument that authorized agencies may be providing divergent 
interpretations of the Basic Criteria, the United States misunderstands the role that autho rized 
agencies play in the administration of China's TRQs . Authorized agencies do not conduct substantive 
reviews of applications . The role of authorized agencies is explained in Articles  8, 11 and 12 of the 
Provisional Measures . The role of the authorized  agencies pursuant to these provisions is simply to 
check the applications for completeness and forward applications to NDRC for review . The authorized 
agencies do not interpret the Basic Criteria, and if they receive a question that is not answered by 
the TRQ FAQs or TRQ Guidelines, they forward such questions to NDRC . Accordingly, there is no 
opportunity for "divergent interpretations" or "inequitable application" of the eligibility criteria.56 
34. The reasonableness of the Basic Criteria must also be evaluated in light of their objective, 
which is to ensure that all TRQ applicants are accountable for the information they submit and are 
acting in accordance with the law, so as to ensure that the administration of each TRQ is "uniform, 
fair, just, predic table and non -discriminatory".57  This objective is both reasonable and reconcilable 
with China's administration of the Basic Criteria.58  When considered in conjunction with the fact that 
the Basic Criteria are applied uniformly and impartially, and that only NDRC is authorized to conduct 
a substantive review of each application, it is evident that China's measures are consistent with its 
obligations under Article  X:3(a).59 
35. Finally, the reasonableness of the Basic Criteria must be evaluated with due regard to China's 
right, and the right of all Members, to deploy the manner of administration that each considers "most 
appropriate in the particular circumstances in which it is situated".60  China developed a preliminary 
screening step in order to effici ently ensure that the hundreds of applicants for TRQ allocations 
reviewed by NDRC are complete . China reasonably assessed that it would not be an efficient use of 
NDRC's limited resources to both confirm completeness and conduct substantive reviews of each  
application.61  
36. For these reasons, the United States has failed to demonstrate that the inclusion of the Basic 
Criteria necessarily leads to an unreasonable administration of the grains TRQs, and the U.S. claim 
under Article  X:3(a) must fail.  
                                                
[W]e may co nceive of cases where a panel might attach much weight to differences that exist at the 
level of the administrative processes, because it considers these differences to be so significant that they have 
caused, or are likely to cause, the non - uniform appli cation of the legal instrument at issue.  
Ibid. 
56 See United States' first written submission, para. 230 .  See also China's second written submission, 
paras. 21 -27. 
57 See 2003 Provisional Measures , Article  1 (CHN -5). 
58 See Panel Report, Thailand – Cigare ttes, fn 1573 (discussing the Appellate Body's holding in US – 
Shrimp that one of the bases for its conclusion that a measure resulted in unjustifiable discrimination was the 
difficulty of reconciling the application of the measure with its stated objectiv e). 
59 See Panel Report, Thailand – Cigarettes , paras. 7.922 and 7.929 . The Panel found as follows in 
examining the Philippines' claims under Article  X:3(a):  
[G]ranting dual function officials the power to make customs and fiscal decisions concerning cigar ettes, 
both imported and domestic, as well as access to confidential information on imported cigarettes would appear 
to constitute an act of inappropriate and/or not sensible administration unless there is a particular rationale 
that can explain the concer ned act . …  In conclusion, given the rationale behind it , and considered in 
conjunction with safeguards in the system, we find that the Philippines has not established that the features of 
Thailand's granting selected customs and tax officials with a dual function as TTM directors necessarily lead to 
an unreasonable administration of the Thai customs and tax laws and regulations within the meaning of 
Article  X:3(a) .  
Ibid (emphasis added).  
60 See Panel Report, Thailand – Cigarettes , para. 7.925.  
61 See China's first written submission, para. 42.  WT/DS517/R/Add.1  
 
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  B. Alloc ation Principles  
The United States Has Not Demonstrated that the Allocation Principles Are 
Inconsistent with Paragraph  116 of the Working Party Report  
37. The United States claims that the Allocation Principles are inconsistent with Paragraph  116 of 
the Working Party Report , because the Allocation Principles are not transparent, predictable, fair, or 
clearly specified.  
38. In China's view, transparent, predi ctable, fair, and clearly specified TRQ administration does 
not require that an applicant know precisely how NDRC weighs the factors identified by the Allocation 
Principles . China submits that it is sufficient for applicants to know that TRQs will be alloc ated "in 
accordance with applicants' actual production and operating capacities (including historical 
production and processing, actual import performance, and operations) and other relevant 
commercial standards" . China also submits that applicants can eas ily discern from China's measures 
that there are different categories of applicants, and that NDRC takes an applicant's category into 
account in applying the Allocation Principles.62   
39. The United States further claims that the content of the category " other relevant commercial 
criteria" in the Allocation Principles is not defined, and that this also renders the Allocation Principles 
not "transparent", "predictable", "fair", or "clearly specified" within the meaning of Paragraph  116. 
China does not belie ve that the use of a residual category renders the Allocation Principles 
inconsistent with Paragraph  116 of the Working Party Report . The use of residual categories like 
"other relevant commercial criteria" is common practice in the administrative regulati ons of WTO 
Members.63  Such categories are purposefully broad in order to preserve the administering 
authority's ability to take into account all relevant information .  
40. China's method of distributing allocations is not automatic, and China does not sug gest 
otherwise . China does not believe, however, that transparent, predictable, and fair TRQ 
administration requires the elimination of any element of discretion from the allocation process . 
China submits that it is responsibly exercising "discretion and a uthority to structure its government 
and manage and administer its own laws and regulations as it deems fit."64  In this case, China 
wants to utilize the expertise of NDRC officials to the maximum extent possible by granting them 
latitude to make sufficien tly individualized decisions with respect to applications.65  China's view that 
this is the most transparent, predictable, and fair way to achieve full utilization of the TRQ should 
not be "second guess[ed]", even if there are other methods of allocation t hat might achieve this 
objective.66  China also notes that the United States has presented no evidence that any applicants 
are actually confused by the Allocation Principles .  
The United States Has Not Demonstrated that the Allocation Principles Are 
Inconsistent with Article  X:3(a) of the GATT 1994  
41. For the reasons China has explained, the Panel should exercise judicial economy with respect 
to the United  States' claim relating to the Allocation Principles under Article  X:3(a) . Even if the Panel 
proceeds to examine the U.S. claim, the Panel should reject it because the United States has not 
demonstrated that the alleged vagueness in the Allocation Principl es necessarily leads  to an 
unreasonable administration of the TRQs.  
                                                
62 See China's oral statement to the Panel at the second meeting, paras. 14 and 15.  
63 See China's first written submission, para. 54 (quoting the U.S. sugar TRQ regulations).  
64 See Panel Report, Thailand – Cigarettes , para. 7.924 . The Panel found:  
A sovereign state has the discretion and authority to structure its government and manage and 
administer its own laws and regulations as it deems fit . Accordingly, we can envision a situation where 
a government wants to utilize its resources to the maximum extent possible by, for example, granting 
officials dual functions.  
Ibid. 
65 See Panel Report, Thailand – Cigarettes , para. 7.924.  
66 See Panel Report, Thailand – Cigarettes , para. 7.924 . The Panel determined that it  was "not in a 
position to second guess the specific needs of the Thai government in assigning selected customs and tax 
officials with a dual role as a director of a state enterprise, TTM" and "therefore recognize[d] that the Thai 
government officials…may indeed be well equipped to apply their expertise in laws and regulations relating to 
customs and internal taxes to the management of TTM".  WT/DS517/R/Add.1  
 
- 41 - 
 
  42. In relation to the argument that applicants must be able to understand how NDRC evaluates 
"actual production and operating capacity", China repeats that reasonable administration does not 
require that the measures provide a detailed understanding of the ba sis upon which NDRC evaluates 
each application.  
43. In relation to the inclusion of "other relevant commercial criteria", the United States similarly 
fails to demonstrate that this necessarily leads to unreasonable administration . As China has 
explained, this residual category is a commonly used mechanism for preserving a necessary element 
of discretion in administrative decision -making processes . As China has also explained, including a 
reasonable element of discretion as part of its allocation process is  permissible . Thus, the Panel 
should reject the United States' argument that China fails to administer its TRQs for wheat, rice, and 
corn in a reasonable manner due to the alleged vagueness of the Allocation Principles.  
C. Administration of STE vs. Non -STE Portions of the TRQs  
The United States Has Not Demonstrated that the Administration of the STE 
vs. Non -STE Portions of the TRQs Is Inconsistent with Par agraph  116 of the 
Working Party Report  
44. The United States alleges in relation to the STE vs. non -STE allocation process that China does 
not administer its TRQs on a transparent or predictable basis and that it does not use administrative 
procedures that  are clearly specified . In support of these allegations, the United States repeatedly 
emphasizes that the 2017 Allocation Notice  does not address how NDRC determines which applicants 
will receive allocations from the STE versus non -STE portions of each TRQ , nor do the Allocation 
Principles distinguish or refer to the STE portion specifically.67   
45. The 2017 Allocation Notice  does not provide this information and the Allocation Principles do 
not otherwise distinguish the STE portion because applicants do n ot receive allocations from the STE 
portion of each TRQ . The entire STE portion of each TRQ is allocated to COFCO.  
46. The United States also argues that it is not transparent or predictable to deny an applicant 
the opportunity to specify whether the appli cant is requesting an allocation under the STE or non -
STE portion of the TRQs and whether the applicant would accept an STE allocation, if granted.68  
Applicants are not given this opportunity because applicants are not granted allocations under the 
STE po rtion of the TRQs .     
47. The fact that applicants are not granted allocations from the STE portion also moots the United 
States' argument that because end -users with such allocations would need to seek approval from 
NDRC to import directly in the event t hat the STE does not secure a contract to import the full 
amount of the allocation by August 15, the TRQ holder " may not be able to  import the full amount 
of TRQ allocation received."69  No TRQ Certificate holder is ever required to seek approval from NDRC  
for the right to import directly because no TRQ Certificate holder other than COFCO is ever granted 
an STE allocation in the first instance . No TRQ Certificate holder is therefore ever in a position where 
they "have just thirty days to contract for import ation."70  For this reason, the 2017 Allocation Notice  
provides no further detail regarding the post -August 15 approval process .  
48. The United States' argument that applicants allocated an amount from the STE portion of the 
TRQ "cannot be certain they wi ll be able to import the full amount within the specified timeframes, 
and thus be eligible to apply for a reallocation, if desired, and avoid any penalties associated with 
failing to import" is also moot.71  The United States' proposed hypothetical categor y of applicants 
granted STE allocations does not exist . All non -STE applicants receive the same type of allocation . 
All non -STE applicants can therefore easily predict whether they will be able to import the amounts 
allocated within specified time periods.   
                                                
67 See United States' first written submission, paras. 91 and 92, 130 -132, 172.  
68 See United States' first written submission, paras. 92, 132.  
69 See United States' first written submission, para. 147 (emphasis original).  
70 See United States' first written  submission, para. 148.  
71 See United States' first written submission, para. 145.  WT/DS517/R/Add.1  
 
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  49. The United States' arguments in relation to the use of administrative procedures that would 
not inhibit the filling of each TRQ largely repeat the U.S. arguments in relation to transparency and 
predictability and therefore are similarly inapplicable in light of the allocation of the entire STE 
portion of the TRQ to COFCO.72  In arguing that the STE vs. non -STE distinction inhibits the filling of 
the TRQ, the United States elaborates on the alleged inability of applicants to request a particular 
alloca tion type.73  As explained, however, applicants do not have the ability to choose which 
allocation type to apply for because the STE portion is only available to COFCO.  
50.  The United States also reiterates that applicants do not have information regarding the STE 
vs. non -STE allocation process . Again, because no applicants receive state trading allocations, there 
is no need for applicants to understand the basis on which th at hypothetical determination would be 
made . Furthermore, there are no "costs, time constraints, and administrative burdens" that are 
distinct to "each type of importation process" which result in "uncertainty" that "makes it more 
difficult to negotiate wi th potential exporters" because there is only one type of importation process 
for all TRQ applicants other than COFCO – direct importation.74 
51. In sum, China's administration of its TRQs is not inconsistent with its obligations under 
Paragraph  116 of the  Working Party Report  because the administration of both the STE and non -
STE portions of the TRQ is transparent, predictable, uses administrative procedures that are clearly 
specified, and does not inhibit the filling of each TRQ.  
The United States Has Not Demonstrated that the Administration of the STE 
vs. Non -STE Portions of the TRQs Is Inconsistent with Article  X:3(a) of the 
GATT 1994  
52. For the reason s China has explained, the Panel should exercise judicial economy with respect 
to the United States' claim under Article X:3(a) . Even if the Panel proceeds to examine the U.S. 
claim, the Panel should find that China administers the STE and non -STE portions  of the TRQs 
consistently with Article X:3(a) .  
53. The United States claims that because China administers a "single application process", 
applicants are less able "to anticipate and commercially plan for the allocated TRQ amounts they 
receive."75  As Chi na has explained, the use of a "single application process" does not create 
uncertainty because there is only a single type of allocation granted to non -STE applicants . The 
United States also claims that "TRQ Certificate holders can receive state trading, non -state trading, 
or a mixed allocation . However, no guidance is provided regarding how NDRC determines the 
allocation."76  This outcome is not possible . Mixed allocations cannot be granted because NDRC 
grants only one type of allocation to non -STE applicants.77  It follows that since no mixed allocations 
are granted, there is no risk that each portion of a mixed allocation will not be granted in 
commercially viable amounts and that this will "further increase risks and costs associated with 
impor tation, compounding an already unreasonable process."78  The United States' claim under 
Article X:3(a) relating to the administration the STE vs. non -STE portions of the TRQs should 
therefore be rejected.  
The United States Has Not Demonstrated that the Administration of the STE 
vs. Non -STE Portions of the TRQs Is Inconsistent with Article  XI:1 of the 
GATT 1994  
54. The United States argues that " [t]he use of  a single application for the state trading and non -
state trading TRQ allocations constitutes a 'restriction' on importation of wheat, rice, and corn within 
the meaning of Article  XI:1 of the GATT 1994" because the United States argues that "differing 
requirements and commercial consideration of state trading and non -state trading TRQ allocation, 
                                                
72 See United States' first written submission, paras. 190 -205. 
73 See United States' first written submission, para. 197.  
74 See United States' first written submission, pa ra. 201.  
75 See United States' first written submission, paras. 230, 255 -260. 
76 See United States' first written submission, para. 242.  
77 The United States points out that the sample TRQ Certificate annexed to the 2003 Provisional 
Measures indicates that  an applicant may be allocated a certain amount categorized as "state -trading" . See 
United States' first written submission, para. 258 . In practice, TRQ Certificates do not allocate amounts of this 
type because, as explained above, there is only one type o f allocation available to non -STE applicants.  
78 See United States' first written submission, para. 259.  WT/DS517/R/Add.1  
 
- 43 - 
 
  when combined with applicants' inability to decide or predict which allocation they will receive" 
creates uncertainty that discourages applicants from applying for  allocations.79   
55. The U.S. claim under Article  XI:1 of the GATT 1994 is unfounded . First, as China will explain 
in Part F below, TRQs, including measures necessary for their administration, are not "restrictions… 
on the importation of any product" with in the meaning of Article  XI:1.80  Second, as China has 
explained above, all non -STE applicants receive non -STE allocations that present the same 
requirements and implicate the same commercial considerations, therefore there is no "uncertainty" 
introduced into the administrative process via the allocation of the non -STE and STE portions of the 
TRQs.  
The United States Has Not Demonstrated that the Allocation of the STE 
Portions of the TRQs Entirely to COFCO Is Inconsistent with Paragraph  116 
of the Working Party Report  or Articles X:3(a) and XI:1 of the GATT 1994  
56. With respect to Paragraph  116, China disagrees that it is not transparent, predictable, or fai r 
for China's measures and practices to distinguish between STEs and non -STEs. STEs and non -STEs 
are different entities and China's measures expressly distinguish between them . It is therefore easily 
discernible, predictable, and fair that non -STEs and STE s are subject to different requirements.81 
57. Specifically, in China's view, there is nothing inherently unfair in NDRC's decision to allocate 
the STE portions of the TRQs entirely to COFCO without applying the Basic Criteria and Allocation 
Principles . The STE portions of the TRQs may be allocated only to those STEs authorized to import 
grains . As China has explained, COFCO is the only STE authorized to import grains.82  Applying the 
Basic Criteria and the Allocation Principles to COFCO would therefore not  make sense.  
58. As China has explained, COFCO is not an end -user as defined in China's written measures . 
COFCO is therefore not required to return its unused amounts for reallocation.83  Requiring the only 
STE authorized to import grains to return unused grains would not make sense because no other 
STE would be eligible to apply for COFCO's unused amounts at the reallocation stage.84   
59. For the same reason, penalizing COFCO at the initial allocation stage for failing to utilize its 
entire allocation wou ld not make sense . The amounts not allocated to COFCO could not be allocated 
to any other STE because COFCO is the only STE authorized to import grains . Reducing COFCO's 
annual allocation would therefore guarantee that part of the STE portion of each TRQ w ould not be 
utilized . In contrast, by allocating the entire STE portion of each TRQ to COFCO each year, NDRC 
preserves the opportunity for the STE portions to be fully utilized.85 
60. With respect to Article  XI:1, the United States has failed to demonstrat e that allocating the 
entire STE portion of each TRQ to COFCO exerts a "limiting effect" on imports independent of the 
underlying TRQ and is therefore inconsistent with Article  XI:1. In its responses to questions from 
the Panel, China provided data with re spect to the allocation of the STE and non -STE portions of the 
TRQ. This data confirms that both the non -STE and STE portions of the TRQs are fully allocated . 
Specifically, the data confirm that each year, the STE portions of the TRQs have been fully alloc ated 
to COFCO . When there is full allocation, allocation is not operating as an aggregate limitation on in -
quota imports . Thus, China's practice of allocating the entire STE portion to COFCO is not exerting 
a limiting effect on imports independent of the u nderlying TRQ.86 
                                                
79 See United States' first written submission, paras. 292, 301.  
80 See, e.g. Appellate Body Report, EC – Bananas (21.5) , para. 335.  
81 See China's res ponse to Panel question No. 63, para. 44.  
82 See China's response to Panel question No. 5(a), para. 12.  
83 See China's second written submission, para. 30.  
84 See China's response to Panel question No.  66, para. 46.  
85 See China's response to Panel question No.  66, para. 47.  
86 See China's second written submission, paras.  88 and 89.  WT/DS517/R/Add.1  
 
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  D. Public Comment Process  
The United States Has Not Demonstrated that the Public Comment Process 
Is Inconsistent with Paragraph  116 of the Working Party Report  
61. The U.S. claims under Paragraph  116 relate to the fact that the process for evaluating and 
verifying public comments i s not spelled out in the relevant measures . In practice, all of the U.S. 
concerns are unfounded . Applicants are informed of comments, they are provided with an 
opportunity to rebut comments, and comments are only taken into account if the information 
provided is verified . The United States believes that the procedures for evaluating the comments 
need to be described on the face of the measures, but the United States has presented no evidence 
that any applicant is in fact confused about the public comment pr ocess . Nor has the United States 
presented any evidence that an applicant has sought clarification concerning the public comment 
process from NDRC, and such clarification has not been provided .  
62. The United States acknowledges that "it is clear on the f ace of the Announcement of Applicant 
Enterprise Data " that this procedure exists.87  The United States therefore concedes that it is clear 
from China's measures that a public comment process is part of China's system of TRQ 
administration . The United State s' desire for more information regarding precisely how this 
procedure works in practice is not determinative of whether in fact this aspect is "clearly specified" . 
The fact that the existence of the public comment process is easily discerned from China's m easures 
and that further details can be acquired by interested entities using the public inquiry process is 
sufficient to comply with Paragraph  116. 
The Un ited States Has Not Demonstrated that the Public Comment Process 
Is Inconsistent with Article  X:3(a) of the GATT 1994  
63. For the reasons China has explained, the Panel should exercise judicial economy with respect 
to the United States' claim under Article  X:3(a) relating to the public comment process . Even if the 
Panel proceeds to examine the U.S. claim, it should reject it because the United States largely 
repeats the arguments that it presents in relation to Paragraph  116, which provide no basis for 
arguing that the public comment process necessarily leads to the unreasonable administration of the 
grains TRQs.  
E. Information Concerning TRQ Allocation and Reallocation  
The United States Has Not Demonstrated that the TRQ Allocation and 
Reallocation Information Published by China Is Inconsistent with 
Paragraph  116 of the Worki ng Party Report  and Article  X:3(a) of the GATT 
1994 
64. For the reasons China has explained, the Panel should exercise judicial economy with respect 
to the United States' claims that Paragraph  116 and Article X:3(a) require China to publish the total 
amoun ts actually allocated, returned, and reallocated.88  Even if the Panel proceeds to examine the 
United States' claims concerning the publication of this information under Paragraph  116 and 
Article  X:3(a), for the reasons China explained in its first written  submission, the United States has 
failed to establish that either Paragraph  116 or Article  X:3(a) requires China to publish this 
information.89  China also explained in its submissions and responses to Panel questions that neither 
Paragraph  116 nor Articl e X:3(a) require China to publish the identities of TRQ recipients and the 
individual amounts actually allocated to each recipient.90  China notes that the European Union 
agrees with China that no requirement to publish the identities of the recipients of TRQ allocations 
and reallocations can be derived from the text of Paragraph 116 or Article X:3(a).91 
                                                
87 See United States' response to Panel question No. 9, para. 33.  
88 See Secti on III.B, supra . 
89 See China's first written submission, paras. 61 -82. 
90 See China's first written submission, paras. 66 and 67.  
91 See China's oral statement to the Panel at the first meeting, para. 28, citing European Union's 
third party submission, pa ras. 103 and 104.  WT/DS517/R/Add.1  
 
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The United States Has Not Demonstrated that the TRQ Al location and 
Reallocation Information Published by China Is Inconsistent with 
Article  XIII:3(b) of the GATT 1994  
65. Properly interpreted, Article  XIII:3(b) requires only the publication of the total TRQ quantities 
for wheat, rice, and corn, as provided in  China's Schedule CLII . Article  XIII:3(b) refers to "import 
restrictions involving the fixing of quotas" . "To fix" means to "settle definitely" or to "determine".92  
Article  XIII:3(b) therefore refers to the determination of the initial quota amount provid ed under an 
import restriction . The "total quantity or value of the product or products" is the value that is initially 
"fixed", not some other unspecified quantity or value unknown at that point in time . The language 
that follows – "which will be permitte d to be imported" – must be interpreted in relation to the 
preceding clauses . That "which will be permitted to be imported" is therefore the "total quantity or 
value" that was initially 'fixed' . In China's case, the relevant 'total quantities' are those pr ovided in 
China's Schedule CLII for wheat, long -grain rice, short - and medium -grain rice, and corn.  
66. Under the plain meaning of the terms of Article  XIII:3(b), the scope of this provision is 
therefore limited to the total quota quantities set forth in C hina's Schedule CLII . It does not extend 
to the specific quantities later permitted to be imported in connection with individual import licenses 
issued to particular entities.  
67. The requirement to give public notice of "any change in such quantity or val ue" must also be 
interpreted in relation to the "fixing of quotas" . It follows that the "change" referred to can only be 
a change to the quotas that are initially "fixed" . As noted above, in China's case, these are the quotas 
provided in China's Schedule C LII. Thus, the "change" that must be notified would be "any change" 
to those scheduled quotas – not "any change" to the specific quantities allocated from those quotas, 
whether at the time unused quotas are returned or at the time of reallocation . China no tes that 
Canada agrees with China that these terms require only publication of the total amount that a 
Member decides will be permitted to be imported at the within -quota rate in a quota year, and any 
subsequent change to that amount.93 
68. The fact that t otal TRQ amounts may also be provided in a Member's schedule does not render 
the public notice requirements of Article  XIII:3(b) "useless".94  As China explained in its responses 
to questions from the Panel, the TRQ information in a Member's schedule will not always satisfy the 
specific public notice requirements set out in Article  XIII:3(b), such as where the specific dates of 
the quota period are not provided in the schedule.95  The public notice requirements in 
Article  XIII:3(b) are also necessary to ens ure that importers do not mistakenly equate an 
announcement that a Member intends to eliminate a scheduled TRQ through formal negotiations for 
a decision to halt administration of that TRQ during the quota period.96  Article  XIII:3(b) is also 
necessary to ensure notice continues to be provided in relation to quota periods that open between 
when a Member negotiates a change to its TRQ commitments pursuant to Article  XXVIII and 
publishes an updated schedule.97  Additionally, in the event that a Member will no t be administering 
a scheduled TRQ during the quota period because better access conditions will be applied than 
scheduled, Article  XIII:3(b) would ensure a Member provided public notice of that information.98 
69. The existence of Article  XXVIII of the GATT 1994 similarly does not render redundant the 
obligation in Article  XIII:3(b) to publish any change in quantity or value . Article  XXVIII requires a 
Member to inform other Members if it wishes to withdraw or modify any concession e mbodied in its 
schedule as a formal matter . This is not the same as notifying the public of an increase in the amount 
of a TRQ over and above the amount specified in a schedule for a given year . If China were to decide 
to increase the amounts of its TRQs b eyond the amounts specified in its Schedule CLII during the 
                                                
92 See New Shorter Oxford English Dictionary , Vol. 1, p. 962.  
93 See China's oral statement to the Panel at the first meeting, para. 22, citing Canada's third -party 
submission, paras. 34 and 35.  
94 See European Union's third -party submis sion, para. 95.  
95 See China's response to Panel question No. 36, para. 90.  
96 See Notification of Brazil in Document G/AG/N/BRA/44 of 22 February 2018.  
97 See, e.g. Notification by the European Union in Document G/AG/N/EU/40, of 15 November 2017 
(noting where applicable "[q]uantity updated with effect from 1 January 2017, pursuant to the result of 
negotiations under Articles XXIV:6 and XXVIII GATT relating to the accession of Croatia to the European 
Union.").  
98 See, e.g. Notification of Mexico in  Document G/AG/N/MEX/35 of 2 February 2018.  WT/DS517/R/Add.1  
 
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  quota period, it would be required by the terms of Article  XIII:3(b) to publish this change . China 
would not be required to inform other Members of this change pursuant to Article  XXVIII of the 
GATT 1994, and so the obligation in Article  XXVIII does not render the obligation in Article  XIII:3(b) 
redundant .  
70. China's decision to publish only the total aggregate amounts available for importation under 
each TRQ specified in China's Schedule CLII is  therefore consistent with its obligations under 
Article  XIII:3(b) of the GATT 1994.  
F. End-Use Requirements and Penalties for Non -Use  
The United States  Has Not Demonstrated that China's End -Use 
Requirements and Penalties for Non -Use Are Inconsistent with 
Paragraph  116 of the Working Party Report  
71. China disagrees with the United States that its end -use requirements and penalties inhibit the 
filling of the TRQs . In China's view, the United States' claim concerning these components of China's 
TRQs fails on three related grounds .  
72. First, the United States has challenged China's end -use requirements and penalties under a 
requirement listed in the first sentence of Paragraph  116, which addresses the administration  of 
China's TRQs . For the reasons China explains in Part  2, China's end -use requirements and penalties 
are not administrative  in nature, but instead are substantive  rules that form part of the TR Q itself . 
Consequently, these components of the TRQ are not subject to challenge under the requirement to 
administer TRQs in a manner that would not inhibit the filling of the TRQs.  
73. Second, even if end -use requirements and penalties could be properly e valuated under 
Paragraph  116, the United States has not demonstrated that end -use requirements and penalties 
inhibit the filling of the TRQs . In China's view, these measures cannot inhibit the filling of the TRQs 
because they do not exert a limiting effect  on the quantity of in -quota imports . China elaborates on 
this point in Part  2.  
74. Third, China's Schedule  CLII indicates that imposing end -use requirements and penalties is 
consistent with Paragraph  116. As China explained in its responses to Panel ques tions, penalties for 
non-use are expressly required by Schedule  CLII, at paragraph  6(D).99  Had the Members felt that 
the imposition of penalties, whether alone or in conjunction with end -use requirements, serves to 
inhibit rather than encourage the fillin g of TRQs, it is reasonable to presume that they would not 
have been included in China's Schedule .  
75. Similarly, Schedule  CLII specifies that China may take into account "production capacity" in 
determining allocations.100  Grains imported into China are  typically processed prior to sale . Taking 
an enterprise's capacity to produce processed grains into account is only logical if enterprises are 
required to process grains in their own facilities . Absent this end -use requirement, there would be 
no purpose f or collecting and considering production capacity data . As China explained in its first 
written submission, requiring production of processed grains in the applicant's own facilities is a 
reasonable means of ensuring efficient allocation of the TRQs.101  To interpret Paragraph  116 as 
prohibiting measures explicitly or implicitly contemplated by Schedule  CLII is to preclude a 
harmonious interpretation of China's obligations.  
76. For these reasons, the Panel should reject the United States' challenge under Pa ragraph  116 
to these components of China's TRQs.  
                                                
99 See China's response to Panel question No. 27, para. 77.  
100 See China's response to Panel question No. 27, para. 78.  
101 See China's first written submission, para. 126.  WT/DS517/R/Add.1  
 
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The United States Has Not Demonstrated that China's End -Use 
Requirements and Penalties for Non -Use Are Inconsistent with Article  XI:1 
of the GATT 1994  
77. The United States alleges that China's end -use requirements and penalties for non -use are 
inconsistent with Paragraph  116 of the Working Party Report  because they inhibit the filling of each 
TRQ.102  The United States also alleges that these end -use requirements and penalties are prohibited 
under Article  XI:1 of the GATT 1994 . The United States challenges the end -use requirements in 
combination with penalties and the end -use requirements per se . 
78. China submits that its end -use requirements, whether separately or in combination with 
penalties for non -use, are not inconsistent with Article  XI:1. First, TRQs are not subject to 
Article  XI:1. A TRQ is not a prohibited "quantitative restriction" because it  does not restrict the 
quantity of imports . A TRQ limits the volume of imports that may take advantage of the lower in -
quota rate, but it imposes no limit on the total volume of imports that may enter once the in -quota 
volume is filled; out -of-quota import s are simply subject to the higher, out -of-quota rate . The 
Appellate Body has previously considered and rejected the proposition that TRQs are subject to 
Article  X1:1. TRQs are "duties" subject to Article  II of the GATT 1994, not "quantitative restrictions " 
prohibited under Article  XI:1.103 
79. Second, the end -use requirements and penalties are not subject to Article  XI:1 because they 
are substantive conditions on access to the TRQ and therefore form part of the TRQ itself . TRQs are 
stepped tariffs, consist ing of a lower in -quota rate and a higher out -of-quota rate . To access the in -
quota rate, importers will typically need to comply with certain administrative  procedures, such as 
completing and submitting applications . In addition, access to a TRQ may also be limited by certain 
substantive  conditions .  
80. The distinction between the substantive content of a measure of general application and its 
administration has been clearly drawn by the Appellate Body in the context of interpreting the scope 
of Article  X:3(a).104   
81. In China's view, end -use requirements and penalties are substantive rules . These measures 
condition access to the TRQ in the same manner that customs classification rules condition access 
to certain duties . As substantive rules, these measures form part of the TRQ and fall outside the 
scope of Article  XI:1.  
82. Substantive conditions of access include conditioning access based on the country of origin of 
the imports . For example, Members may reserve a portion of a TRQ for imports from a designated 
country or countries.105  If no imports originate from a designated country, the portion of the quota 
reserved for that country may not be available for importation . In this way, the condition contributes 
to defining the amount of the quota th at is available – it does not address how that quota will be 
administered . The consistency of this type of reservation with a Member's WTO obligations could be 
                                                
102 See United States' first written s ubmission, para. 192.  
103 See Appellate Body Report, EC – Bananas (Article  21.5 – Ecuador II) / EC – Bananas III (Article  21.5 
– US), para. 335 (explaining that "[i]n contrast to quantitative restrictions, tariff quotas do not fall under the 
prohibition in  Article  XI:1 and are in principle lawful under the GATT 1994, provided that quota tariff rates are 
applied consistently with Article  I [i.e. on an MFN basis]" and that "Members are required, in accordance with 
Article  II, to provide treatment no less favo urable than that bound in their Schedules of Concessions.").  
104 Appellate Body Reports, EC – Bananas III , para. 200 and EC – Poultry , para. 115.  
105 See Notification by Canada in Document G/AG/N/CAN/116, of 12 March 2018 (Conditioning access to 
cheese and  curd by specifying that "allocation to supplying: 69.9% of the tariff rate quota (TRQ) is reserved for 
imports from the EU, 30.1% for imports from all other sources."); see also Notification by the United States in 
Document G/AG/N/USA/120, of 28 March 201 8 (noting where the tariff quota quantity "does not include 
quantities reserved for Mexico under NAFTA"); Notification by the United States in Document 
G/AG/N/USA/117, of 29 September 2017 (distinguishing between "Canada and all others" with respect to 
country import arrangement for "[s]ugar containing products (articles containing over 10% dry weight of 
sugars)") . Countries may also condition access by scheduling unlimited access for particular importers . See 
Notification by Thailand in Document G/AG/N/THA/84 of 10 February 2017 (specifying entities that may receive 
unlimited quantities of " [s]oya beans, edible and inedible, whether or not broken" and "soya bean cake").  WT/DS517/R/Add.1  
 
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  properly analysed under Article  II of the GATT 1994 . Another type of substantive condition of ac cess 
is the specification of certain end -uses for imports . This practice is common among Members.106   
83. End-use requirements are substantive because they define the parameters of the quota itself; 
if imports will not be used for the specified purpose, t hey will not be accessible for importation 
regardless of whether the applicant submits an application or complies with any other administrative 
procedural requirement . China considers that a useful point of reference for distinguishing 
substantive conditio ns on access from administrative procedural requirements is whether the 
conditions in question are set forth in the Member's schedule . For example, China's Schedule  CLII 
provides for the imposition of penalties and also of end -use requirements, through tak ing account 
of capacity to produce processed grains.  
84. The conclusion that the substantive elements of a TRQ must be examined under Article II is 
even stronger when, as in this case, the challenged aspects of the TRQ are set forth in the responding 
Membe r's schedule. As China discussed in its responses to Panel questions, the usage requirements 
and penalties for non -use are contemplated by China's Schedule CLII (and, in the case, of the 
penalties for non -use, are expressly required).107  The usage restrictions and penalties for non -use 
therefore form part of the quota described in China's Schedule. However one defines the distinction 
between substance and procedure, and between which elements of a TRQ form part of the "quota" 
that is exc luded from Article XI:1 and which do not, certainly those elements that are set forth in 
the Member's schedule are outside the purview of Article XI:1. Otherwise the "treatment" that a 
Member is allowed to provide under its schedule in accordance with Arti cle II could be found to 
constitute a prohibited "quantitative restriction" under Article XI:1  
85. In contrast to substantive conditions on access, administrative procedures pertaining to import 
licensing could be subject to Article  XI:1. However, the que stion of whether evaluation under 
Article  XI:1 is appropriate in light of the applicability of the ILP Agreement, which specifically 
addresses this subject, is unsettled . Past statements by the Appellate Body suggest that 
administrative procedures used to administer TRQs should be examined under the ILP Agreement, 
at least in the first instance.108  Acknowledging the applicability of the ILP Agreement to 
administrative measures and the applicability of Article  II to TRQs avoids the conflict between 
Article  II and Article  XI:1 that necessarily results from the United States' overly broad interpretation 
of Article  XI:1. 
86. Even if end -use requirements and penalties were properly subject to Article  XI:1, the United 
States has not demonstrated that these requir ements have a "limiting effect" on imports separate 
from the limiting effect of the quota itself . Such an effect must be demonstrated to establish a breach 
of Article  XI:1.109 
87. In Argentina – Import Measures , the Appellate Body observed that "not every burden 
associated with an import formality or requirement will entail inconsistency with Article  XI:1 of the 
GATT 1994 . Instead, only those that have a limiting effect on the importation of products will do 
so."110  To violate Article  XI:1, "the challenged  measures themselves must limit the importation of 
products, and the limitation caused by other measures should not be attributed to them."111  If 
elements such as the usage restrictions and penalties for non -use do not themselves "limit the 
                                                
106 See China's second written submission, para.  77. 
107 See China's response to Panel question No. 27.  
108 See Appellate Body Report, EC – Bananas III , para. 204 . The Appellate Body explained that:  
Although Article   X:3(a) of the GATT 1994 and Article  1.3 of the Licensing Agreement  both apply, the 
Panel, in our view, should have ap plied the Licensing Agreement  first, since this agreement deals 
specifically, and in detail, with the administration of import licensing procedures . If the Panel had done 
so, then there would have been no need for it to address the alleged inconsistency wi th Article  X:3(a) 
of the GATT 1994.  
Ibid. See also China's response to Panel question No. 38, paras. 97 -99. 
See also Panel Report, Turkey – Rice, para. 7.38 . The Panel held that:  
In contrast to Article  XI:1 of the GATT 1994 and Article  4.2 of the Agreement  on Agriculture, the 
provisions of the Import Licensing Agreement invoked by the United States and Articles X:1 and X:2 of 
the GATT 1994 deal with the administration or application of trade measures rather than with the 
substantive content of such measures  per se . 
Ibid. See also China's response to Panel question No. 38(a), para. 96.  
109 Appellate Body Report, Argentina – Import Measures , para. 5.244.  
110 Appellate Body Report, Argentina – Import Measures , para. 5.243 .  
111 Appellate Body Report, Argentina – Import Measures , para. 5.244 (emphasis added).  WT/DS517/R/Add.1  
 
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  importation of  products independently of the limiting effect of another restriction", then those 
elements "cannot be said to produce the limiting effect and, thus, [they] will not amount to a 
'restriction' captured by the prohibition in Article  XI:1."112  
88. The United  States has not demonstrated that the usage restrictions and penalties for non -use 
have a limiting effect on imports separate from the limiting effect of the quota itself . The United 
States offers nothing but speculation about how the existence of usage re strictions and penalties for 
non-use might affect the import behaviour of an individual importer.113  In the context of a TRQ, 
however, the limiting effect on trade results from the aggregate limitation on imports at the in -quota 
tariff rate . Unless the us age restrictions and penalties for non -use cause import levels to fall below 
the TRQ volume, they cannot have a limiting effect on trade that is independent of the TRQ itself . 
The United States has presented no evidence that this is the case . Moreover, Chi na has confirmed 
that the non -STE portion of each TRQ was fully utilized in 2016 and 2017, with one exception in the 
case of short - and medium -grain rice (which is not subject to usage restrictions and is therefore 
irrelevant in this context) . It is theref ore evident that the usage restrictions and penalties for non -
use do not have an independent limiting effect on imports.  
89. These considerations illustrate why the United States' reliance on cases such as India – 
Quantitative Restrictions  and Indonesia – Import Licensing is misplaced.114  Those disputes did not 
concern TRQs . In the context of a TRQ, and even accepting that TRQs can be examined under 
Article  XI:1, the complainant must demonstrate that the challenged aspects of the TRQ have an 
independent li miting effect on trade . The United States has failed to do so.  
V. CONCLUSION  
90. For the reasons set forth in its submissions, China respectfully requests that the Panel reject 
the United States' claims.  
 
 
_______________  
 
 
 
 
 
 
 
                                                
112 Appellate Body Report, Argentina – Import Measures , para. 5.244.  
113 See, e.g. United States' first written submission, para. 306.  
114 See, e.g. United States' first written submission, para. 307.  WT/DS517/R/Add.1  
 
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  ANNEX  C 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of Australia  51 
Annex  C-2 Integrated executive summary of the arguments of Brazil  54 
Annex  C-3 Integrated executive summary of the arguments of Canada  56 
Annex  C-4 Integrated executive summary of the arguments of Ecuador  60 
Annex  C-5 Integrated executive summary of the arguments of the European Union  63 
Annex  C-6 Integrated executive summary of the arguments of  Japan  65 
Annex  C-7 Integrated executive summary of the arguments of  Ukraine  67 
 
 WT/DS517/R/Add.1  
 
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  ANNEX  C-1 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGU MENTS OF AUSTRALIA  
I. INTRODUCTION  
1. As a major agricultural exporter,1 Australia has a significant interest in ensuring a transparent 
and predictable global trading system – including the transparent and predictable operation of tariff 
rate quotas (TRQs) for agricultural products . This dispute raises a number of interpretati ve questions 
regarding the interaction between the administration of TRQs and: (i) paragraph 116 of China's 
Working Party Report, incorporated into China's Accession Protocol; as well as (ii) a number of 
provisions of the General Agreement on Tariffs and T rade 1994.  
2. In these proceedings, Australia has focused on the interaction between the administration of 
TRQs and the disciplines set out in paragraph 116 of China's Working Party Report .  
II. PARAGRAPH 116 OF  CHINA'S WORKING PAR TY REPORT, INCORPORA TED I NTO 
CHINA'S ACCESSION PR OTOCOL  
3. Paragraph 116 of the Working Party Report is incorporated into China's Accession Protocol and 
therefore contains binding obligations on China.2  As recognised by both the panel and Appellate 
Body in China – Measures Affect ing Imports of Automobile Parts , the commitments China made in 
these accession documents are enforceable as an integral part of the WTO Agreement .3  China is 
therefore bound to administer TRQs in accordance with the commitments made in that paragraph, 
name ly to:  
 … ensure that TRQs were administered on a transparent, predictable, uniform, fair and non -
discriminatory basis using clearly specified timeframes, administrative procedures and 
requirements that would provide effective import opportunities; that would ref lect consumer 
preferences and end -user demand; and that would not inhibit the filling of each TRQ. China 
would apply TRQs fully in accordance with WTO rules and principles and with the provisions 
set out in China's Schedule of Concessions and Commitments o n Goods.4 
 
4. In Australia's view, China's commitments in paragraph 116 address three distinct but 
interrelated aspects of TRQ administration:  
(i) the basis on which TRQs are administered ("on a transparent, predictable, uniform, fair 
and non -discriminator y basis");  
(ii) the manner  in which TRQs should be administered ("using clearly specified timeframes, 
administrative procedures and requirements"); and  
(iii) the outcome  of TRQ administration ("[to] provide effective import opportunities … [to] 
reflect consumer preferences and end -user demand and … [to] not inhibit filling of each 
TRQ").  
                                                
1 In particular, Australia is one of the leading global exporters of wheat, and the largest exporter of 
wheat to China . In 2017, China imported AUD$551 million HS 1001 (Wheat and meslin) . Austr alia has been the 
top import source in this category since 2014: China Customs Data.  
2 See paragraph 1.2 of the Protocol on the Accession of the People's Republic of China  (WT/L/432) 
("Accession Protocol") . The paragraphs listed for incorporation are contained in paragraph 342 of the Report on 
the Working Party of the Accession of China (WT/ACC/CHN/49) ("Working Party Report") . Paragraph 116 is 
listed as one of these paragraphs and is therefore incorporated into China's Accession Prot ocol. See also United 
States' first written submission, paras. 57 -69. 
3 Panel Report, China – Auto Parts , paras 7.740 -7.741; Appellate Body Report, China – Auto Parts , 
paras. 213 -214. 
4 Paragraph 116, Working Party Report.  WT/DS517/R/Add.1  
 
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  5. As treaty text, these commitments must be interpreted using principles of internat ional treaty 
interpretation5 in accordance with Article 31(1) of the Vienna Convention on the Law of Treaties 
1969 – that is, "in good faith in accordance with the ordinary meaning to be given to the terms of 
the treaty in their context and in the light of  its object and purpose".6 
(i) "ensure TRQs were administered on a transparent, predictable, uniform, fair and non -
discriminatory basis"  
6. The first tranche of commitments in paragraph 116 relates to the basis on which TRQs are 
administered . The ordinary meaning of the verb " to administer " is "manage as a steward; carry on 
or execute (an office, affairs etc.)".7  The breadth of this term – and the lack of any textual 
qualification – indicates that it encompasses the full spectrum of activities associated w ith the 
administration of TRQs.  
7. With respect to object and purpose, Australia observes that TRQs and the disciplines placed 
upon them arose from the commitment of Members in the Uruguay Round to phase out non -tariff 
barriers, such as quantitative restri ctions, in favour of "tariffication" . In this way, TRQs are permitted 
under WTO rules because they are recognised as a tool for Members to move towards greater trade 
liberalisation . However, to function as a tool for liberalisation, Members must administer  TRQs 
consistently with the relevant prescribed disciplines . The commitments in paragraph 116 of China's 
Working Party Report were included to require China to undertake an express "commitment to 
administer TRQs in a simple, timely, predictable, uniform, n on-discriminatory and non - trade 
restrictive manner, and in a way that would not cause trade distortions".8 
8. In Australia's view, the breadth and context of the term "to administer", together with the 
object and purpose of the disciplines governing the a dministration of TRQs – and of paragraph 116 
in China's Working Party Report – indicates that the commitments in this paragraph apply to all 
administrative actions and legal instruments associated with the allocation and reallocation of TRQs.9 
9. A "basis " is "a determining principle; a set of underlying or agreed principles".10  In Australia's 
view, this term indicates that all actions and legal instruments within the broad scope of 
"administration" (discussed above) must be determined by  transparency, pre dictability, uniformity, 
fairness and non -discrimination .  
10. The object and purpose of the disciplines governing TRQ administration and of paragraph 116 
of China's Working Party Report in particular (discussed above) further support this interpretation.  
11. Australia considers that any aspects of TRQ administration not based on or determined by the 
principles of transparency, predictability, uniformity, fairness and non -discrimination, or that 
contradict these determining principles, would therefore not b e consistent with this commitment.  
(ii) "using clearly specified timeframes, administrative procedures and requirements"  
12. The second tranche of commitments in paragraph 116 relates to the manner in which TRQs 
must be administered – that is, by having th e relevant timeframes, administrative procedures and 
requirements associated with the allocation and reallocation of TRQs "clearly specified" . The ordinary 
meaning of " clearly " is "distinctly; plainly; manifestly, obviously".11  The verb " to specify " is de fined 
as "mention or name (a thing, that) explicitly; state categorically or explicitly".12  These terms 
indicate that the timeframes, administrative procedures and requirements associated with TRQ 
administration must be stated plainly and explicitly.  
                                                
5 In accordance with Article 3.2 of the WTO Understanding on Rules and Procedures Governing the 
Settlement of Disputes.  
6 Article 31(1), Vienna Convention on the Law of Treaties 1969.  
7 Shorter Oxford English Dictionary , Sixth Edition, Volume 1, 2007, page 29.  
8 Paragraph 112, Working Par ty Report.  
9 United States' first written submission, paras. 66 -69. 
10 Shorter Oxford English Dictionary , Sixth Edition, Volume 1, 2007, page 194.  
11 Shorter Oxford English Dictionary , Sixth Edition, Volume 1, 2007, page 427.  
12 Shorter Oxford English Dict ionary , Sixth Edition, Volume 2, 2007, page 2944.  WT/DS517/R/Add.1  
 
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  13. In Australia's view, in light of the object and purpose of the disciplines governing TRQ 
administration and of paragraph 116, the requirement to "clearly specify" these aspects of TRQ 
administration is to ensure that the audience that relies on this inform ation can both obtain that 
information and understand what is required.  
14. Australia considers that this commitment therefore requires that information on TRQ 
timeframes, administrative procedures and requirements must be explicit, accessible and 
comprehe nsible for the intended audience.  
(iii) "that would provide effective import opportunities; that would reflect consumer preferences 
and end -user demand and that would not inhibit filling of each TRQ"  
15. The third tranche of commitments in paragraph 116 makes clear that the administration of 
TRQs, in accordance with the prescribed basis and manner, should ensure outcomes that, among 
other things, do not inhibit the filling of each TRQ.  
16. The ordinary meaning of " inhibit " is to "restrain, p revent";13 and " fill" means to "make or 
become full".14  In Australia's view, this indicates that a Member's administration of TRQs must not  
prevent  the TRQ from being "full" – that is, from being fully exhausted.  
17. In Australia's view, taken together, t he individual prescribed commitments in paragraph 116 
therefore create a broad and comprehensive obligation for China to administer TRQs on a specific 
basis, in a specific manner, to ensure specific outcomes.  
18. Applying the relevant legal framework to th e context of this dispute, Australia considers that 
the Panel will need to determine whether not complying with any one of the commitments in 
paragraph 116 amounts to a breach of China's obligation . In particular, Australia observes that the 
facts before t he Panel indicate China's TRQs for wheat, corn and rice have been underfilled over 
several years.15  Australia considers that the Panel will therefore need to examine:  
• whether the mere underfilling of a TRQ alone determines that China's TRQ administration 
has inhibited the filling of each TRQ;  
• whether inhibiting the filling of each TRQ alone amounts to a breach of paragraph 116; or  
• whether a breach of paragraph 116 is only established if the specific basis and/or the specific 
manner in wh ich China administers its TRQs has inhibited the filling of each TRQ.  
III. CONCLUSION  
19. In summary, Australia submits that China's distinct but interrelated commitments in 
paragraph 116 of China's Working Party Report, incorporated into China's Accessio n Protocol, create 
a broad and comprehensive obligation for China to ensure all actions and legal instruments 
associated with the allocation and reallocation of TRQs are administered:  
• on a specific basis (determined by the principles of transparency, pre dictability, uniformity, 
fairness and non -discrimination);  
• in a specific manner (making explicit, accessible and comprehensible the information on 
TRQ timeframes, administrative procedures and requirements); and  
• to ensure specific outcomes (including t o ensure the filling of TRQs is not prevented).  
20. We thank the Panel for the opportunity to submit these views.  
                                                
13 Shorter Oxford English Dictionary , Sixth Edition, Volume 1, 2007, page 1384.  
14 Shorter Oxford English Dictionary , Sixth Edition, Volume 1, 2007, page 962.  
15 United States' first written submission, par as. 42 -51. WT/DS517/R/Add.1  
 
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  ANNEX  C-2 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGU MENTS OF BRAZIL  
I. CHINA 'S OBLIGATIONS UNDER PARAGRAPH 116 OF THE WORKING PARTY 
REPORT  
 
1.  Brazil interprets the overall object and purpose of the set of different obligations under 
Paragraph 116 of China 's Working Party Report as aiming for the reduction of the additional burde n 
imposed on exporter Members by Tariff Rate Quotas (TRQs). Conforming to Article XIII:2 of the 
GATT, in applying import restrictions, Members "shall aim at a distribution of trade in such product 
approaching as closely as possible the shares which the var ious contracting parties might be 
expected to obtain in the absence of such restrictions ".  
 
2. Moreover, Brazil understands that Paragraph 116 determines different types of obligations, 
which should be addressed separately on its own terms. The reason for  this approach is that the 
violation of even one of these obligations will most likely affect both the overall transparent, 
predictable and fair basis of the TRQ 's administration and its final outcome. In this sense, even if in 
practice the totality of the  TRQ is filled, there may still be a violation of the different obligations set 
out in the provision, as the competitive opportunities of exporters would be nevertheless affected. 
Brazil thus believes that the Panel should analyze each obligation on its ow n terms. Some of those 
obligations are commented below.  
 
a. TRANSPARENCY  
 
3. Brazil believes that the definition of "transparency " as the "ease of assessment of information " 
should provide useful guidance in the present case. Brazil thus understands that the test to be 
applied by the Panel should comprise the prompt availability of information to an exporter and the 
ease of understanding how the domestic authorities implement  the rules of administration of the 
TRQs.  In that sense, i t is Brazil 's view that the obligation to readily publicize detailed information 
about the amounts allocated under the TRQs and the legal/administrative reasoning justifying the 
actual distribution of the quotas are an integral part of the obligation of administering TRQs in a 
transparent manner.  
 
b. PREDICTABILITY  
 
4. Paragraph 116 of the Working Party Report establishes China 's obligation of administering its 
TRQs in a "predictable " manner. As defi ned by the United States, "the term 'predictable ', in context, 
supports an interpretation that China must administer its TRQs through a process or system of rules 
or procedures such that applicants can easily predict or anticipate how decisions regarding T RQ 
administration, including allocation and reallocation, will be made ". Brazil agrees that this is a useful 
test for the Panel to apply when assessing the conformity of China 's administration of its grains TRQs 
under the predictability obligation provided by Paragraph 116.  
 
5. Brazil does not believe that the obligations enshrined in Paragraph 116 imply "the elimination 
of any element of discretion from the allocation process ". Such discretion, however, is not 
unbounded, as it must be su bject to an obligation that the administration of –in the present dispute 
– TRQs is performed in a uniform, impartial, reasonable manner and, in the present case, in a way 
that is transparent, predictable and fair.  
 
c. EFFECTS OF THE ADMINISTRATION OF TRQ s 
 
6. As regards the effects resulting from the absence of transparency and predictability in 
Members ' domestic rules for the importation of agricultural products, Brazil notes that the system 
of tariff quotas imposes transaction costs to the exporter. The refore, the principles of transparency, 
predictability, uniformity, fairness and non -discrimination should be duly respected by the Members 
who utilize TRQs so as to avoid the imposition of additional burdens over Members that export 
agricultural products.   WT/DS517/R/Add.1  
 
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II. APPLICATION OF ARTICLE XI OF THE GATT TO THE ADMINISTRATION OF TRQs  
 
7. Brazil believes that Article XI:1 of the GATT encompasses a broad range of measures, for in 
accordance with said provision no Member shall institute or maintain prohibitions or restrictions 
other than duties, taxes or other charges "whether made effective through quotas, import or export 
licenses or other measures ". Therefore, Brazil does not see why a priori  these measures could not 
fall within the scope of Article XI:1.  
 
8. While the TRQs can be considered duties and thus not covered by Article XI:1 of the GATT, a 
measure unrelated to the TRQ itself, which restricts access to a lower tariff bound in the schedule 
can be considered a "restriction on the importation of a product " within the meaning of the provision, 
as importers would have their access to the market hindered. Such measures restrict access much 
in the same way of other requirements which have been found to be inconsistent with Article XI:1 
of the GATT, such as the requirements in the panel in India – Quantitative Restrictions  where an 
import measure that required goods to be imported only by the "actual user " violated Article XI:1 
and the prohibitions on importers from trading and/or transferring imported products i n Indonesia 
– Import Licensing  likewise.  
 
 WT/DS517/R/Add.1  
 
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  ANNEX C -3 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGU MENTS OF CANADA  
I. INTRODUCTION  
1. This dispute raises issues on the interpretation of provisions under the GATT 1994 and China 's 
Protocol of Accession regarding the administration of tariff rate quotas (TRQs) . Canada appreciates 
the opportunity it has had to provide its views on these issues and provides the following summary 
of its key arguments.  
II. INTERPRETATION UNDER  ARTICLE X :3(A) OF THE GATT 19 94 
2. Article X:3(a) requires that a Member administer its "laws, regulations, decisions and rulings 
of the kind described in paragraph 1 of this Article"  in a manner that is uniform, impartial and 
reasonable1. There are three key eleme nts that should direct the Panel's analysis in assessing a 
claim under Article X:3(a).  
3. First, the Panel must consider whether the matter at issue involves measures described in 
Article X:1 and therefore fall within the scope of Article X:3(a) . Article X:1 describes a broad range 
of measures relevant to trade including those "pertaining to … rates of duty, taxes or other charges, 
or to requirements, restrictions or prohibitions on imports or exports."  In Canada 's view, Article 
X:3(a) applies to the admi nistration of a wide range of measures, including requirements for 
importation, that could affect trade and traders.  
4. Second, the Panel must focus its analysis on assessing the Member's "administration"2 of the 
relevant legal instruments . Article X:3(a) focuses on the manner in which Members administer or 
apply the legal instruments rather than disciplining the substantive content of the measure3. 
5. Nonetheless, as clarified by the Appellate Body in EC – Selected Customs Matters , it is possible 
to challe nge under Article X:3(a) "the substantive content of a legal instrument that regulates the 
administration of a legal instrument of the kind described in Article X:1"4. To the extent that a claim 
of violation under Article X:3(a) is based on an administrati ve process, the complainant must 
demonstrate how and why certain features of the administrative processes necessarily lead to a lack 
of uniform, impartial, or reasonable administration of a legal instrument of the kind described in 
Article X:1"5.  
6. Third, the Panel must examine whether the respondent administers the legal instruments in a 
manner that is uniform, impartial or reasonable . These terms represent legally independent 
obligations6; a failure to comply with one or more of these obligations will r esult in an inconsistency 
with Article X:3(a).  
7. Canada notes that Article X:3(a) does not prescribe in detail how a Member must administer 
its trade measures in order to meet its requirements . Article X:3(a) allows some discretion for the 
Member to admin ister its trade measures "in the manner it deems fit", although such discretion must 
be exercised in a way that respects "certain minimum standards for transparency and procedural 
fairness" 7. The Panel must ultimately "exercise a balanced judgment" betwee n the "traders' 
fundamental right" to minimum standards of transparency and procedural fairness, and the 
                                                
1 Panel Reports, US – COOL , para. 7.812 .  
2 The Appellate Body has described "administration" as "putting into practical effect, or applying, a legal 
instrument of the kind described in Article X:1."  See Appellate Body Report, EC – Selected Cus toms Matters , 
para. 224 .  
3 Appellate Body Report, EC – Selected Customs Matters , para. 199 .  
4 Appellate Body Report, EC – Selected Customs Matters , para. 200 .  
5 Panel Report, Thailand – Cigarettes (Philippines),  para. 7.873 .  
6 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.867.  
7 Panel Reports, US-COOL , para. 7.861.  WT/DS517/R/Add.1  
 
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  "sovereign right" afforded to Members to manage the manner in which they administer domestic 
measures8. 
8. Previous panel reports provide some guidance . For example, a vague application criterion, 
which was interpreted by numerous departments, without any guidance, has been found to 
necessarily lead to an unreasonable administration inconsistent with Article X:3(a)9 because 
applications with equal descri ptions could succeed or fail based on interpretations applied by 
officials10.  
9. Other panels have noted that if the measures were applied in a way that negatively affects 
traders' commercial interests, for example through a procedure that "inherently con tains the 
possibility of revealing confidential business information", this may support a finding of inconsistency 
with Article X:3(a)11.  
10. Finally Canada notes that while the scope of Article X:3(a) is broad, bringing a claim under 
Article X:3(a) shoul d be undertaken cautiously and it must be supported by "solid evidence" in 
reflection of the "gravity of the accusations" inherent in the claim under Article X:3(a)12. 
11. In Canada's view, China 's administration of the TRQs falls within the scope of Artic le X:3(a) 
and therefore the panel should follow the guidance provided in previous panel reports in assessing 
whether, based on the evidence before it, the application criteria are unreasonable due to vagueness 
and application by numerous departments and ag encies without guidance and whether the 
administration of the State Trading Portion of the TRQ is unreasonable on the basis that it negatively 
affects the competitive situation of the applicant .   
III. INTERPRETATION OF TH E OBLIGATION UNDER P ARAGRAPH 116 O F CHINA 'S 
WORKING PARTY REPORT     
12. In Canada's view, the obligations under paragraph 116 of China 's Working Party Report can 
be divided into three key elements: (1) the TRQ must be administered on a basis that is transparent, 
predictable and fair; (2) t he timeframes, administrative procedures and requirements must be 
clearly specified; and (3) these clearly specified timeframes, administrative procedures and 
requirements must provide for effective import opportunities, reflect consumer preferences and en d-
user demand, and not inhibit filling of the TRQ . Within each of these three elements are specific 
obligations that must be met.  
13. Under the first element, China must fulfil all three requirements - to administer the TRQ on a 
transparent, predictable an d fair basis; a failure to fulfil any one of these requirements will result in 
a failure to comply with the obligation under paragraph 116.  
14. Canada notes that there is some overlap between the obligations under the first element of 
paragraph 116, which requires China to administer the TRQ on a transparent, predictable and fair 
basis, and Article X:3(a) of the GATT 1994, which requires a Member to administer its laws, 
regulations, decisions and rulings of general application in a manner that is uniform, i mpartial and 
reasonable . As such, the legal standard adopted under Article X:3(a) can provide guidance with 
respect to the legal standard applied under the first element of paragraph 116.  
15. Under the second element of paragraph 116, China is required to set out timeframes and 
administrative procedures in a manner that is explicit and understandable to the traders that are 
required to follow and use these procedures.  
16. With respect to the third element of paragraph 116, this requires ensuring that the cl early 
specified timeframes and administrative procedures and requirements are conducive to effective 
                                                
8 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.874 .  
9 Panel Reports, China – Raw Materials , paras. 7.744 -7.746 .  
10 Panel Reports, China – Raw Materials , para. 7.743 .  
11 Panel Report, Argentina – Hides and Leather , para. 11.94.  
12 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 217 .  WT/DS517/R/Add.1  
 
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  import opportunities under the TRQs, reflect consumer preferences and end -user demand, and do 
not inhibit filling of the TRQs.  
17. A failure to meet the sp ecific obligations in any one of these three elements would result in a 
failure to meet the obligations under paragraph 116.  
IV. INTERPRETATION OF AR TICLE XIII:3(B)  
18. Article XIII:3(b) contains a publication requirement that requires a Member applying a quota, 
or by virtue of Article XIII:5 a TRQ, to publish the quantity or value of the products that will be 
permitted for import and any change to this figure .  
19. In Canada 's view, with respect to a TRQ, this provision requires Members to publish the tota l 
quantity or value of the goods that the Member is permitting to be imported at a within -quota rate 
for a specified future period, and if there is any change to the quantity or value that is being 
permitted to be imported, the Member must publish the revi sed number.  
20. In Canada 's view, the obligation under Article XIII:3(b) goes beyond publishing the TRQ 
quantities set out in the Member's schedule and publishing any changes made to the schedule with 
respect to these quantities, as this would be of limit ed utility and is already effectively covered under 
the Decision on the Procedures for the Modification and Rectification of Schedules.  
21. However, in Canada 's view the obligation under Article XIII:3(b) does extend as far as 
requiring that the Member con tinually publish or notify each time an allocation is granted, returned 
or reallocated . Reading in this requirement would be more prescriptive than what is contemplated 
under Article XIII:3(b).  
22. Canada also notes that the specific information that need s to be published or notified will 
depend to some extent on the TRQ regime and system of allocation . The outcome required under 
Article XIII:3(b) is that the relevant traders can obtain information on the amount of quota available 
for allocation each year .  
V. INTERPRETATION OF GA TT ARTICLE XI  
23. Canada recognizes that TRQs are not prohibited by Article XI:1, as noted by the Appellate 
Body in EC – Bananas III (Article 21.5 – US) and are in principle lawful under the GATT 1994, 
provided that quota tariff rates are applied consistently with Article I13. In addition, TRQs must be 
consistent with Article II of the GATT 1994 such that "in -quota and out -of-quota tariffs must not 
exceed bound tariff rates, and import quantities made available under the ta riff must not fall short 
of the scheduled amount"14.  
24. In Canada 's view, to the extent that the TRQ is subject to conditions or requirements set out 
in the Member's schedule, those conditions are permitted; however, the implementation or 
administration of the TRQ and related conditions are subject to other applicable provisions of the 
GATT 1994 such as Article XI:1 and other relevant WTO agreements such as the Import Licensing 
Agreement . TRQ administration, which involves granting of approval to import a t a lower duty rate, 
is a type of import licensing within the meaning of Article XI:1.  
25. Therefore, the administration of the TRQs – separate from the underlying TRQs which are 
permissible – is still governed by the disciplines of Article XI:1 and Member s are required to refrain 
from administering their TRQs in a way that could restrict imports.  
26. Article XI:1 disciplines measures, whether considered individually or taken together, that have 
a limiting effect on importation or exportation . Thus, a pane l could find that a single specific measure 
is inconsistent with Arti cle XI:1 or that the effect of a number of measures, taken together, results 
in a quantitative restriction.  
                                                
13 Appellate Body Reports, EC – Bananas III (Article 21.5 – US), para. 335.  
14 Ibid. WT/DS517/R/Add.1  
 
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  A. State -Trading portion of TRQs  
27. In Canada 's view, the Panel should, in ass essing whether China's TRQ administration is 
consistent with Article XI:1, consider whether it has a "limiting effect on importation by negatively 
affecting the competitive opportunities available"15. In conducting this analysis, Canada invites the 
Panel t o consider the guidance found in the panel's report in Argentina – Import Measures . While 
Canada recognizes that Argentina – Import Measures  did not involve TRQ administration, both that 
case and this matter involve administrative procedures that can be ch aracterized as an import 
licensing system as defined in paragraph 1 of Article 1 of the Import Licensing Agreement.  
28. In Canada 's view, the Panel should consider whether, based on the evidence before it, China's 
administration of the state -trading portio n of the TRQs cumulatively restricts imports contrary to 
Article XI:1 by i) creating uncertainty regarding the applicant's ability to import the full share of the 
quota that it has been assigned; ii) imposing a significant burden on the applicants that is unrelated 
to their normal importing activity; and iii) restricting market access for imported products by 
preventing the applicants from importing as much as they desire or need .  
B. User Requirements  
29. The United States  argues that China imposes user re quirements which require the applicant 
to self -use its share of the TRQ allocation; to process the imported goods itself; and in the case of 
an enterprise that owns multiple processing plants, to require each processing plant to apply for and 
use the TRQ i n its own name16. The applicant could be subject to penalties for non -use of its allocated 
share of the TRQ17. 
30. In Indonesia – Import Licensing Regimes , the panel found that the requirements that forced 
the importers "to either use all the products they  import for processing or find alternative ways to 
dispose of unused products that do not involve selling or transferring them" constituted a restriction 
that had a limiting effect on importation contrary to Article XI:118. In Canada's view, if the Panel 
finds that the applicants are subject to the user requirements as described by the United States, the 
Panel could reach a similar conclusion in this case.  
31. With respect to penalties for non -use, Canada notes that the right to impose these are set out 
in China's schedule and therefore the imposition of penalties for non -use is permitted as part of 
China's tariff schedule . However, any additional details relating to the administration of the penalties 
and usage requirements that are set out outside of China 's tariff schedule19 can constitute additional 
conditions and requirements that form part of the regime for administering the TRQ . These additional 
administrative procedures and requirements, which are not included in China's schedule but 
designed to imple ment the TRQ, are part of the administrative procedures or licensing regime subject 
to Article XI:1.  
32. Further, in Canada 's view, to the extent that the cumulative effect of more than one 
requirement of the import licensing regime results in a restrictio n in addition to the underlying TRQ, 
the requirements could collectively result in a violation of Article XI:1 .   
VI. CONCLUSION  
33. Canada thanks the Panel for the opportunity to comment on the legal issues raised in this 
dispute.  
                                                
15 Panel Report, Colombia – Ports of Entry , para. 7.257.  
16 United States' first written submission, paras. 303 and 304.  
17 United States' first written submission, paras. 306 and 308 .  
18 Panel Report, Indonesia – Import Licensing Regimes , paras. 7.198 - 7.200.  
19 See for example 2003 Provisional Measures , Article 23 (Exhibit US -11); 2017 Allocation Notice , Article 
V (Exhibit US -15). WT/DS517/R/Add.1  
 
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  ANNEX C -4 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGU MENTS OF ECUADOR  
1 GENERAL  
Ecuador considers that the Panel should take into account both the literal and teleological 
interpretation of the multilateral rules, as well as the references of the existing jurisprudence on the 
provisions in which the Complainant has based its allegations.  
 
The Republic of Ecuador considers that this dispute has a high relevance for the country in terms of 
administration of tariff quotas and the treatment that other countries give to them in the 
international arena. Similarly, Ecuador strongly recommends and requests the Panel to review in 
detail the scope of application of the provisions invoked by the Claimant and Respondent, and the 
specific annotations provided wi thin this submission . 
 
Ecuador believes that the Panel should take into account previous cases which had set forth specific 
recommendations and findings regarding the application of tariff quotas, as well as the existing 
jurisprudence.  
 
Ecuador recommends that the Panel should take into account while analyzing the submissions, 
regulations, and laws, the principle good faith, which is a fundamental principle of international law 
in general, and of international trade law in particular, thus, a basic tenant o f the WTO´s Dispute 
Settlement System and in the light of its object, context, purpose and all of the rules of interpretation 
established in the Vienna Convention on the Law of the Treaties. In that regard, the Panel is in the 
need to assess such determina tions by interpreting all the agreements cited in the request for 
consultations through the rules of general interpretation set out in the Vienna Convention on the 
Law of Treaties.  
2 REGARDING VIOLATION OF PART I, PARAGRAPH  1.2 OF CHINA’S PROT OCOL   OF 
ACCESSION  
1. Ecuador reaffirms that Dispute Settlement System (DSS) adopted by the WTO and all its 
Members is based upon one of the most important Principles in the International Law i.e. “Good 
Faith”, therefore all the procedures under the DSS should be base d considered by “Good Faith”.  
2. “Not only action but also the absence of action, and in particular the failure to inform about 
the applicable trade laws, regulations, procedures and practices, promptly and accurate, may 
constitute a formidable barrier to trade.”1 In this regard, the United States alleges that China violated 
Part I, para. 1.2 of the Protocol of Accession because the basis for China´s TRQ2 is not (1) 
transparent; (2) predictable; or (3) fair; because its grains TRQs are not admini stered using (4) 
clearly specified administrative procedures, or (5) clearly specified requirements; this on behalf (6) 
using timeframes, administrative procedures, and requirements that would not inhibit the filling of 
each TRQ. Therefore the United State s reaffirms that TRQs for corn, wheat, and rice are not fulfilling 
the statement from Part I, para 1.2 of the Protocol of Accession.  
3. On the other hand, China disproves the claim held by United States by saying that China's 
method of distributing allocat ions is not automatic. “China does not believe, however, that 
transparent, predictable, and fair TRQ administration requires the elimination of any element of 
discretion from the allocation process.”3 China ensures certain obligations such as transparent, 
predictable, uniform, fair and non -discriminatory basis, clearly specified timeframes, administrative 
procedures and requirements.  China also bases its argument in the Panel Report of Thailand – 
                                                
1 Van Den Bossche. The law and policy of the World Trade Organization. Cambridge. Second Edition. 
2008.  
2 “a tariff rate quot a involves the application of a higher tariff rate to imported goods after a specific 
quantity of the ítem has entered the country at a lower prevailing rate” – Panel Report, US - Line Pipe, para. 
7.18. 
3 Para. 51. China’s first written submission (DS517)  WT/DS517/R/Add.1  
 
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  Cigarettes in order to exercise “discretion and authority to  structure its government and manage 
and administer its own laws and regulations as it deems fit."4   
 
3  REGARDING VIOLATION  OF ARTICLE X:3 (A) OF THE GATT 1994  
1. The United States claims that China attempts to Article X:3(a) of the GATT 1994 because 
China’s TRQ administration is not reasonable. China responded that the United States must 
demonstrate that the alleged vagueness in the Allocation Principles necessarily leads  to an 
unreasonable administration of the TRQ.  
2. Article X:3 (a) of the GATT 1994 m entions “Each contracting party shall administer  in a 
uniform, impartial and reasonable manner all its laws, regulations, decisions and rulings of the kind 
described in paragraph 1 of this Article.”  
3. Regarding to the term “shall administer” the Panel in  the case EC -Bananas III agreed that the 
text of the Article X:3(a) indicates that the requirements of uniformity, impartiality and 
reasonableness do not apply to the laws, regulations, decisions and rulings themselves but rather 
to the administration of t hose laws, regulations, decisions and rulings.5 While in Argentina - Hides 
and Leather, the Panel found that there is no requirement in Article X:3(a) that it apply only to 
“unwritten” rules.6 Furthermore, talking about the term “uniform” the jurisprudence agrees that 
uniform is understood “as a series of steps, actions, or events that are taken or occur in relation to 
the making of an administrative decision.7  
4. On the same line, by “impartial” the jurisprudence alleges that “impartial administration woul d 
appear to mean the application or implementation of the relevant laws and regulations in a fair, 
8unbiased and unprejudiced manner.”9 Finally, by “reasonable” the case China - Raw Materials the 
Panel concluded that the lack of any definition, guidelines o r standards poses a very real risk that 
this criterion will be administered differently depending on which Local Department handles the 
quota application .  
 
4  REGARDING VIOLATION  OF ARTICLE XI:1 OF THE GATT 1994  
1. The United States claims that China’s administration of its TRQs for wheat, rice, and corn is 
inconsistent Article XI: 1 of the GATT 1994, because it imposes impermissible “restrictions” on the 
importation of wheat, rice, and corn.  Article XI: 1 of the GA TT 1994 bars prohibitions or restrictions 
on importation or exportation other than through duties, taxes, or other charges. The United States 
alleges that China’s process administration creates commercial uncertainty limiting importation and 
its TRQ admini stration use restrictions on products imported under the TRQ.   
2. China alleges that “no evidence of the quantification of the effects of a measure alleged to 
restrict imported products is required to demonstrate a limitation on the importation of product s 
under Article  XI:1.  In determining whether a measure is inconsistent with Article  XI:1”10 and 
reaffirms that the restriction on the transfer of licenses, usage requirements, and penalties must be 
examined within the fact, as China assures, that they are  designed and structured to increase 
competitive opportunities for imports and promote the filling of each TRQ.   
3. It is a lot of jurisprudence in cases on the interpretation of the Article XI:1 of the GATT 1994. 
In the case Japan – Semi-conductors, the Panel established that non -binding measures, restricting 
the export of certain semi -conductors at below -cost were nevertheless restrictions.11 However, the 
Panel in EEC - Minimum Import Prices established that in the case of automatic import licensing 
const ituted a restriction of the type meant to fall under the purview of Article XI:1.12 Nonetheless, 
                                                
4 Panel Report, Thailand – Cigarettes , para. 7.924. “A sovereign state has the discretion and authority 
to structure its government and manage and administer its own laws and regulations as it deems fit.  
Accordingly, we can envision a situation where a government wants to utilize its resources to the maximum 
extent possible by, for example, granting officials dual functions.”  
5 Appellate Body Report EC -Bananas. para 200  
6 Panel Report. Argentina - Hides and leather. para. XI.739   
7 Appellate Body Report E C – Selected Customs Matters. para 224  
8 Panel Report China - Raw Materials. para. 7743  
9 Panel Report Thailand – Cigarettes. Para. VII.899  
10 Chinas first written submission (DS517) para. 144  
11 Panel Report. Japan -Semiconductors. Para 106.  
12 Panel Report  EEC- Minimum Import Prices. Para. 4.1  WT/DS517/R/Add.1  
 
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  the case Brazil - Retreaded Tyres the Panel concluded that “what is important in considering whether 
a measure falls within the types of measures covered by Art icle XI:1 is the nature of the measure.13 
 
5 REGARDING VIOLATION OF ARTICLE XIII:3 (B ) OF THE GATT 1994  
1. The United States assure that China failed in providing “meaningful” information to the public 
regarding actual TRQ allocation at the time of allocat ion, at the time unused quota amounts are 
returned, and at the time of reallocation.14 At last, the United States reaffirms that China maintains 
an import prohibition or restriction other than duties, taxes, or other charges, through administrative 
actions  creating a limitation on importation, violating with the Article XIII:3(b) of the GATT 1994.  
2. China refutes by saying that the article invoked refers to the determination of the initial quota 
amount provided under an import restriction.  The "total quan tity or value of the product or products" 
is the value that is initially "fixed", not some other unspecified quantity or value unknown at that 
point in time.  The language that follows – "which will be permitted to be imported" – must be 
interpreted in rel ation to the preceding clauses.  That "which will be permitted to be imported" is 
therefore the "total quantity or value" that was initially 'fixed'.  In China's case, the relevant 'total 
quantities' are those provided in China's Schedule CLII for wheat, l ong-grain rice, short - and 
medium -grain rice, and corn.15  
3. It is no existent jurisprudence or related to the interpretation of Article XIII: 3(b).  
 
                                                
13 Panel Report Brazil – Retreaded Tyres. Para. 7.361  
14 Paraphrase. para. 56.United States first written submission (DS517)  
15 Paraphrase. Para 85. China’s first written submission (DS517)  WT/DS517/R/Add.1  
 
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  ANNEX C -5 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGU MENTS OF THE EUROPEA N UNION  
1. As a preliminary matter, the EU submits that the Panel's findings as regards Paragraph 116 
of the Working Party Report, as incorporated into China’s Protocol of Accession to the WTO will be 
sufficient to solve this dispute because Article X:3(a) of the GATT 199 4 and Paragraph 116 impose 
broadly overlapping obligations and Paragraph 116 appears to be the more specific provision. Hence, 
the Panel should exercise judicial economy on the claims raised by the US concerning Article X:3(a).  
2. Paragraph 116 concerns a ll actions or omissions by which China manages, runs, or carries out 
its TRQs regime, whether they concern concrete punctual actions or omissions, or the guiding 
principles of that regime, including the legal instruments that regulate the administration of  the 
TRQs.  
3. The various obligations contained in Paragraph 116 relate to the same matter, i.e. the 
administration of the TRQs regime and they all respond to the same concerns raised by WTO 
Members. It is logical to expect that these obligations may some times overlap and may impart 
meaning to each other.  
4. With regard to the Basic Criteria, and the Allocation principles that must be fulfilled in order 
to receive an allocation under the TRQs at issue, as well as the and "public comment process", 
China's e xplanations tend to confirm that China does not administer these TRQs in compliance with 
Paragraph 116.  Indeed, China has relied on how those criteria, principles and process are applied 
"in practice", but has not demonstrated that this practice is set ou t in a clear, transparent and 
predictable way. Rather, China has invoked the apparently unlimited latitude for the NDRC to change 
that practice as it sees fit.  
5. Moreover, the EU has pointed to a rather manifest disconnect between various parts of China's  
schedule, which presuppose that the portions of the tariff -quota reserved for importation through 
STE should be allocated to different applicants, and China's defence in the present case, according 
to which the STE portions of the TRQs are allocated entir ely to COFCO.  
6. With regard to the Information concerning allocation and reallocation the EU considers that if 
some information must be published pursuant to paragraph 3(b), together with paragraph 5 of 
Articles XIII of the GATT 1994, then it is not neces sary to examine if the same information 
requirement can also be derived by more general provisions.  
7. In keeping with the object and purpose of the GATT, Article XIII:3 must be interpreted as 
obliging the Member which administer a TRQ to give public noti ce of both the total amount of 
permitted imports (as initially fixed by that Member) and of any change in such amount. Thus, in 
the present case China should give public notice of the total amount authorized for import on the 
TRQ certificates issued to sel ected applicants during the allocation process, the amounts returned 
by 15 September and those authorized following the reallocation process.  
8. On the other hand, the EU considers that neither Paragraph 116 nor Article X:3(a) of the GATT 
1994 can be inter preted as requiring China to make public the identity of TRQ certificate holders, 
and the amount allocated or reallocated to each of them.  
9. China's explanations concerning the allocation process for the state trading portion of the 
TRQs raise serious concerns that China’s allocation system could be incompatible with its WTO 
obligations. First, the STE portion of each TRQ is allocated to COFCO according to undisclosed 
criteria, and therefore in violation of Paragraph 116. Second, the explanation  provided by China 
seems to be at odds with China's commitments under paragraphs 6.A, 6.B, 6.C of Section I B and 
note 1of its Schedule.  
10. With regard to the usage restrictions and penalties for non -use applied by China, the EU would 
like to stress that it agrees with China that the usage restrictions and penalties for non -use cited by 
the US fall outside the scope of Article XI:1 of the GATT 1994, because Article XI:1 of the GATT 1994 
does not apply to TRQs. Indeed, TRQs are not “quantitative import rest rictions” within the meaning 
of Article XI:1 of the GATT 1994, but tariff measures.  WT/DS517/R/Add.1  
 
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  11. Many Members have bound in their Schedules TRQs or unlimited tariff concessions which are 
subject to an end -use condition. The possibility to provide for certain usage  conditions may 
encourage Members to make concessions that they would not make otherwise. If Article XI:1 would 
apply to those usage restrictions, Members would be deterred from making further concessions.  
12. Similarly, the processing requirement is not p art of the “administration” of the TRQs within 
the meaning of Paragraph 116, but a substantive condition.  
13. Finally, with regard to the penalties for the non -use of TRQs, the EU shares China's view that 
this type of measures may contribute to a more effi cient and effective use of the TRQs and therefore 
comply with Paragraph 116, provided the penalties are not disproportionate or applied 
inconsistently. China has confirmed those penalties are not applied to COFCO with respect to the 
non-use of the STE port ion of the TRQs, which is allocated to it.  
 WT/DS517/R/Add.1  
 
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  ANNEX C -6 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGU MENTS OF JAPAN  
I. LEGAL NATURE OF CHINA 'S OBLIGATIONS UNDER PARAGRAPH 116  OF THE 
WORKING PARTY REPORT  
1. With respect to the legal nature of China 's obligations under P aragraph  116 of the Working 
Party Report, P aragraph  116 provides that "China would ensure that TRQs were administered on a 
transparent, predictable, [ … and ] fair [ …] basis using clearly specified timeframes, administrat ive 
procedures and requirements [ …] that would not inhibit the filling of each TRQ. " In the same 
paragraph, it is also provided that "China would apply TRQs fully in accordance with WTO rules and 
principles. " 
2. Paragraph 116 is incorporated into  China 's Accession Protocol , which, in turn, is incorporated 
into the WTO Agreement. Specifically, Paragraph 1.2 of the Protocol states  that the Protocol "shall 
be an integral part of the WTO Agreement " and therefore contains binding obligations for China. 
Consequen tly, any failure by China to administer its TRQs in a manner consistent with its 
commitment  under Paragraph 116  would constitute a breach of its  WTO obligations.  
3. In this dispute, the United States argues  that China 's administration of its grains TRQ s is 
inconsistent with Paragraph 116 of the Working Party Report, as well as Articles X:3(a), XI:1, and 
XIII:3(b) of the GATT 1994 .1 While there may be overlapping obligations between Paragraph 116 
and the relevant provisions of the GATT 1994, Japan observe s that China 's obligations under 
Paragraph 116 are  not less stringent than those provided under the provisions of the GATT 1994. 
Thus, the Panel should examine if China meets  the requirements stipulated under Paragraph 116 in 
order to examine  whether China 's administration of its grains TRQs is inconsistent with its obligations 
under the WTO agreement s.    
II. INTERPRETATION OF CHINA 'S OBLIGATIONS UNDER PARAGRAPH 116 OF THE 
WORKING PARTY REPORT  
4. With respect to the interpretation of China 's obligations un der Paragraph 116 of the Working 
Party Report, Japan is of the view that the three following considerations should be taken into 
account.  
5. First, the United States argues that Paragraph 116 contains six "related but independent 
obligations " or "related b ut distinct commitments ", and that "failure by China to administer TRQs 
consistent with any of these commitments represents a distinct breach. "2 In response to Panel 's 
question No. 1, subparagraph (a), i n Japan 's view, the legal standard under each of the six 
obligations is  particular to China 's obligations regarding  its administration of TRQs under Paragraph 
116. Based on this understanding, Japan consider s that the legal standards under the six obligations 
may rest on common elements such as "transparent basis ", as "transparent basis " would be essential 
in examining other elements cited in Paragraph 116. At the same time, other elements may have 
differences  with respect to the way evaluation is made of relevant aspects of China 's TRQ s 
administration. I n response to the Panel 's question No. 1, subparagraph (b), Japan is of the view 
that failure by China to administer its TRQs in a manner consistent with any o f its commitments  
including those found in Paragraph 116 means that China is in breach of its WTO obligations.  
6. Second, in response to the Panel 's question No. 2, per paragraph cited by the Panel (para. 
144), Japan recognizes that the European Union subm its that "the processing  requirement is not 
part of the ‘administration ' of the TRQs within the meaning of Paragraph 116 of the Working Party 
Report ", and, as the Panel 's question describes , that it is "therefore not susceptible to a challenge 
under Paragr aph 116 of China's Working Party Report. "3 Japan also considers that the processing  
                                                
1 United States’ first writ ten submission, paras. 5 -6. 
2 United States’ first written submission, paras.  63-64. 
3 European Union ’s third  party submission, para. 144.  WT/DS517/R/Add.1  
 
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  requirement  is not part of the administration of TRQs within  the meaning of Paragraph 116, as 
argued by the European Union in its submission.  
7. Third, as a general matter, Japan considers that TRQs are "import measures " rather than 
traditional  "quantitative restriction s" such as quotas or bans . This is because they do not prohibit or 
restrict the quantity of imports , but they rather apply  a lower tariff for a certain volume of imports  
and improve market access . In this regard, t he Appellate Body stated in EC – Bananas III  that "tariff 
quotas do not fall under the prohibition in Article XI:1 and are in principle lawful under the GATT 
1994, provided that quota tariff rates are applied consistently with Article I" .4 Therefore, Japan  is of 
the view that there may be differences among Member 's import measures such as TRQs as there 
may be difference s among Members in terms of their market structure, busin ess practice and so on. 
However, such differences must remain within the confines of the WTO Agreements .  
                                                
4 Appellate Body Report, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 - 
United State s), para. 335.  WT/DS517/R/Add.1  
 
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  ANNEX C -7 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGU MENTS OF UKRAINE 
I. INTRODUCTION  
Mr. Chairperson, distinguished Members of the Panel,  
1. Ukraine welcomes this opportunity to present its views to the Panel concerning the 
administration of tariff rate quotas ( "TRQs") for grains by the People 's Republic of China ( "China ") 
and its correspondence with the relevant provisions of the  General Agreement on Tariffs and Trade 
1994 (the "GATT 1994 "). 
2. As a third party, Ukraine has a systemic and trade interest in a proper and consistent 
interpretation of the provisions of the World Trade Organization ( "WTO") covered agreements, in 
partic ular the GATT 1994. Ukraine will focus on some key issues relating to the interpretation of 
Articles X:3(a), XIII:3(b), and XI:1 of the GATT 1994 in its oral statement . Ukraine clarifies that it 
does not have any specific views on the factual aspects of th e case.  
II. ARGUMENTS  
Article X:3(a) of the GATT 1994  
3. In paras. 223 -266 of its First Written Submission, the United States argues that China 's 
administration of its TRQs for grains is incompatible with China 's obligations under Article X:3(a) of 
the G ATT 1994 because of numerous violations of reasonableness requirement of Article X:3(a).  
4. In turn, China claims that the United States has not demonstrated that the alleged vagueness 
of eligibility criteria and principles for allocation necessarily results in an unreasonable administration 
of the grains TRQs.1 Ukraine would like to highlight the following case law in thi s regard.  
5. The panel in Thailand – Cigarettes (Philippines) stipulated that the administration under Article  
X:3(a) "includes both the manner in which the legal instruments of the kind falling under Article X:1 
are applied or implemented in particular ca ses as well as a legal instrument that regulates such 
application or implementation ",2 including administrative processes leading to administrative 
decisions. Thus, it is essential for the complainant to show how and why "certain features of the 
administra tive processes necessarily lead to a lack of uniform, impartial, or reasonable 
administration of a legal instrument " provided in Article X:1.3 
6. In Dominican Republic – Import and Sale of Cigarettes case, the panel stated that 
requirements of Article X:3( a) such as uniformity, impartiality, and reasonableness are not 
cumulative4 which means that it is enough to demonstrate violation of one requirement to establish 
violation of Article X:3(a). On the other hand, in order to comply with Article X:3(a) it is necessary 
to fulfil all three requirements.5 
7. The United States claims that China 's administration of grains TRQs is not reasonable.6 In this 
regard, in US – COOL, the panel stipulated that "reasonable " administration under Article X:3(a) 
"entails a cons ideration of factual circumstances specific to  each case. "7 
8. Notwithstanding the above -mentioned reasoning of the panel regarding assessment on the 
case-by-case basis whether administration is reasonable, Ukraine believes that in any case "rigorous 
                                                
 Ukraine has requested that its Oral Statement serve as Integrated Executive Summary.  
1 China’s First Written Submission, para. 29.  
2 Panel Report, Thailand – Cigarettes (Philippines), para. 7.873.  
3 Ibid. 
4 Panel Report, Dominican Republic – Import and Sale of Cigarettes , para. 7.383.  
5 Panel Report, Thailand – Cigarettes (Philippines), para. 7.867.  
6 US’ First Written Submission, para. 223.  
7 Panel Report, US – COOL , para. 7.851.  WT/DS517/R/Add.1  
 
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  compl iance with the fundamental requirements of due process  should be required in the application 
and administration of a measure "8 and this is for the respondent to substantiate that the 
administration of the measure is conducted in uniform, impartial, and rea sonable manner.  
Article XIII:3(b) of the GATT 1994  
9. Realizing that there is no interpretation of Article XIII:3(b) of the GATT 1994 up to date, 
Ukraine draws the Panel 's attention to the customary rules of interpretation of public international 
law available under Article 3.2 of the Dispute Settlement Understanding ( "DSU") which are codified 
in the Vienna Convention on the Law of Treaties, namely Articles 31 -33 thereof.  
10. Ukraine believes that special attention should be given to the interpretation of the phrases 
"notice of the total quantity or value of the product or products " and "any change in such quantity 
or value " of Article XIII:3(b), bearing in mind that a treaty shall be interpreted in good faith in 
accordance with the or dinary meaning to be given to the terms of the treaty in their context and in 
the light of its object and purpose.9 
Article XI:1 of the GATT 1994  
11. Article XI:1 of the GATT 1994 was already interpreted by the preceding panels and Appellate 
Body regarding  application of TRQs.10 
12. Nevertheless, panel reports are binding between the parties for the particular dispute11 and 
the determination whether a measure constitutes a breach of member 's obligations under the WTO 
Agreements should be made on a case -by-case basis,12 taking account of all relevant facts .  
13. In Article XI:1 the expression "made effective through " precedes the terms "quotas, import 
or export licences or other measures ". This suggests that the scope of Article XI:1 covers a measure 
through which a prohibition or restriction is produced or becomes operative.  
14. Thus, the Panel in this case is not prevented from examining whether China 's TRQs 
administration is a measure through which "impermissible restrictions on the importation "13 
produced or became operative. In Ukraine 's view, the relevant guidance in this case is to establish 
whether China 's TRQs administration "imposes a restriction or prohibition on importation. "14 
III. CONCLUSION  
15. Mr. Chairperson, distinguished members of the Panel and representatives of the delegations, 
this concludes Ukraine 's oral statement. We thank the Panel for its consideration of the views of 
Ukraine. We look forward to answering any questions that the Panel may have.  
 
 
 
__________  
                                                
8 Appellate Body Report, US – Shrimp , para. 182.  
9 Vienna Convention on the Law of Treaties, Article 31.  
10 Appellate Body Report, EC – Bananas III (Article 21.5 – US), para. 335.  
11 Appellate Body Report, Japan – Alcoholic Beverages II , page 14.  
12 Appellate Body Report , China – Raw Materials , para. 328. 
13 US’ First Written Submission, para. 335.  
14 Panel Report, Indonesia – Import Licensing Regimes , para. 7.55.