WT/DS517/R  
 
18 April 2019  
(19-2573) Page: 1/77 
  Original: English  
 
  
 
CHINA – TARIFF RATE QUOTAS  
FOR CERTAIN AGRICULT URAL PRODUCTS  
REPORT  OF THE PANEL  
 
  WT/DS517/R  
 
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  TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ....... 11 
1.1   Complaint by the United States  ................................ ................................ ..................  11 
1.2   Panel establishment and composition  ................................ ................................ ..........  11 
1.3   Panel proceedings  ................................ ................................ ................................ ..... 11 
2   FACTUAL ASPECTS ................................ ................................ ................................ .... 12 
2.1   Measure at issue  ................................ ................................ ................................ ...... 12 
2.2   China's system of TRQ administration for wheat, rice, and corn  ................................ ...... 13 
2.2.1    Initial allocation of TRQ amounts  ................................ ................................ .............  14 
2.2.1.1    Announcement of TRQ amounts available for allocation  ................................ ...........  14 
2.2.1.2    Application criteria  ................................ ................................ ..............................  14 
2.2.1.3    Application process  ................................ ................................ .............................  16 
2.2.1.4    Allocation principles ................................ ................................ .............................  17 
2.2.1. 5   Public comment process  ................................ ................................ .......................  17 
2.2.2    Rules and requirements for allocated TRQ amounts  ................................ ....................  18 
2.2.2.1    STE and non -STE portions of TRQs  ................................ ................................ ........  18 
2.2.2.2    Usage requirements for wheat, rice, and corn imported under TRQ allocations  ............  19 
2.2.2.3    Return o f unused TRQ amounts and penalties for their non -use ................................  19 
2.2.3    Reallocation of returned TRQ amounts  ................................ ................................ ...... 20 
3   PARTIES' REQUEST S FOR FINDINGS AND R ECOMMENDATIONS  ...............................  21 
4   ARGUMENTS OF THE  PARTIES  ................................ ................................ ..................  21 
5   ARGUMENTS OF THE  THIRD PARTIES  ................................ ................................ ....... 21 
6   INTERIM REVIEW  ................................ ................................ ................................ ..... 22 
6.1   Factual aspects  ................................ ................................ ................................ ........  22 
6.2   Claims under Paragraph 116 of China's Working Party Report  ................................ ........  22 
6.3   Claim under Article XIII:3(b) of the GATT 1994  ................................ ............................  26 
6.4   Claim under Article X:3(a) of the GATT 1994  ................................ ...............................  26 
7   FINDINGS  ................................ ................................ ................................ ................  26 
7.1   Claims under Paragraph 116 of China's Working Party Report  ................................ ........  26 
7.1.1    Introduction  ................................ ................................ ................................ ..........  26 
7.1.2    Legal prov ision ................................ ................................ ................................ ...... 27 
7.1.3    Horizontal issues  ................................ ................................ ................................ ... 29 
7.1.4    Assessment of the individual aspects of China's TRQ administration challenged  
under Paragraph 116  ................................ ................................ ................................ ........  31 
7.1.4.1    Basic eligibility criteria  ................................ ................................ .........................  31 
7.1.4.1.1    Introduction  ................................ ................................ ................................ .... 31 
7.1.4.1.2    Basic eligibility criteria at issue  ................................ ................................ ..........  31 
7.1.4.1.3    Main arguments of the parties  ................................ ................................ ...........  32 
7.1.4.1.4    Analysis by the Panel  ................................ ................................ ........................  32 
7.1.4.1.5    Conclusion  ................................ ................................ ................................ ...... 36 WT/DS517/R  
 
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  7.1.4.2    Alloca tion principles and reallocation procedures  ................................ .....................  36 
7.1.4.2.1    Introduction  ................................ ................................ ................................ .... 36 
7.1.4.2.2    Allocation principles and reallocation procedures at issue  ................................ ...... 36 
7.1.4.2.3    Main arguments of the parties  ................................ ................................ ...........  37 
7.1.4.2.4    Analysis by the Panel  ................................ ................................ ........................  38 
7.1.4.2.4.1    Allocation principles  ................................ ................................ .......................  38 
7.1.4.2.4.2    Reallocation procedures  ................................ ................................ .................  41 
7.1.4.2.5    Conclusion  ................................ ................................ ................................ ...... 42 
7.1.4.3    Public comment process  ................................ ................................ .......................  42 
7.1.4.3.1    Introduction  ................................ ................................ ................................ .... 42 
7.1.4.3.2    Public comment process at issue  ................................ ................................ ........  42 
7.1.4.3.3    Main arguments of the parties  ................................ ................................ ...........  43 
7.1.4.3.4    Analysis by the Panel  ................................ ................................ ........................  43 
7.1.4.3.5   Conclusion  ................................ ................................ ................................ ...... 44 
7.1.4.4    STE and non -STE portions of TRQs  ................................ ................................ ........  45 
7.1.4.4.1    Introduction  ................................ ................................ ................................ .... 45 
7.1.4.4.2    Provisions at issue concerning STE and non-STE portions of TRQs  ..........................  45 
7.1.4.4.3    Main arguments of the parties  ................................ ................................ ...........  45 
7.1.4.4.4    Analysis by the Panel  ................................ ................................ ........................  47 
7.1.4.4.4.1    Allocation of STE and non -STE portions of the TRQs  ................................ ...........  47 
7.1.4.4.4.2    Procedure for non -STE recipients to import under STE portions of TRQs  ...............  50 
7.1.4.4.5    Conclusion  ................................ ................................ ................................ ...... 51 
7.1.4.5    Public notice  ................................ ................................ ................................ ....... 51 
7.1.4.5.1    Introduction  ................................ ................................ ................................ .... 51 
7.1.4.5.2    Extent of the public notice at issue  ................................ ................................ ..... 51 
7.1.4.5.3    Main arguments of the parties  ................................ ................................ ...........  52 
7.1.4.5.4    Analysis by the Panel  ................................ ................................ ........................  53 
7.1.4.5.5    Conclusion  ................................ ................................ ................................ ...... 55 
7.1.4.6    Usage requirements for wheat, rice, and corn impor ted under TRQ allocations  ............  55 
7.1.4.6.1    Introduction  ................................ ................................ ................................ .... 55 
7.1.4.6.2    Usage requirements at issue  ................................ ................................ ..............  56 
7.1.4.6.3    Main arguments of the parties  ................................ ................................ ...........  56 
7.1.4.6.4    Analysis by the Panel  ................................ ................................ ........................  57 
7.1.4.6.4.1    Usage requirements for wheat and corn imported under TRQ allocations  ..............  57 
7.1.4.6.4.2    Usage requirement for rice imported under TRQ allocations  ................................  60 
7.1.4.6.5    Conclusion  ................................ ................................ ................................ ...... 61 
7.1.5    Overall assessment of China's TRQ administration under Paragraph 116  .......................  62 
7.2   Claim under Article XIII:3(b) of the GATT 1994  ................................ ............................  64 
7.2.1    Introduction  ................................ ................................ ................................ ..........  64 
7.2.2    Legal provision  ................................ ................................ ................................ ...... 64 WT/DS517/R  
 
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  7.2.3    Main arguments of the parties  ................................ ................................ .................  64 
7.2.4    Analysis by the Panel  ................................ ................................ .............................  65 
7.2.5    Conclusion  ................................ ................................ ................................ ............  68 
7.3   Claim under Article X:3(a) of the GATT 1994  ................................ ...............................  68 
7.3.1    Introduction  ................................ ................................ ................................ ..........  68 
7.3.2    Legal provision  ................................ ................................ ................................ ...... 68 
7.3.3    Main arguments of the parties  ................................ ................................ .................  69 
7.3.4    Analysis by the Panel  ................................ ................................ .............................  70 
7.4   Claim under Article XI:1 of the GATT 1994  ................................ ................................ .. 73 
7.4.1    Introduction  ................................ ................................ ................................ ..........  73 
7.4.2    Legal provision  ................................ ................................ ................................ ...... 73 
7.4.3    Main arguments of the parties  ................................ ................................ .................  73 
7.4.4    Analysis by the Panel  ................................ ................................ .............................  75 
8   CONCLUSIONS AND RECOMMENDATIONS  ................................ ................................  76 
 
 WT/DS517/R  
 
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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 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  
 
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  CASES CITED IN THIS REPORT  
Short Title  Full Case Title and Citation  
Argentina – Financial 
Services  Panel Report, Argentina – Measures Relating to Trade in Goods and Services , 
WT/DS453/R  and Add.1, adopted 9 May 2016, as modified by Appellate Body 
Repor t WT/DS453/AB/R, DSR 2016:II, p. 599  
Argentina – Hides and 
Leather  Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and 
the Import of Finished Leather , WT/DS155/R  and Corr.1 , adopted 16 February 
2001, DSR 2001:V, p. 1779  
Argenti na – Import 
Measures  Appellate Body Reports, Argentina – Measures Affecting the Importation of 
Goods , WT/DS438/AB/R  / WT/DS444/AB/R  / WT/DS445/AB/R , adopted 26 
January 2015, DSR 2015:II, p. 579  
Brazil – Taxation  
 
 
 Panel Reports, Brazil – Certain Measures Concerning Taxation and Charges , 
WT/DS472/R , Add.1 and Corr.1 / WT/DS497/R , Add.1 and Corr.1, adopted 11 
January 2019, as modified by Appellate Body Reports WT/DS472/AB/R / 
WT/DS497/AB/R  
Canada – Wheat Exports  
and Grain Imports  Appellate Body Report, Canada – Measures Relating to Exports of Wheat and 
Treatment of Imported Grain , WT/DS276/AB/R , adopted 27 September 2004, 
DSR 2004:VI, p. 2739  
China – Auto Parts  Appellate Body Reports, China – Measures Affecting Imports of Automobile 
Parts, WT/DS339/AB/R  / WT/DS340/AB/R  / WT/DS342/AB/R , adopted 12 
January 2009, DSR 2009:I, p. 3  
China – Auto Parts  Panel Reports , China – Measures Affecting Imports of Automobile Parts , 
WT/DS339/R , Add.1  and Add.2 / WT/DS340/R , Add.1 and Add.2 / 
WT/DS342/R , Add.1 and Add.2, adopted 12 January 2009, upheld 
(WT/DS339/R) and as modified (WT/DS340/R / WT/ DS342/R) by Appellate 
Body Reports WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, DSR 
2009:I, p. 119  
China – Rare Earths  Appellate Body Reports, China – Measures Related to the Exportation of Rare 
Earths, Tungsten, and Molybdenum , WT/DS431/AB/R  / WT/DS432/AB/R  / 
WT/DS433/AB/R , adopted 29 August 2014, DSR 2014:III, p. 805  
China – Rare Earths  Panel Reports, China – Measures Related to the Exportation of Rare Earths, 
Tungsten, and Molybdenum , WT/DS431/R  and Add.1 / WT/DS432/R  and Add.1 
/ WT/DS433/R  and Add.1, adopted 29 August 2014, upheld by Appellate Body 
Reports WT/DS431/AB/R / WT/DS432/AB/R / WT/DS433/AB/R, DSR 2014:IV, 
p. 1127  
China – Raw Materials  Appellate Body Reports, China – Measures Related to the Exportation of Various 
Raw Materials , WT/DS394/AB/R  / WT/DS395/AB/R  / WT/DS398/AB/R , adopted 
22 February 2012, DSR 2012:VII, p. 3295  
China – Raw Materials  Panel Reports, China – Measures Related to the Exportation of Various Raw 
Materials , WT/DS394/R , Add.1 and Corr.1 / WT/DS395/R , Add.1 and Corr.1 / 
WT/DS398/R , Add.1 and Corr.1, adopted 22 February 2012, as modified by 
Appell ate Body Reports WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, 
DSR 2012:VII, p. 3501  
Dominican Republic – 
Import and Sale of 
Cigarettes  Panel Report, Dominican Republic – Measures Affecting the Importation and 
Internal Sale of Cigarettes , WT/DS302/R , adopted 19 May 2005, as modified by 
Appellate Body Report WT/DS302/AB/R, DSR 20 05:XV, p. 7425  
EC – Bananas III  Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R , adopted 25 September 1997, 
DSR 1997:II, p. 591  
EC – Bananas III  Panel Reports, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas , WT/DS27/R/ECU (Ecuador)  / WT/DS27/R/GTM, 
WT/DS27/R/HND (Guatemala and Honduras)  / WT/DS27/R/MEX (Mexico)  / 
WT/DS27/R/USA (US), adopted 25  September 1997, as modified by Appellate 
Body Report WT/DS27/AB/R, DSR 1997:II, p.  695 to DSR 1997:III, p.  1085 
EC – Bananas III  
(Article  21.5 – Ecuador II) /  
EC – Bananas III  
(Article  21.5 – US) Appellate Body Reports, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas – Second Recourse to Article  21.5 of the DSU 
by Ecuador , WT/DS27/AB/RW2/ECU , adopted 11 December 2008, and Corr.1 / 
European Com munities – Regime for the Importation, Sale and Distribution of 
Bananas – Recourse to Article  21.5 of the DSU by the United States , 
WT/DS27/AB/RW/USA  and Corr.1, adopted 22 December 2008, DSR 
2008:XVIII, p.  7165 WT/DS517/R  
 
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  Short Title  Full Case Title and Citation  
EC – Hormones  Appellate Body Report, European Communities – Measures Concerning Meat 
and Meat Products (Hormone s), WT/DS26/AB/R , WT/DS48/AB/R , adopted 13 
February 1998, DSR 1998:I, p. 135  
EC – Poultry  Appellate Body Report, European Communities – Measures Affecting the 
Importation of Certain Poultry Products , WT/DS69/AB /R, adopted 23 July 1998, 
DSR 1998:V, p. 2031  
EC – Sardines  Appellate Body Report, European Communities – Trade Description of Sardines , 
WT/DS231/AB/R , adopted 23 October 2002, DSR 2002:VIII, p. 3359  
EC – Select ed Customs 
Matters  Appellate Body Report, European Communities – Selected Customs Matters , 
WT/DS315/AB/R , adopted 11 December 2006, DSR 2006:IX, p. 3791  
EU – Poultry Meat (China)  Panel Report, European Union – Measures Affecting Tariff Concessions on 
Certain Poultry Meat Products , WT/DS492/R  and Add.1, adopted 19 April 2017, 
DSR 2017:III, p. 1067  
India – Agricultural Products  Panel Report, India – Measures Concerning the Importation of Certain 
Agricultural Products , WT/DS430/R  and Add.1, adopted 19 June 2015, as 
modified by Appellate Body Report WT/DS430/AB/R , DSR 2015:V, p. 2663  
India – Autos  Panel Report, India – Measures Affecting the Automotive Sector , WT/DS146/R , 
WT/DS175/R , and Corr.1, adopted 5 April 2002, DSR 2002:V, p. 1827  
India – Quantitative 
Restrictions  Panel Report, India – Quantitative Restrictions on Imports of Agricultural, 
Textile and Industrial Products , WT/DS90/R , adopted 22 September 1999, 
upheld by Appellate Body Report WT/DS90/AB/R, DSR 1999:V, p. 1799  
India – Solar Cells  Panel Report, India – Certain Measures Relating to Solar Cells and Solar 
Modules , WT/DS456/R  and Add.1, adopted 14 October 2016, as modified by 
Appellate Body Report WT/DS456/AB/R, DSR 2016:IV, p.  1941 
Indonesia – Import 
Licensing Regimes  Panel Report, Indonesia – Importation of Horticultural Products, Animals and 
Animal Products , WT/DS477/R , WT/DS478/R , Add.1 and Corr.1, adopted 22 
November 2017, as modified by Appellate Body Report WT/DS477/AB/R, 
WT/DS478/AB/R , DSR 2017:VII, p. 3131 
Japan – DRAMs (Korea)  Panel Report, Japan – Countervailing Duties on Dynamic Random Access 
Memories from Korea , WT/DS336/R , adopted 17 December 2007, as modified 
by Appellate Body Report WT/ DS336/AB/R, DSR 2007:VII, p. 2805  
Japan – Semi-Conductors  GATT Panel Report, Japan – Trade in Semi -Conductors , L/6309, adopted 4 May 
1988, BISD 35S/116  
Russia – Pigs (EU)  Panel Report, Russian Federation – Measures on the Importation of Live Pigs, 
Pork and Other Pig Products from the European Union , WT/DS475/R  and Add. 1, 
adopted 21 March 2017, as modified by Appellate Body Report 
WT/DS475/AB/R , DSR 2017:II, p. 361  
Thailand – Cigarettes 
(Philippines)  Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from the 
Philippines , WT/DS371/R , adopted 15 July 2011, as modified by Appellate Body 
Report WT/DS37 1/AB/R , DSR 2011:IV, p. 2299  
Turkey – Textiles  Panel Report, Turkey – Restrictions on Imports of Textile and Clothing Products , 
WT/DS34/R , adopted 19 November 1999, as modified by Appellate Body Report 
WT/DS 34/AB/R, DSR 1999:VI, p. 2363  
US – Anti-Dumping 
Methodologies (China)  Panel Report, United States – Certain Methodologies and Their Application to 
Anti-Dumping Proceedings Involving China , WT/DS471/R  and Add.1, adopted 
22 May 2017, as modified by Appellate Body Report WT/DS471/AB/R, DSR 
2017:IV, p. 1589  
US – Carbon Steel (India )  Appellate Body Report, United States – Countervailing Measures on Certain Hot -
Rolled Carbon Steel Flat Products from India , WT/DS436/AB/R , adopted 19 
December 2014, DSR 2014:V, p. 1727  
US – COOL (Ar ticle 21.5 – 
Canada and Mexico)  Panel Reports, United States – Certain Country of Origin Labelling (COOL) 
Requirements – Recourse to Article 21.5 of the DSU by Canada and Mexico , 
WT/DS384/RW  and Add.1 / WT/DS386/RW  and Add.1, adopted 29 May 2015, 
as modified by Appellate Body Reports WT/DS384/AB/RW / WT/DS386/AB/RW, 
DSR 2015:IV, p.2019  
US – Gambling  Appellate Body Report, United States – Measures Affecting the Cross -Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R , adopted 20 April 
2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475)  
US – Hot-Rolled Steel  Panel Report, United States – Anti-Dumping Measures on Certain Hot -Rolled 
Steel Products from Japan , WT/DS184/R , adopted 23 August 2001 modified by 
Appellate Body Report WT/DS184/AB/R, DSR 2001:X, p. 4769  WT/DS517/R  
 
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  Short Title  Full Case Title and Citation  
US – Poultry (China)  Panel Report, United States – Certain Measures Affecting Imports of Poultry 
from China , WT/DS392/R , adopted 25 October 2010, DSR 2010:V, p. 1909  
US – Shrimp (Ecuador ) Panel Report, United States – Anti-Dumping Measure on Shrimp from Ecuador , 
WT/DS335/R , adopted on 20 February 2007, DSR 2007:II, p. 425  
US – Shrimp (Thailand)  Panel Report, United States – Measures Relating to Shrimp from Thailand , 
WT/DS343/R , adopted 1 August 2008, as modified by Appellate Body Report 
WT/DS343/AB/R / WT/DS345/AB/R, DSR 2008:VII, p. 2539  
US – Softwood Lumber IV  Appellate Body Report, United States – Final Countervailing Duty Determination 
with Respect to Certain Softwood Lumber from Canada , WT/DS257/AB/R , 
adopted 17 February 2004, DSR 2004:II, p. 571  
US – Stainless Steel (Korea)  Panel Report, United States – Anti-Dumping Measures on Stainless Steel Plate 
in Coils and Stainless Steel Sheet and Strip from Korea , WT/DS179/R , adopted 
1 February 2 001, DSR 2001:IV, p. 1295  
US – Tuna II (Mexico) 
(Article 21.5 – Mexico)  Appellate Body Report, United States – Measures Concerning the Importation, 
Marketing and Sale of Tuna and Tuna Products – Recourse to Article 21.5 of the 
DSU by Mexico , WT/DS381/AB/RW  and Add.1, adopted 3 December 2015, DSR 
2015:X, p. 5133  
US – Tuna II  (Mexico) 
(Article  21.5 – US) /  
US – Tuna II (Mexico) 
(Article  21.5 – Mexico II)  Panel Reports, United States – Measures Concerning the Importation, Marketing 
and Sale of Tuna and Tuna Products – Recourse to Article 21.5 of the DSU by 
the United States , WT/DS381/RW/USA  and Add.1 / United States – Measures 
Concerning the Impo rtation, Marketing and Sale of Tuna and Tuna Products – 
Second Recourse to Article 21.5 of the DSU by Mexico , WT/DS381/RW2  and 
Add.1, adopted 11 January  2019, as upheld  by Appellate Body Report 
WT/DS 381/AB/R W/USA / WT/DS 381/AB/R W2 
US – Wool Shirts and 
Blouses  Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R , adopte d 23 May 1997, and 
Corr.1, DSR 1997:I, p. 323  
US – Zeroing (EC) (Article 
21.5 – EC) Panel Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the DSU 
by the European Communiti es, WT/DS294/RW , adopted 11 June 2009, as 
modified by Appellate Body Report  WT/DS294/AB/RW, DSR 2009:VII, p. 3117  
 
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EXHI BITS REFERRED TO IN THIS REPORT  
Exhibit  Short Title  
(if applicable)  Description/Long Title  
USA-1 Working Party Report  Report on the Working Party on the Accession of China  
WT/ACC/CHN/49 (October 1, 2001)  
USA-2 Accession Protocol  Protocol on the Accession of the People's Republic of China  
WT/L/432 (November 23, 2001)  
USA-11 2003 Provisional 
Measures  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)  
USA-13 2003 List of NDRC 
Authorized Agencies  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)  
USA-14 Catalogue of Import 
State Trading 
Enterprises  Catalogue of Import State Trading Enterprises (Ministry of 
Foreign Trade and Economic Cooperation 2001 Announcement 
No. 28, published 11 December 2001)   
USA-15 2017 Allocation Notice  Allocation Notice and Attached Application Criteria and 
Allocation Principles for Import Tariff -Rate Quotas for Grains in 
2017 (National Development and Reform Commission 2016 
Public Notice No. 23, issued 10 October 2016)  
USA-16 2016 Allocation Notice  Allocation Notice and Attached Application Criteria and 
Allocation Principles for Import Tariff -Rate Quotas for Grains in 
2016 (National Development and Reform Commission 2015 
Public Notice No. 22, issued 29 September 2015)  
USA-17 2017 Reallocation Notice  Reallocation Notice for Import Tariff -Rate Quotas for Agricultural 
Products in 2017 (National Development and Reform 
Commission and Ministry of Commerce 2017 Public Notice No. 
11, issued 11 August 2017)  
USA-19 2017 Announcement of 
Applicant Enterprise 
Data Announcement of Applicant Enterprise Data for Import Tariff -
Rate Quotas for Grains in 2017 (National Development and 
Reform Commission, issued 1 December 2016)  
USA-20 2016 Announcement of 
Enterprise Data  Announcement of Applicant Enterprise Data for Import Tariff -
Rate Quotas for Grains in 2016  (National Development and 
Reform Commission, issued 4 December 2015)  
USA-23 China 's Schedule CLII, 
Part I, Section I (B)  Schedule CLII – People 's Republic of China, Part I – Most-
Favoured -Nation Tariff: Section I (B) – Tariff Quotas  
CHN-15 TRQ Guidelines  Guideline on the Examination and Approval of Grain Import 
TRQs (National Development and Reform Commission, 
published 27 May 2017)  
 
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  ABBREVIATIONS USED I N THIS REPORT  
Abbreviation  Description  
Accession Protocol  Protocol on the Accession of the People's Republic of China to the WTO  
COFCO  China National Cereals, Oils and Foodstuffs Import and Export Corporation  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
GATT 1994  General Agreement on Tariffs and Trade 1994  
MOFCOM  Ministry of Commerce of China  
NDRC  National Development and Reform Commission of China  
Non-STE Non-state trading enterprises  
Schedule CLII  China's Schedule of Concessions and Commitments on Goods  
STEs State trading enterprise s 
TRQ  Tariff rate q uota 
Vienna Convention  Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155 
UNTS 331; 8 International Legal Materials 679  
WTO World Trade Organization  
 WT/DS517/R  
 
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  1  INTRODUCTION  
1.1  Complaint by the United States  
1.1.  On 15 December 2016 , the United States  requested consultations with China  pursuant to 
Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes 
(DSU) and Article XXII of the General Agreement on Tariffs and Trade 1994  (GATT 1994) with respect 
to the measures and claims set out below.1 
1.2.  Consultations were held on 9 February 2017 . 
1.2  Panel establishment and composition  
1.3.  On 18 August 2017 , the United States  requested the establishment of a panel pursuant to 
Article  6 of the DSU with standard terms of reference.2 At its meeting on 22 September 201 7, the 
Dispute Settlement Body (DSB) established a panel pursuant to the request of the United States  in 
document WT/DS 517/6 , in accordance with Article  6 of the DSU.3 
1.4.  The Panel's terms of reference are the following:  
To examine, in the light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by the United States  in 
document WT/DS 517/6  and to make such findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements.4 
1.5.  On 1 February 2018 , the United States  requested the Director -General to determine the 
composition of the Panel, pursuant to Article 8.7 of the DSU . On 12 February 2018 , the 
Director -General composed the Panel as follows:  
Chairperson:  Mr Mateo Diego -Fernández  
 
Members:   Mr Stefán H. Jóhannesson  
   Mr Esteban B. Conejos, Jr  
 
1.6.  Austr alia, Brazil, Canada, Ecuador, t he European Union, Guatemala, India, Indonesia, Japan, 
Kazakhstan, the Republ ic of Korea, Norway, the Russia n Federation , Singapore, Chinese Taipei, 
Ukraine,  and Viet  Nam notified their interest in participating in the Panel proceedings as third parties.  
1.3  Panel proceedings  
1.7.  On 5 March 2018, a fter consultation with the parties, the Pa nel adopted its Working Procedures5 
and timetable.  
1.8.  In accordance with the timetable, o n 3 April and 15 May 2018, the United States and China 
respectively submitted their first written submissions . On 29 May  2018, the Panel received 
third-party submissions from Australia, Brazil, Canada, Ecuador, and the European Union.  
1.9.  On 9 and 10 July 2018, t he Panel held its first substantive meeting with the parties. A session 
with the third parties took place on 10 July 2018 , during which Brazil, Ecuador, the European Union, 
Japan, and Ukraine made oral statements . Prior to the substantive meeting, on 2 July  2018, the 
Panel sent the parties a list of  questions  for oral responses at the meeting . Following the meeting , 
on 13 July  2018, the Panel sent written questions to the parties and third parties. On the same date, 
the United States  sent written questions to China . Responses to these questions were received by 
the Panel on 3 August 201 8. 
                                                
1 See WT/DS517/1.  
2 WT/DS517/6.  
3 See WT/DSB/M/401, item 2.  
4 WT/DS517/7/Rev.1.  
5 See the Panel's Working Procedures in Annex A -1. WT/DS517/R  
 
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  1.10.   On 24 August 2018, the parties filed th eir second written submissions to the Panel.  
1.11.   On 16  October 2018, the Panel held its second substantive meeting with the parties. Prior to 
the substantive meeting, on 8 October  2018, the Panel sent the parties a list of  questions  for oral 
responses at the m eeting . Following the meeting, on 19 October 2018, the Panel sent written 
questions to the parties. Responses to those questions were received by the Panel on 
2 November  2018. The Panel gave the parties an opportunity to comment on each other's responses. 
These comments were received by the Panel on 16 November 2018 . 
1.12.   On 30 November 2018 , the Panel issued the descriptive part of its Report to the parties. On 
14 December 2018, the Parties provided their comments  on the descriptive part of the report. On 
15 February 2 019, the Panel issued its Interim Report to the parties. On 6 March 2019 , the parties 
individually requested a review of parts of the Interim Report. The Panel gave the parties an 
opportunity to comment on each other's request for review. These comments we re received by the 
Panel on 20 March 2019 . Following the interim review process, on 3 April 2019 , the Panel  issued its 
Final R eport to the parties .  
2  FACTUAL ASPECT S 
2.1  Measure at issue  
2.1.  In its panel request, t he United States challenges China's administration of its tariff rate quotas 
(TRQs) for wheat, rice, and corn as follows:  
The United States considers that China administers TRQs for wheat, short - and medium - 
grain rice, long grain rice, and corn inconsiste ntly with its WTO obligations. In particular, 
China administers each of its TRQs for wheat, short - and medium - grain rice, long grain 
rice, and corn inconsistently with its commitments specified in paragraph 1.2 of Part I 
of the Protocol on the Accession o f the People's Republic of China (WT/L/432) 
("Accession Protocol"), which incorporates the commitments in paragraph 116 of the 
Report of the Working Party on the Accession of China (WT/MIN(01)/3) ("Working Party 
Report"), as well as with Articles X:3(a), X I:1, and XIII:3(b) of the GATT 1994.  
The legal instruments through which China has established its TRQs for wheat, short - 
and medium - grain rice, long grain rice, and corn include, but are not limited to, the 
following, operating separately or collectively : 
• Customs Law of the People 's Republic of China (adopted at the 19th Meeting of 
the Standing Committee of the Sixth National People 's Congress on 22 January  
1987, amended 28 December  2013, in Order No. 8)  
• Regulation of the People 's Republic of China on the Administration of the Import 
and Export of Goods (Order of the State Council No. 332, adopted at the 46th 
executive meeting of the State Council on 31 October  2001, effective 1 January  
2002)  
• Regulation of the People 's Republic o f China on Import and Export Duties  (State 
Council, Order No. 392, adopted at the 26th executive meeting of the State 
Council on  29 October  2003, amended  6 February  2016, in Order No. 666)  
• Foreign Trade Law of the People 's Republic of China (adopted at the  8th Session 
of the Standing Committee of the Tenth National People's Congress on  6 April  
2004, effective 1 July 2004)  
as well as any amendments, or successor, replacement, or implementing measures.  
The legal instruments through which China administers ea ch of its TRQs for wheat, 
short- and medium - grain rice, long grain rice, and corn include, but are not limited to, 
the following, operating separately or collectively:  WT/DS517/R  
 
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  • Provisional Measures on the Administration of Import Tariff -Rate Quotas for 
Agricultura l Products (Ministry of Commerce and National Development and 
Reform Commission 2003  Order No. 4 , issued 27 September  2003) 
• Public Notice on Authorized Agencies for Agricultural Product Import Tariff -Rate 
Quotas  (Ministry of Commerce and National Developme nt and Reform 
Commission, Public Notice No. 54, issued 15 October  2003)  
• Application Criteria and Allocation Principles for Import Tariff -Rate Quotas for 
Grains in 2017 (National Development and Reform Commission 2016 Public 
Notice No. 23, issued 10 October  2016)  
• Announcement of Applicant Enterprise Data for Import Tariff -Rate Quotas for 
Grains in 2017 (National Development and Reform Commission, issued 
1 December  2016)  
• Public Notice on the Reallocation of Import Tariff -Rate Quotas for Agricultural 
Products in 2017 (National Development and Reform Commission and Ministry 
of Comm erce 2017 Public  Notice No. 11, issued 11 August  2017)  
• Application Criteria and Allocation Principles for Import Tariff -Rate Quotas for 
Grains in 2016 (National Development and Reform Commission 2015 Public 
Notice No. 22, issued 29 September  2015)  
• Announce ment of Applicant Enterprise Data for Import Tariff -Rate Quotas for 
Grains in  2016 (National Development and Reform Commission, issued  4 
December  2015)  
• Public  Notice  on the Reallocation of Import Tariff -Rate Quotas for Agricultural 
Products in 2016  (National Development and Reform Commission and Ministry 
of Commerce 2016 Public Notice No. 19, issued 17 August  2016) . 
as well as any amendments, or successor, replacement, or implementing measur es.6 
2.2  China's system of TRQ administration  for wheat, rice, and corn7 
2.2.  China's TRQ administration operates on a n annual basis . TRQ certificates for wheat, rice, and 
corn are valid and must be used from 1 January to 31  December every year .8 
2.3.  Applicants must apply for TRQ allocations from 15 to 30 October of the year preceding that for 
which TRQ certificates will be issued by the National Development and Reform Commission  of China 
(NDRC ).9 TRQ amounts  are allocated and TRQ certificates are issue d before 1  January  of the year in 
which they have to be used .10 If applicants that receive  TRQ allocations are unable to contract for 
                                                
6 WT/DS517/6, pp. 1 -2. 
7 During  these proceedings, t he two parties submitted several exhibits containing the same legal 
instruments or documents, as well as English translations thereof. The legal instrumen ts or documents which 
we cite in this Report and the exhibits in which they have been submitted by the parties are as follows:  
2003 Provisional Measures  (USA-11, CHN -5); 2003 List of NDRC Authorized Agencies  (USA-13, CHN -6); 
Catalogue of Import State Tradi ng Enterprises (USA -14, CHN -13); 2017 Allocation Notice  (USA-15, CHN -7); 
2016 Allocation Notice  (USA-16, CHN -10); 2017 Reallocation Notice  (USA-17, CHN -9); 2017 Announcement of 
Applicant Enterprise Data  (USA-19, CHN -8); and 2016 Announcement of Enterprise Data (USA-20, CHN -11). 
There  are certain differences in the translations contained in some of those exhibits. In response to questions 
from the Panel in this regard (e.g. Panel question Nos. 12, 18, and 46), the parties provided clarification on 
certain translated terms, where releva nt. Paragraph 6.2 of the Panel's Working Procedures states that "[a]ny 
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 subm ission which contains the translation 
in question". Neither party has raised any such objection. In the interest of brevity and simplicity, and since 
the United States submitted the listed exhibits before China, in our citations in this Report, we refer on ly to the 
exhibits submitted by the United States.  
8 2003 Provisional Measures, (Exhibit US A-11), Article 15.  
9 2003 Provisional Measures, (Exhibit US A-11), Article 10.  
10 2003 Provisional Measures, (Exhibit US A-11), Article 14.  WT/DS517/R  
 
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  importation , or have contracted but are unable to complete importation , under their allocated TRQ 
amounts , they must return  such unused TRQ amounts  by 15 September  of that year .11 Returned 
TRQ amounts  are made available for reallocation. Applicants must apply for TRQ reallocations from 
1 to 15 September12 and the NDRC makes the reallocations before 30 September.13 
2.4.  Below, the various stages and aspects of China's TRQ administration are described in further 
detail.  
2.2.1   Initial allocation of TRQ amounts  
2.5.  The NDRC, in conjunction with the Ministry of Commerce of China (MOFCOM), is the authority 
responsible for allocating TRQ amounts  for wheat,  rice, and  corn.14 The application period is from 15 
to 30  October of the year preceding that for which TRQ certificates will be issued.15 
2.6.  In accordance with the 2003 Provisional Measures, the NDRC issues annual  allocation notices 
one month before th e application period for TRQs in the International Business Daily, the China 
Economic Herald, and on MOFCOM's and the NDRC's website s.16 The annual a llocation notices 
generally have similar content and follow the same structure.17 They set out , among other t hings , 
total TRQ amounts  available  for each type of grain and the portions thereof reserved for importation 
through state trading enterprises (STEs) , application criteria, application  period, allocation 
principles, and other requirements.  Below, we describe the process of allocation of TRQ amounts  by 
the NDRC.  
2.2.1.1   Announcement  of TRQ amounts  available for allocation  
2.7.  The annual allocation notice s set out the  total TRQ amounts  that are  available for allocation  in 
any given  year, as well as the  portions thereof reserved for importation through STEs . For instance, 
the TRQ  amounts  available for allocation in  2017 were as follows:  
The 2017 grain import tariff -rate quota quantities are: wheat – 9.636 million tons, with 
a state trading proportion of 90 %; corn – 7.20 million tons, with a state trading 
proportion of 60%; [] rice – 5.32 million tons (of which: 2.66 million tons of long -grain 
rice and 2.66 million tons of medium - and short -grain rice), with a state trading 
proportion of 50%.18 
2.2.1.2   Application criteria  
2.8.  Applicants must  meet the application criteria set out in the annual allocation notices to be 
eligible to receive TRQ allocations . The annual allocation notice s divide the se criteria into two:  basic 
eligibility criteria and grain -specific eligibili ty criteria. Possession of the b asic eligibility criteria  is "a 
prerequisite" for eligibility.19 Applicants must also meet  one of the grain-specific eligibility criteria  
corresponding to the type of grain in respect of which they applied for a TRQ allocatio n.20 
                                                
11 2003 Provisional Measures,  (Exhibit US A-11), Article 23; and 2017 Reallocation Notice, 
(Exhibit  USA-17), para. 1.  
12 2003 Provisional Measures, (Exhibit US A-11), Article 24.  
13 2003 Provisional Measures, (Exhibit US A-11), Article 26.  
14 2003 Provisional Measures, (Exhibit US A-11), Article 7.  
15 2003 Provisional Measures, (Exhibit US A-11), Article 10.  
16 2003 Provisional Measures, (Exhibit USA -11), Article 10.  
17 Although some differences exist in the texts of the various allocation notices issued each year, the 
2017 Allocation Notice was the instrument in force at the time of the Panel 's establishment and both parties 
use the 2017 Allocation Notice as a basis for t heir arguments. We therefore also refer to this Notice in our 
description of China's TRQ administration system and in our assessment of the parties' claims and arguments.  
18 2017 Allocation Notice, (Exhibit US A-15), Article I. The English translation of China's legal instruments 
provided by the United States refers to "white rice". However, in response to questioning from the Panel, both 
parties agreed that this refers to "rice" in general. (United States' response to Panel question No. 18( a), 
para. 48; and China's response to Panel question No. 18(a), para. 58). We therefore use the term "rice" 
throughout the remainder of this Report.  
19 2017 Allocation Notice, (Exhibit US A-15), Article II.  
20 2017 Allocation Notice, (Exhibit US A-15), Article  II. WT/DS517/R  
 
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  2.9.  In the 2017 Allocation Notice, t he basic eligibility criteria were set out as follows:  
Having registered with the industry and commerce administrative departments prior to 
October 1, 2016; possessing a good financial  condition, [good] taxpayer record, and a 
[good] integrity situation; as of 2015, no record of violating regulations with respect to 
customs, industry and commerce, taxation, credit and loans, inspection and quarantine, 
grain distribution, environmental protection, and other areas; not havin g been placed 
on a "Credit China " website blacklist [of entities] receiving punishment; having fulfilled 
social responsibilities associated with [their] operations; having no conduct in violation 
of the Provisional Measures for the Administration of Import Tariff -Rate Quotas for 
Agricultural Products .21 
2.10.   China states  that, in practice, the NDRC does not conduct an individual assessment of each 
of the se basic eligibility  criteria. Rather, the uniform social credit  code that is provided by each 
applicant in its application form is used to ge nerate a credit report through Credit China.22 Credit 
China is  managed by the ND RC, and is connected to databases of dozens of government agencies .23 
China  adds that , while the credit report is generated using  all of the information available through 
Credit China , the NDRC only uses Credit China's "blacklist" of entities with a record of violation  to 
determine applicants' eligibility .24 Although entities are placed on Credit Chin a's blacklist for having  
a record of violation  in a range of areas, China states that only records of violations of "industry and 
commerce registration, tax payments, customs, and [] court judgements"25 within the previous two 
years26 will render applicants ineligible  to receive TRQ allocations . 
2.11.   China  further states that the NDRC determines  an applicant 's eligibility to receive TRQ 
allocations not only by checking Credit China's blacklist, but also by checking (i) whether the 
applicant has a ttested to the acc uracy of the information submitted  in its application ; and 
(ii) whether the applicant has  prior violations of the 2003 Provisional Measures .27 
2.12.   In the 2017 Allocation Notice, t he grain -specific eligibility criteria were as follows:  
(1) Wheat  
1. State trading enterprise;  
2. Enterprise with actual import performance (not including imports through agents) in 
2016;  
3. Flour production enterprise with wheat usage of more than 100,000 tons in 2015 or 
2016;  
4. Food production enterprise with flour usage of mo re than 50,000 tons in 2015 or 
2016;  
5. Enterprise without actual import performance in 2016 but which possesses 
import -export operating rights and certification of its 2016 annual processing trade 
enterprise operating conditions and production capacity, i ssued by the department of 
commerce at its location, and which engages in processing trade using wheat or flour 
as the raw material.  
(2) Corn  
1. State trading enterprise;  
2. Enterprise with actual import performance (not including imports through agents) in 
2016;  
                                                
21 2017 Allocation Notice, (Exhibit US A-15), Article II. (emphasis original)  
22 China's first written submission, para. 14.  
23 China's first written submission, para. 14.  
24 China's responses to Panel question No. 8(c), para. 24, and No. 47, para. 8.  
25 China's response to Panel question No. 48, para. 9.  
26 China's  response to Panel question No. 49, para. 11 . 
27 China's response to Panel question No. 47, para. 8. See also China's first written submission, 
para. 35. WT/DS517/R  
 
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  3. Feed production enterprise with corn usage of more than 50,000 tons in 2015 or 
2016;  
4. Other production enterprise with corn usage of more than 150,000 tons in 2015 or 
2016;  
5. Enterprise without actual import performance in 2016 but w hich possesses import -
export operating rights and certification of its 2016 annual processing trade enterprise 
operating conditions and production capacity, issued by the department of commerce 
at its location, and which engages in processing trade using c orn as the raw material.  
(3) [] rice (separate  applications are required for long -grain rice and medium - and 
short-grain rice)  
1. State trading enterprise;  
2. Enterprise with actual import performance (not including imports through agents) in 
2016;  
3. Grai n enterprise possessing grain wholesale and retail qualifications, with a [] rice 
sales value of more than CNY 100 million in 2015 or 2016;  
4. Food production enterprise with [] rice usage of more than 50,000 tons in 2015 or 
2016;  
5. Enterprise without act ual import performance in 2016 but which possesses import -
export operating rights and certification of its 2016 annual processing trade enterprise 
operating conditions and production capacity, issued by the department of commerce 
at its location, and which  engages in processing trade using [] rice as the raw material.28 
2.2.1.3   Application process  
2.13.   The application period for wheat, rice, and corn TRQs  is from 15 to 30 October of the year 
preceding that for which TRQ certificates will be issued .29 
2.14.   The annual allocation  notices include, as annexes, an application form  that requires  applicants 
to provide information regarding , among other  things , the nature of the ownership of the enterprise, 
registered capital, tax payments,  asset-liability ratio, and import and sales performance as well as 
production and operation capacity for the first or second  year preceding the one for which the 
application is made .30 
2.15.   The application form also requires an applicant to commit to:  
Guarantee its conformity wi th the grain impo rt tariff -rate quota application criteria 
stipulated by the government, guarantee ing the authenticity, accuracy, and 
completeness of the application form; having obtained the grain import tariff -rate 
quota, guarantee that grain import business activities w ill be carried out according to 
relevant government laws, regulations, and provisions.31 
2.16.   Group en terprises applying for wheat or  corn TRQ allocations must " independently apply … in 
the name of each processing plant ".32 Group enterprises applying for rice TRQ  allocations " may 
choose to apply in the name of the group headquarters or a subsidiary enterprise, but the 
headquarters and the subsidiary enterprise must not apply at the same time ".33 
                                                
28 2017 Allocation Notice, (Exhibit US A-15), Article II.  
29 2003 Provisional Measures, (Exhibit US A-11), Article 10.  
30 2017 Allocation Notice, (Exhibit USA -15), Annex:  2017 Grain Import Tariff -Rate Quota Application 
Form.  
31 2017 Allocation Notice, (Exhibit USA -15), Annex: 2017 Grain Import Tariff -Rate Quota Application 
Form.  
32 2017 Allocation Notice, (Exhibit US A-15), Article II.  
33 2017 Allocation Notice, (Exhibit US A-15), Article II.  WT/DS517/R  
 
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  2.17.   Applications for TRQ allocations for wheat, rice, and corn are submitt ed to agencies duly 
authorized by the NDRC.34 The NDRC  has authorized 37 local agencies  to accept applications from 
enterprises within their territories.35 These local agencies  are responsible for the following tasks:  
(1) To accept applicants' applications and forward them to the Ministry of Commerce or 
NDRC;  
(2) To accept inquiries and convey them to the Ministry of Commerce or NDRC;  
(3) To inform applicants of any part of their applications that do not meet the 
requirements, and remind them of their revisions; [and]  
(4) To issue an Agricultural Product Import Tariff -Rate Quota Certificate to approved 
applicants.36 
2.18.   The NDRC's local agencies  "in accordance with the criteria announced, accept the applications 
and relate d materials submitted by the applicants for wheat, corn, [] rice, and cotton, and transmit 
the applications to NDRC for approval prior to November 30, concurrently submitting a copy to the 
Ministry of Commerce".37 
2.2.1.4   Allocation  principles  
2.19.   The TRQ amounts allocated to eligible applicants  are determined  by the NDRC. The  2003 
Provisional Measures provide for two methods for determining the TRQ allocation amounts , namely , 
allocation " in accordance with the applicants' number of applications, past actua l import 
performance, production capacity, and other relevant commercial standards ", or allocation " based 
on a first -come first -served method ".38 The initial allocation of TRQ amounts  is made solely on the 
basis of the former method , also referred to as "al location principles" in the annual allocation 
notices .39 
2.20.   The 2017 Allocation Notice sets out the allocation principles as follows : 
The aforementioned grain import tariff -rate quotas will be allocated in accordance with  
applicants ' actual production and operating capacities (including historical production 
and processing, actual import performance, and operating situation, etc.) and other 
relevant  commercial standards.40 
2.21.   China states that, in practice, applicant s' actual import perfo rmance  under previously 
allocated TRQ  amount s is "the fac tor given the most weight in  NDRC's allocation analysis "41, and 
that "[n]ew applicants  are only considered in the event that the entire non -STE portion of the TRQs 
is not fully allocated to applicants  with historic import performance", in which case "information 
concerning production capacity is a key factor ".42 
2.2.1.5   Public comment process  
2.22.   After receiving the applications from the NDRC's local  agencies  by 30 November , the NDRC 
publishes on its website a  so-called announcement of applicant enterprise d ata, which includes a  list 
                                                
34 2003 Provisional Measures, (Exhibit US A-11), Article 11; 2017 Allocation Notice, (Exhibit US A-15), 
Article III.  
35 2003 List of NDRC Authorized Agencies, (Exhibit US A-13). 
36 2003 Provisional Measures, (Exhibit US A-11), Article  8. (emphasis original)  
37 2003 Provisional Measures, (Exhibit US A-11), Article  12. See also 2017 Allocation Notice, 
(Exhibit  USA-15), Article  III. 
38 2003 Provisional Measures, (Exhibit US A-11), Article  13. 
39 China's response to Panel question No. 52(a), para. 14. See also United States' first written 
submission, para. 28; and China's first written submission, para. 16 (referring to 2017 Allocat ion Notice, 
(Exhibit USA -15), Article IV).  
40 2017 Allocation Notice, (Exhibit USA -15), Article IV.  
41 China's first written submission, para. 49.  See also China's response to Panel question No. 52, 
para. 13. 
42 China's first written submission, para. 50.  WT/DS517/R  
 
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  of TRQ applican ts together with relevant  data submitted by each applicant .43 The period during which 
the list of applicants and applicants' data will be available online i s specified on the NDRC's website.44 
2.23.   Within that period,  the public  is invited  to provide "feedbac k with relevant  opinion s" if they 
are "in disagreement with the data reported by the enterprises" .45 The public comments are taken 
into account by the NDRC in d etermining applicants' eligibility to receive TRQ allocations and in 
determining the TRQ amounts allocated to individual applicants.46 
2.24.   China states that the NDRC , in practice,  verifies comme nts received from the pu blic and  
provide s applicants an opportunity  to rebut any such comments .47 China also states that NDRC will 
only take into account verified public comments relating to "the violation records of an applicant in 
the areas of industry and commerce registration, tax payments, customs, compliance with cou rt 
judgements, and compliance with the 2003 Provisional Measures" and "data concerning the actual 
import performance and the historical processing capacity of the applicant ".48 
2.2.2   Rules and requirements for allocated TRQ amounts  
2.25.   Once the application process is complete, the NDRC, through its local agencies , informs 
applicants of the results of their applications and issues the TRQ certificates.49 
2.26.   Applicants that  receive TRQ allocations are called end-users50 and must comply with sev eral 
rules and requirements when importing grains under TRQs allocated to them  and when using grains 
imported under their TRQ allocations . The rules and requirements vary depending on the type of 
TRQ, grain, and enterprise involved and are described in fur ther detail below.  
2.2.2.1   STE and non -STE portions of TRQs  
2.27.   Article 4 of the 2003 Provisional Measure s divide s TRQs into STE and non -STE portions51, and 
requires STE portions  to be indicated in TRQ certificates.52 STE portions of TRQs  must be imported 
through STEs, and non -STE portions of TRQs  must be imported through enterprises that have trading 
rights  or, if the end-user has  trading rights, by the end -user itself.53 
2.28.   Article 38 of the 2003 Provisional Measures defines STEs as:  
[E]nter prises conferred by the government with privileges in the exclusive import 
business of certain products. The list of state trading enterprises is verified, determined, 
and announced by the Ministry of Commerce.54 
                                                
43 2017 Allocation Notice, (Exhibit USA -15), Article III; and 2017 Announcement of Applicant Enterprise 
Data, (Exhibit USA -19). 
44 In the allocation process for 2017, this period was from 1 December to 14 December. ( 2017 
Announcement of Applicant Enterprise Dat a, (Exhibit US A-19)). 
45 2017 Announcement of Applicant Enterprise Data, (Exhibit US A-19). 
46 United States' first written submission, paras. 93 -95; and China's responses to Panel question 
Nos. 55(a) paras. 21-23, 55(c), para. 25, and 55(e), para.  27. 
47 China's first written submission, para. 114; and response to Panel question No. 9(c), para. 30.  
48 China's response to Panel question No. 55(a), para. 23.  (emphasis omitted)  
49 2003 Provisional Measures, (Exhibit US A-11), Article 14.  
50 Article 39 of the 2003 Provisional Measures defines "end -users" as follows:  
[M]anufacturing enterprises, traders, wholesalers, retailers, etc. that directly apply for and obtain 
agricultural product import tariff -rate quotas. ( 2003 Provisional Measures, ( Exhibit US A-11), 
Article  39). 
For ease of reference, throughout this Report, we use the term "recipient" in referring to end -users 
within the meaning of this provision.  
51 2003 Provisional Measures, Article 4  (Exhibit US A-11). See also 2017 Allocation Notic e, (Exhibit US A-
15), Article I.  
52 2003 Provisional Measure s, (Exhibit USA -11), Article 14 . 
53 2003 Provisional Measures, (Exhibit US A-11), Article 4.  Although this was not the case when the 
2003 Provisional Measures were adopted, China explains that all ent erprises in China now have trading rights, 
which are granted automatically upon registration. (China's response to Panel question No. 1(e), para. 6). We 
therefore do not address or refer to "trading rights" in this Report.  
54 2003 Provisional Measures, (Exh ibit US A-11), Article  38. WT/DS517/R  
 
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  The National Cereals, Oils and Foodstuffs Im port and Export Corporation ( COFCO ) is the only STE 
for grains designated by the Ministry of Commerce .55 
2.29.   According to Article 22 of the 2003 Provisional Measures, i f an end -user that receives an STE 
portion of a TRQ is unable to sign a contract through an S TE (i.e. COFCO) prior to 15 August, the 
end-user may, "upon seeking appr oval" from MOFCOM or the NDRC, entrust any enterprises to 
import or import by itself.56 
2.30.   China states  that while the NDRC is not legally prevented from allocating STE portions of TRQ s 
to non -STE applicants , in practice, it allocate s the entire  STE portion s of wheat, rice, and corn  TRQs 
to COFCO .57 China  further  states that the entire STE portion of each TRQ is allocated to COFCO 
without applying the basic eligibility criteria and allocat ion principles  described in sections  2.2.1.2  
and 2.2.1.4  above58, and tha t the obligation to re turn unused TRQ amounts  and the penalties  for 
their non-use, described in section 2.2.2.3  below, also do not apply to COFCO.59 
2.2.2.2   Usage  requirements  for wheat, rice, and corn imported under TRQ allocations  
2.31.   TRQ amounts  allocated to a n enterprise  must be "self-used", and imported goods must be 
"operated for processing " by the  enterprise  itself.60 The 2017 Allocation Notice specifies that:  
Among these [goods], imported wheat and corn are required to be processed and used 
in [the enterprise's]  own plant; imported [] rice is r equired to be organized for sale in 
the name of the enterprise  itself.61 
2.32.   As noted in paragraph 2.16 above, group enterprises that own multiple processing plants 
must independently apply for  wheat and corn TRQ  allocations  in the name of each processing plant , 
and independently process wheat and corn imported under TRQ allocations in each processing 
plant.62 Group  enterprises applying for rice TRQ allocations  may choose to apply in the name of the 
group headquarter s or a subsidiary enterprise, but the headquarter s and the subsidiary enterprise s 
must not apply at the same time63, and the rice must be organized for sale in the name of the entity 
that files the application .64 
2.33.   China states that, while the processing requirement s for wheat and corn imported under TRQ 
allocations apply  in all circumstan ces, the NDRC does not "monitor whether recipients comply with 
the processing requirement on a daily basis" and that the NDRC, in the event it "were to become 
aware of a situation in which a recipient had transferred its [unprocessed] grains to another ent ity", 
would "evaluate, on a case -by-case basis, whether the recipient should be subject to a penalty in 
the form of a reduced allocation in the following year ".65 If the recipient is found to have been 
"unable to process its full allocation for unexpected r easons", the NDRC would, according to China, 
not subject that recipient to a penalty.66 China further points out that the NDRC has "not yet" 
encountered a situation where a TRQ recipient has transferred unprocessed wheat or corn  to other 
entities .67 
2.2.2.3   Return o f unused TRQ amounts  and penalties for their non-use 
2.34.   TRQ certificates for wheat, rice, and corn are valid and must be used from 1 January to 
31 December of the year for which they are issued .68 An end -user must return unused  TRQ amounts 
                                                
55 Catalogue of Import State Trading Enterprises, (Exhibit USA -14). See also China's first written 
submission, para. 9; and United  States' first written submission, para. 19.  
56 2003 Provisional Measures (Exhibit USA -11), Article 22 . 
57 China's first written submission, para. 9.  
58 China's responses to Panel question No. 6, para. 19, and No. 63, para. 44.  
59 China's response to Panel question No. 6, para. 20.  
60 2017 Allocation Notice, (Exhibit US A-15), Article V(2).  
61 2017 Allocation No tice, (Exhibit US A-15), Article V(2).  
62 2017 Allocation Notice, (Exhibit USA -15), Article II.  
63 2017 Allocation Notice, (Exhibit US A-15), Article II.  
64 China's response to Panel question No. 59(c), para. 39.  
65 China's response to Panel question No. 57(a), para. 29.  
66 China's response to Panel question No. 57(a), para. 29.  
67 China's response to Panel question No. 57, para. 29.  
68 2003 Provisional Measures, (Exhibit US A-11), Article 15.  WT/DS517/R  
 
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  to the original certificate -issuing agency by  15 September of that year . In this regard , the 2003 
Provisional Measures state that : 
In the event that an end -user holding an agricultural product import tariff -rate quota is 
unable to sign import contracts for, or ha s already signed import contracts for but is 
unable to complete, the entire quota quantity already applied for and obtained for the 
current year, [the end -user] must return the quota quantity it was unable to complete 
to the original certificate -issuing ag ency prior to September 15 .69 
2.35.   Article 3 0 of the 2003 Provisional Measures imposes penalties in the form of deductions to 
the TRQ allocation s in the following year for  end-users that f ail to return  unused TRQ amounts  by 
15 September. More particularly , it st ates that : 
In the event that an end -user, in violation of the provisions in Article 23 of these 
Measures, fails to complete imports for the entire agricultural import tariff -rate quota 
quantity allocated during the current year, and also fails to return to  the original 
certificate -issuing agency by September 15 the quota quantity it failed to import during 
the current year, there will be a corresponding deduction to its tariff -rate quota quantity 
allocated in the following year, according to the proportion not completed .70 
2.36.   Article 3 1 imposes penalties  in the form of deductions to the TRQ allocation s in the following 
year for end -users that are unable to complete importation under TRQs for two consecutive years  
even if they comply with the obligation to return unused amounts . More particularly , it states that :   
In the event that an end -user fails to complete imports for the entire agricultural import 
tariff-rate quota quantity allocated for two consecutive years, but has returned to the 
original certificate -issuing agency by September 15 the quota quantity that it failed to 
utilize during the current year, there will be a corresponding deduction to its tariff -rate 
quota quantity allocated in the following year, according to its proportion not completed 
in the most recent year .71 
2.2.3   Reallocation o f returned  TRQ amount s 
2.37.   As described in section 2.2.2.3  above, an end -user must return unused TRQ amounts  by 
15 September of the year for which they are issued , in which case they are reallocated by the NDRC 
in conjunction wi th MOFCOM . The application period for TRQs available for reallocation is from 1  to 
15 September of the same year.72 End-users that have fully utiliz ed their TRQ  allocations  prior to 
the end of August, as well as new users that meet the application criteria in the allocation notice but 
did not apply during the original  allocation  process , are eligible to apply for reallocation.73 
2.38.   One month before the application  period  for reallocation , the NDRC issues a reallocation notice  
in the International Business Daily, the China  Economic Herald , and on MOFCOM's and the NDRC's  
website s, which sets out the application criteria for reallocation.74 
2.39.   The 2003 Provisional Measures and the annual reallocation notices  set out the method for 
realloca ting returned TRQ amounts . The 2003 Provisional Measures  state, in relevant part : 
Tariff-rate quota reallocated quantities are allocated in accordance with the application 
criteria promulgated and according to the first -come -first-served method. The minimu m 
quota quantity is determined using the commercially viable shipping quantities for each 
type of agricultural product.75 
                                                
69 2003 Provisional Measures, (Exhibit US A-11), Article 23 . See also  2017 Reallocation Notice, (Exhibit 
USA-17), para. 1.  
70 2003 Provisional Measures, (Exhibit US A-11), Article 30. (emphasis  omitted)  
71 2003 Provisional Measures, (Exhibit US A-11), Article 31.  
72 2003 Provisional Measures, (Exhibit US A-11), Article 24.  
73 2003 Provisional Measures, (Exhibit US A-11), Article 25. See also 2017 Reallocation Notice, (Exhibit 
USA-17), para. 2.  
74 2003 Provisional Measures, (Exhibit US A-11), Article 24.  
75 2003 Provisional Measures, (Exhibit US A-11), Article 26.  WT/DS517/R  
 
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  2.40.   The 2017 Reallocation Notice  states  that: 
The National Development and Reform Commission and the Ministry of Commerce will 
carry out re allocation of quotas returned by users according to the order in which 
applications were submitted online. Before October 1, the tariff -rate quota reallocation 
results will be notified to the end -users.  
When the number of applications that meet the criteri a, in total, is smaller than the 
reallocated tariff -rate quota quantity, every applicant 's application can be satisfied; 
when the number of applications that meet the criteria, in total, is larger than the 
reallocated tariff -rate quota quantity, reallocati on will be carried out according to the 
Allocation Principles and the Allocation Rules.76 
2.41.   China states that the NDRC, in practice, reallocates returned TRQ  amount s based on the first -
come, first -served method, and that the allocation principles used during the initial allocation process 
do not apply  to the reallocation process .77 
2.42.   Reallocation notice s include, as annexes, an application form, which is similar to that  used for 
the initial allocation  process .78 Applications for reallocat ion of  returned TRQ amounts  may be 
submitted to the NDRC's local agencies .79 
2.43.   According to the 2017 Reallocation Notice , from 1 September of each year, t he NDRC's local  
agencies  "carry out reporting of the applications that meet the criteria via an agricultural product 
import tariff -rate quota computerized management system". This Notice also states that, before 
20 September, the local agencies  "report these up in writing " to the NDRC .80 
2.44.   The 2003 Provisional Measures direct the NDRC to reallocate returned TRQ amounts  before 
30 September.81 They also state that applicants that receive a reallocation may import by 
themselves or through other enter prises.82 
3  PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  
3.1.   The Unite d States  requests that the Panel find that China's administration of its wheat, rice, 
and corn TRQs is inconsistent with China 's obligations under Paragraph 116 of the Report of the 
Workin g Party on the Accession of China (WT/MIN(01)/3) ( China's Working Party Report), as well 
as with Articles X:3(a), XI:1, and XIII:3(b) of the GATT 1994. The United  States  further requests, 
pursuant to Article 19.1 of the DSU, that the Panel recommend that China  bring its measure into 
conformity with its WTO obligations.83 
3.2.  China  requests that the Panel reject the United States ' claims .84 
4  ARGUMENTS OF THE PAR TIES  
4.1.  The arguments  of the parties are reflected in their executive summaries, provided to the Panel 
in accordance with paragraph 22 of the Working Procedures adopted by the Pan el (see Annexes B -1 
and B -2). 
5  ARGUMENTS OF THE THIRD  PARTIES  
5.1.  The arguments of Australia, Brazil, C anada, Ecuador, the European Union, Japan, and Ukraine  
are reflected in their executive summaries, provided in accordance with paragraph 25 of the Working 
                                                
76 2017 Reallocation  Notice, (Exhibit US A-17), para. 5. (emphasis omitted)  
77 China's response to Panel question No. 52(b), para. 15.  
78 2017 Reallocation Notice, (Exhibit US A-17), Annex 1: 2017 Grain Import Tariff -Rate Quota 
Reallocation Application Form.  
79 2003 Provisional Me asures (Exhibit USA -11), Article 24.  
80 2017 Reallocation Notice, (Exhibit US A-17), para. 4.  
81 2003 Provisional Measures, (Exhibit US A-11), Article 26.  
82 2003 Provisional Measures, (Exhibit US A-11), Article 26.  
83 See WT/DS517/6; and United States' first written submission, para. 309.  
84 See China's first written submission, para. 157.  WT/DS517/R  
 
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  Procedures adopted by the Panel ( see Annexes C -1, C-2, C-3, C-4, C-5, C-6, and C -7). Guatemala, 
India, Indonesia, Kazakhstan,  the Republic of  Korea, Norway, the Russia n Federation , Singapore, 
Chinese Taipei, an d Viet  Nam did not submit written or oral arguments to the Panel . 
6  INTERIM RE VIEW  
6.1.  On 15 February 2019, the Panel issued its Interim Report to the parties. On 6 March 2019, 
China and the United States each submitted written requests for the Panel to review aspects of the 
Interim Report. On 20 March 2019, both parties submitted comments o n the other's requests for 
review. Neither party requested an interim review meeting.  
6.2.  In accordance with Article 15.3 of the DSU, this section of the Report sets out the Panel's 
response to the parties' requests made at the interim review stage. The number ing of some of the 
footnotes in the Final Report has changed from the numbering in the Interim Report. The discussion 
below refers to the numbering in the Final Report and, where it differs, includes the corresponding 
numbering in the Interim Report.  
6.3.  The p arties' requests for substantive modifications are discussed below. In addition to the 
requests discussed below, corrections were made for typographical and other non -substantive errors 
in the Report, including those identified by the parties.  
6.1  Factual aspe cts 
6.4.  The United States requests that we modify our description of the application form annexed to 
the 2017  Allocation Notice in paragraph 2.14. First, t he United States requests that we clarify that 
the form requires information regarding the "nature" rather than the "ownership" of the applicant . 
Second, the United States requests that we clarify that an applicant can s ubmit information for the 
first or second year preceding the one for which the application is made .85 The United States submits 
the same two requests in relation to paragraphs  7.32 and 7.36.86 China does not oppose either 
request but asks that we disregard certain parts of the reasoning provided by the United States in 
support of it s first request . More particularly, China asks that we disregard the United States' 
argument that information regarding the "nature" of the applicant "requires an indication of whether 
the enterprise is a state asset or private enterprise" .87 In light of th e text of the application form, 
and the views expressed by both parties, we have modified paragraphs 2.14, 7.32, and 7.36 by 
referring to the "nature of the ownership"  rather than the "ownership"  of the applicant  and by 
clarifying that applicants can submit information for the first or second year preceding the one for 
which the application is made.  
6.2  Claims under Paragraph 116 of China's Working Party Report  
6.5.  The United States requests that the term "challenged measure" be replaced with "challenged 
measures" in  paragraph  7.1 because the United States included several legal instruments in  its 
panel request , and China's TRQ administration comprise s numerous aspects.88 The United  States 
submits the same or similar requests in relation to paragraphs  7.11, 7.12, 7.13, 7.14, 7.15, and 
7.162 .89 China opposes t he United States'  request, arguing that the United States' panel request 
identified "a singular 'measure' consisting of China's administration  of its TRQs" and distinguished 
this from "the 'legal instruments through which  China has established its TRQs for wheat, short - and 
medium - grain rice, long grain rice, and corn' ".90 We agree that the challenge d measure is China's 
administration of its wheat, rice, and corn TRQs which , as we explain below, covers  the legal 
instruments and acts of the relevant authorities that implement , or put into practical effect,  China's 
TRQs.91 Our understanding of China's administration of its  wheat, rice, and corn TRQs therefore 
covers all the legal instruments identified in the United States' panel request. We therefore do not 
                                                
85 United States' request for review of the Interim Report, para. 13.  
86 United States' request for review of the Interim Report, para . 13. 
87 China's comments on the United States' request for review of the Interim Report, para. 8 (quoting the 
United States' request for review of the Interim Report, para. 13).  
88 United States' request for review of the Interim Report, para. 3.  
89 United S tates' request for review of the Interim Report, paras. 6, 7, 9, 10, 11, 12, and 21.  
90 China's comments on the United States' request for review of the Interim Report, para. 1 (quoting 
WT/DS517/6 ). (emphasis added by China ) See also ibid. paras. 2, 3, 4, 5 , 6, 7, and 12.  
91 See para. 7.7 below.  WT/DS517/R  
 
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  consider it accurate or appropriate to refer to  "challenged measur es" in the plural, and thus reject 
the United States' request. We have, however, made textual modifications to certain paragraphs , 
including those  identified by the United States, in order to clarify that the challenged measure is 
China' s administration  of its wheat, rice, and corn  TRQs. 
6.6.  The United States requests that  we refer to "the customary rules of interpretation of public 
international law " reflected in Articles 31 through 33 of the Vienna Convention on the Law of Treaties 
in paragraph 7.5 rather than to the provisions of the Convention themselves. In the United  States'  
view, this would better reflect  the fact that the United  States is not a party to th e Convention .92 
China has not commented on  this request. We consider the United States' proposed modifi cation 
useful and have adjusted the text of paragraph 7.5 accordingly.  
6.7.  The United States requests that we  refer to the 1993  version , rather than the 2007 version , of 
the Shorter Oxford English Dictionary in setting out our understanding of the ordinary meaning of 
certain terms in Paragraph 116 of China's Working Party Report, and asks that we modify 
footnotes  135 through 140 to paragraph 7.9 (footnotes 96  through 101 to paragraph 7.9 of the 
Interim Report) accor dingly.93 China has not commented on this request. We note that both versions 
of the Shorter Oxford English Dictionary  contain identical definitions for the terms at issue. We 
therefore do not consider it useful to make the requested modifications, and reject the United  States' 
reques t. 
6.8.  The United States requests that we modify our description of the structure of China's 
arguments, in paragraph 7.12, in order to reflect the fact that China did not address all of the 
United States' claims  in its first written submission.94 China opposes the United States' request, 
arguing that it addressed a ll of the United States' claims at the Panel's first meeting with the parties 
and in its subsequent submissions.95 We have slightly modified the text of paragraph  7.12 in order 
to accommodate both parties' arguments.  
6.9.  The United States requests that we  remove the characterization , in the first sentence of  
paragraph 7.13, of its claims  under Paragraph 116 of China's Working Party Report as 
"intertwined", and rather indicate that "the United States in certain instances offers the same 
evidence in support of separate claims ".96 China has not commented on this request. In our view, 
the characterization of the United States' c laims as intertwined  is accurate , regardless of whether 
this intertwined nature stems from the United States' reliance on "the same evidence in support of 
separate claims" . We do not consider it necessary or useful to modify t he text of  paragraph  7.13, 
and thus reject the United  States' request.  
6.10.   The United States requests that we modify the fifth sentence of  paragraph 7.13, which  
describe s the Panel's approach in analysing the United States' claims under Paragrap h 116 of China's 
Working Party Report , in order to indicate that the obligations under Paragraph 116 are legally 
independent.  More particularly, the United States request s that we not describe our holistic 
assessment  of the compatibility of China's TR Q administration as "synthesizing our intermediate 
analyses" regarding the individual aspects of the measure , but rather as being "in addition to our 
analyses" regarding the individual aspects of the measure.97 The United States submits the same 
request in relation to the fifth sentence of paragraph 7.162 .98 China has not commented on  this 
request. We agree that our analyses of the indivi dual aspects of China's TRQ administration  should 
not be viewed as intermediate. We have therefore removed this term from paragraphs  7.13 and 
7.162 , but have not found it necessary or useful to make further modifications.  
6.11.   China requests that we  modify  the description in paragraph 7.4499 of the NDRC's practice in 
determining an applicant 's eligibility to receive TR Q allocations , in order  to better reflect China's 
explanatio n that t he NDRC, in practice, generates an applicant's credit report through Credit China 
                                                
92 United States' request for review of the Interim Report, para. 4.  
93 United States' request for review of the Interim Report, p ara. 5.  
94 United States' request for review of the Interim Report, para. 7.  
95 China's comments on the United States' request for review of the Interim Report, para. 3.  
96 United States' request for review of the Interim Report, para. 8.  
97 United States' req uest for review of the Interim Report, para. 10.  
98 United States' request for review of the Interim Report, para. 21.  
99 In its request for review of the Interim Report, China refers to paragraph 7.4 rather than 
paragraph  7.44 (China's request for review of the Interim Report, p. 2). This appears to be a typographical 
error, and we have not made any modifications to paragraph 7.4 of our Report.  WT/DS517/R  
 
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  by using the applicant's uniform social credit code.100 The United  States does not oppose China's 
request but asks that we clarify that this description is based on China's exp lanation of the NDRC's 
practice.101 We consider China's suggested modification, and the United States'  suggested 
clarification, accurate and useful, and have adjusted the text of paragraph 7.44 accordingly . 
6.12.   The United States requests that we revise our finding in paragraph 7.61 that it is sufficient 
for China to list the factors that the NDRC will take into account in allocating TRQ amounts and that 
Paragraph 116 of China's Working Party Report does not require China to specify how the NDRC will 
evaluate the se factor s and what weight it will accord to them. In the United States'  view, this finding 
is inconsistent with the Panel's understanding of the meaning and nature of the obligations under 
Paragraph 116, as well as  with the Panel's  findings in paragraphs 7.69 and 7.84 on certain other 
aspect s of China's TRQ administration.102 China opposes the United States' request, arguing that the 
Panel "properly … concluded that the United  States' proposed standard was overly stringent" and 
that there are no inconsistencies in the Panel's findings.103 We note  that interim review provides 
parties an opportunity to request the Panel "to review precise aspects of the interim report"104 and 
is not an appropriate stage for the parties to raise new arguments or to re -argue their case on the 
basis of arguments already put before the Panel.105 Further, we do not consider that our finding in 
paragraph 7.61 is inconsistent with any other finding in our Rep ort. We therefore reject the 
United  States' request that we revise our finding in paragraph 7.61. We have nonetheless  modified 
paragraphs 7.69, 7.82, and 7.84, in order to clarify that there are no inconsistenc ies in our findings 
on different aspects of China's TRQ administration.  
6.13.   China requests that we modify the description in paragraph 7.77 of the public comment 
process, by clarifying that the NDRC only publishes "certain" information submitted by applicants in 
their TRQ applications.106 The United  States does not oppose China's req uest but asks  us to add that 
this description is based on China's explanation.107 We find China's suggest ion useful,  but consider 
it more accurate to use the term  "relevant" as this is the term used in China's legal instrument, the 
2017 Announcement of Appli cant Enterprise Data.108 We have adjusted the text of paragraph  7.77 
accordingly . Since the description of the public comment process i s based on a legal instrument, the 
2017 A nnouncement of Applicant Enterprise Data, rather than China's explanation, we do not 
consider it accurate to include the United States' proposed addition.  
6.14.   The United States requests that we  "avoid confusion" by adding a direct referen ce to Article  30 
of the 2003 Provisional Measures in  footnote 281 to paragraph 7.105  (footnote 241 to 
paragraph  7.105 of the Interim Report) , which sets o ut the legal basis for the requirement to return 
unused TRQ amounts.109 China has not commented on this request. We note that footnote  281, first, 
provides a direct ref erence to Article 23 of the 2003 Provisional Measures, which is the legal basis 
for the requirement to return unused TRQ amounts. Footnote  281, then, explains that Ar ticle 30 of 
the 2003 Provisional  Measures  imposes penalties for failure to comply with the requirement  to return 
unused TRQ amounts , and quotes the text of this provision. Thus, i n our view, footnote 281 provides 
all the necessary information and does not cause confusion. We therefore reject the United States' 
request.  
6.15.   The United States requests that we add the phrase "with trading rights" to o ur description in  
paragraph  7.114  of the procedure for non -STE recipients to import under STE portions of TRQs, in 
order to accurately reflect Articles  4 and 22 of the 2003 Provisional Measure s, and to specify that 
non-STE recipients of STE portions of TRQs may only seek approval to import through enterprises 
"with trading rights" .110 China opposes th e United States'  request on the basis that trading right s 
                                                
100 China's request for review of the Interim Report, p. 2.  
101 United States' comments on China's request for review of the Interim Report, para. 3.  
102 United States' request for review of the Interim Report, paras. 15 -17. 
103 China's comments on the United State s' request for review of the Interim Report, para. 9.  
104 Article 15.2  of the DSU.  
105 Appellate Body Reports, EC – Sardines , para. 301; and EC – Selected Customs Matters , para. 259. 
See also Panel Reports, Japan – DRAMs (Korea) , para. 6.2; US – Poultry (China) , para. 6.32; India – 
Agricultural Products , para. 6.5; India – Solar Cells , para. 6.24; Russia – Pigs, paras. 6.6-6.7; US – Zeroing 
(EC) (Article 21.5 – EC), para. 7.26; and Brazil – Taxation , para. 6.7.  
106 China's request for review of the Interim Report, p. 2.  
107 United States' comments on China's request for review of the Interim Report, para. 4.  
108 2017 Announcement of Applicant Enterprise Data, (Exhibit USA -19). 
109 United States' request for review of the Interim Report, para. 18.  
110 United States' request for review of the Interim Report, para. 19.  WT/DS517/R  
 
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  are no longer relevant to China's TRQ administration.111 We note that the term "trading rights" 
appear s several times in the 2003 Provisional Measures.  As clarified in our factual description of 
China's TRQ administration above, we, however,  do not refer t o this term  in our Report  because 
China explains that all enterprises in China have trading rights, which are granted automatically 
upon registration.112 The United States has not contested China's explanation or otherwise suggested 
that trading rights are r elevant . In light of this, we do not find it useful to refer to trading rights in 
describing the procedure for non -STE recipients to import under STE portions o f TRQs, or elsewhere, 
and therefore reject the United States' request.  
6.16.   The United States requests that we revise our finding in paragraph 7.132  that China's failure 
to give public notice  of the outcomes of the NDRC's alloca tion and reallocation processes would not  
inhibit the filling of each TRQ by preventing grain importers and exporters from entering into 
commercial arrangement s for the importation of wheat, rice, and corn , because nothing prevents 
TRQ recipients from publ ishing their own outcomes or contacting grains exporters. In the 
United  States' view, this finding " does not include, however, circumstances where a TRQ holder (the 
STE, COFCO, for example) may not wish to enter into commercial arrangements for the importa tion 
of grains ".113 China opposes the United States' request, arguing that it is based on "a purely 
speculative hypothetical" and "only serves to confirm that [the United States] lack s any valid basis 
for arguing that the information currently published by C hina is insufficient".114 We reiterate that 
interim review is not an appropriate stage for the parties to raise new arguments or re -argue their 
case on the basis of arguments already put before the Panel.115 Furthermore,  consideration  of 
"circumstances where a  TRQ holder (the STE, COFCO, for example) may not wish to enter into 
commercial arrangements for the importation of grains " would , in our view,  not alter the finding that 
China's failure to give public notice of the outcomes of the NDRC's allocation and re allocation 
processes would not inhibit the filling of each TRQ . More particularly, if TRQ recipients do not wish 
to enter into commercial arrangements with gra in exporters, they will presumably not do so 
regardless of whether  China provides  public notice o f the allocation and reallocation outcomes.  We 
therefore reject the United States' request that we revise our finding in paragraph 7.132 . 
6.17.   China requests that we modify paragraph 7.145  and footnote 337 thereto  (footnote  297 
of the Interim Report) by deleting references to  Articles 30 and 31 of the 2003 Provisional Measures 
since these provisions impose penalties for non-use of TRQ allocations , rather than penalties for 
failure to comply with the usage requirements for wheat and corn imported under TRQ allocations.116 
China requests that we instead refer to  China 's explanation  "that in cases where NDRC imposes 
penalties on recipients f or not having met the usage requirements for imported wheat and corn 
under the TRQs, such penalties would take the form of deductions in TRQ allocations in the coming 
year".117 The United States opposes the deletion of references to Articles 30 and 31 of the  2003 
Provisional Measures , arguing that a TRQ recipient who " knows it can not or may not be able to 
process the full amount of its wheat or corn allocation in its own plant  … may not apply for or import 
as much grain, and in the latter scenario would be s ubject to the TRQ utilization penalty referenced 
in Articles 30 and 31 ".118 However, t he United  States does not object to China's request that an 
additional reference be provided to China's explanation of the penalties for failure to comply with 
the usage re quirements for wheat and corn.119 We note that while the penalties in Articles 30 and 
31 of the 2003 Provisional Measures are not directly applicable to failure to comply with the usage 
requirements for wheat and corn, the operation of the usage requirements , in conjunction with the 
penalties for non -use of TRQ  allocations , has an effect on the filling of the TRQs. It is this effect that 
forms the basis for the United States' claim and our finding under Paragraph 116 of China's Working 
Party Report. We theref ore reject China's request for the deletion of the references to Articles 30 
and 31 of the 2003 Provisional Measures in paragraph 7.145  and footnote 337 thereto . However , 
                                                
111 China's comments on the United States' request for review of the Interim Report, para. 10.  
112 See fn 53 above ( referring to China's response to Panel question No. 1(e), para. 6) . 
113 United States' request for review of the Interim Report, para. 20.  
114 China's comments on the United States' request for review of the Interim Report, para. 11.  
115 Appellate Body Reports, EC – Sardines , para. 301; and EC – Selected Customs Matters , para. 259. 
See also Panel Reports, Japan – DRAMs (Korea) , para. 6.2; US – Poultry (China) , para. 6.32; India – 
Agricultural Products , para. 6.5; India – Solar Cells , para. 6.24; Russia – Pigs, paras. 6.6-6.7; US – Zeroing 
(EC) (Article 21.5 – EC), para. 7.26; and Brazil – Taxation , para. 6.7.  
116 China's request for review of the Interim Report, pp. 3 -4. 
117 China's request for review of the Interim Report, p. 4 (referring to China's response to P anel question 
No. 58(a), para. 33).  
118 United States' comments on China's request for review of the Interim Report, para. 6.  
119 United States' comments on China's request for review of the Interim Report, para. 11.  WT/DS517/R  
 
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  we have made certain modifications to paragraph 7.145  to clarify the relevance of the penalties for 
non-use of T RQ allocations in Articles 30 and 31 of the 2003 Provisional Measures, for the usage 
requirements for wheat and corn. Further,  we consi der that China's explanation that penalties similar 
to those in Articles 30 and 31 of the 2003 Provisional Measures apply to failure to comply with the 
usage requirements for wheat and corn support s our finding in paragraph 7.145 , and we therefore 
agree with both parties tha t an additional reference to this explanation in footnote 337 is appropriate 
and useful . 
6.3  Claim under Article XIII:3(b) of the GATT 1994  
6.18.   The United States requests  that the term "contracting party" be replaced by the term 
"Member " in paragraph 7.187 .120 China has not commented on  this request. We note that the term 
"contracting party" appears as part of a quote from Article XIII:3(a) of the GATT 1994. 
Paragraph  2(a) of the Explanatory Note t o the GATT 1994, provides that  "references to 'contracting 
party ' in the provisions of GATT 1994 shall be deemed to read 'Member '". We therefore do not 
consider it necessary to modify the quote in paragraph 7.187 , and reject the United States' request . 
6.19.   The United States requests  a "clarification, for accuracy and for consistency" in 
paragraph  7.190 . More particularly, the United States requests that we explain that a TRQ gives 
applicants permission or opportunity  to import goods at the in -quota rate "up to the total TRQ 
amounts allocated" rather than "up to  the total TRQ amounts available for allocation" .121 China 
opposes the United States' request, arguing that  the proposed "clarification"  would  be inconsistent 
with the Panel's finding that Article XIII:3(b) of the GATT 1994 requires public notice of the total 
TRQ amount s available for allocation, not the total TRQ amounts actually allocated.122 We agree with 
China that the United  States' requested modification  is not a "clarification, for accuracy and for 
consiste ncy" but rather a substantive modification that would not be consistent with our 
interpretation of Article XIII:3(b) and our finding that this provision requires public notice of the 
total TRQ amounts of available for allocation, not the total TRQ amounts actually allocated. We 
therefore reject the United States' request.  
6.4  Claim under Article X:3( a) of the GATT 1994  
6.20.   The United States requests  that the reference to a "well-established principle in WTO case 
law" in  paragraph 7.212  be deleted, since it could be " misunderstood as indicating that prior panel 
and appellate reports have precedential value " and since the  DSU provides more direct support for 
the rel evant finding.123 The United States suggests further modifications to paragraph  7.212  and 
footnote 404 thereto  (footnote 364 of the Interim Report) to clarify that the finding is based on 
the provisions of the DSU. China has not commented on this request . While we have not found it 
necessary to introduce all of the United States' suggested modifications, we have deleted the 
reference to a "well -established principle in WTO case law" and have made certain other textual 
modifications  to paragraph 7.212  and footnote 404 thereto in order to address  the concern  identified 
by the United States . Although not specifically requested by the United  States, we have  also made 
the same modification s in paragraph  7.238  and footnote 446 thereto (footnote 406 of the Interim 
Report) concerning the claim under Article XI:1 of  the GATT  1994.  
7  FINDINGS  
7.1  Claims under Paragraph 116 of China's Working Party R eport  
7.1.1   Introduction  
7.1.  The United States raises several claims under Paragraph 116 of China's Working Party Report, 
namely that China violates the obligations to administer its wheat , rice , and corn  TRQs on a 
transparent, predictable , and fair basis, using clearly specified administrative procedures and 
requirements that would not inhibit the filling of each TRQ.124 Each claim takes issue with specific 
aspects of China's administration of its wheat, rice, and corn TRQs. Such aspects include the basic 
                                                
120 United States' request for review of the Interim Report, para. 22.  
121 United States' request for review of the Interim Report, para. 23.  
122 China's comments on the United States' request for review of the Interim Report, para. 13.  
123 United States' request for review of the Interim Report, para. 24.  
124 United States' first written submission, paras. 64 and 309.  WT/DS517/R  
 
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  eligibility criteria to receive TRQs (basic eligibility criteria); the principles for allocating the TRQ 
amounts (allocation principles) and the procedures for reallocating the amounts of returned TRQs 
(reallocation procedures); the use of a public comment process; the administration of STE and non -
STE portions of TRQs; the extent of the public notice provide d in connection with allocation, return 
and reallocation of TRQs; and the usage requirements imposed on wheat, rice , and corn  imported 
under TRQ  allocations  (usage requirements) .125 
7.2.  While acknowledging that certain aspects of i ts TRQ administration could be better reflected  in 
its legal instruments126, China gene rally rejects all of the United  States' claims under 
Paragraph  116.127 
7.1.2   Legal provision  
7.3.  Paragraph 116 of China's Working Party Report states in relevant part:  
The representative of China stated that upon a ccession, China would 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 opportunit ies; that would reflect consumer 
preferences and end -user demand; and that would not inhibit the filling of each TRQ.128 
7.4.  Previous WTO panels have not yet addressed Paragraph 116. We therefore find it useful to set 
out our understanding of the meaning and nat ure of the legal obligations laid down in this provision, 
before proceeding to our assessment of the claims.  
7.5.  As a threshold matter, we note that Paragraph  1.2 of China's Accession Protocol stipulates that 
"[t]his Protocol, which shall include the commitmen ts referred to in paragraph 342 of [China's] 
Working Party Report, shall be an integral part of the WTO Agreement ."129 Paragraph  342 of China's 
Working Party Report, in turn, refers to the commitments contained in a number of its paragraphs, 
including Paragr aph 11 6.130 In light of this, we consider that China's commitments under 
Paragraph  116 are enforceable under the DSU, and we will interpret these obligations in accordance 
with the customary rules of interpretation of public international law reflected in  the relevant 
provisions of the Vienna Convention on the Law of Treaties.131 
7.6.  Paragraph 116 contains multiple obligations, which may be grouped into three categories. The 
first category concerns the basis of China's TRQ administration, and requires this basis to be 
transparent, predictable, uniform, fair , and non -discriminatory. The second category concerns the 
timeframes, administrative procedures and requirements China uses in its TRQ administration, and 
requires these timeframes, administrative procedu res and requirements to be clearly specified. The 
third category concerns the effects of the aforementioned time -frames, administrative procedures 
and requirements, and requires that they provide effective import opportunities, reflect consumer 
preferences  and end -user demand, and not inhibit the filling of each TRQ.  
7.7.  All obligations set forth in  Paragraph 116 apply only to China's administration of its TRQs, as 
opposed to the TRQs themselves. In this regard, we consider that China's administration of its TR Qs 
covers the legal instruments and acts of the relevant authorities that implement the TRQs or put 
them into practical effect.132 
                                                
125 United States' first written submission, paras. 65, 70, 113, 152, 165, 180, and 190 -192; and 
response to Panel question No. 19(b), paras. 53 -55. 
126 China's opening statement at the f irst meeti ng of the Panel, para.  14; and response to Panel 
question No. 26, para. 73.  
127 China's first written submission, para. 157; responses to Panel question No.  24(b), paras. 71 -72 and 
No. 26, para. 73; and second written submission, paras. 57 -61. 
128 China's Work ing Party Report, (Exhibit USA -1), Paragraph  116. 
129 China's Accession Protocol, (Exhibit USA -2), Paragraph  1.2. 
130 China's Working Party Report, (Exhibit USA -1), para. 342.  
131 For a similar approach, see e.g. Appellate Body Reports, China – Raw Materials , para. 278; and  
China – Rare Earths , para.  5.19; and Panel Reports, China – Auto Parts , paras. 7.740 -7.741; China – Raw 
Materials , paras.  7.112 -7.114; and China – Rare Earths , para. 7.40. 
132 For a similar approach under Article X:3(a) of the GATT 1994 concerning the administration of trade 
regulations, see e.g. Appellate Body Reports, EC – Bananas III , para. 200; EC – Selected Customs Matters , WT/DS517/R  
 
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  7.8.  Paragraph 116 lists the multiple obligations contained therein using the conjunction "and", 
which, as both parties agree133, suggests that these are legally independent obligations. Therefore, 
a breach of any of these obligations would lead to a violation of Paragraph 116.134 In our assessment, 
we focus only on the six obligations the United States has invoked in challenging China 's TRQ 
administration under Paragraph 116 , namely  the obligations to  (a) administer TRQs on a transparent  
basis; (b) administer TRQs on a predictable  basis; (c) administer TRQs on a fair basis; (d)  administer 
TRQs using clearly specified administrative pro cedures; (e)  administer TRQs using clearly specified 
requirements ; and (f) administer TRQs using timeframes, administrative procedures and 
require ments that would not inhibit the filling of each TRQ.  
7.9.  Since the obligations set forth in  Paragraph 116 are leg ally independent, we consider it 
important to set out our understanding of the meaning and nature of each obligation  the 
United  States has  invoked in the case before us. T he first three obligations concern the "basis" for 
China's TRQ administration, in oth er words,  the underlying set of rules or principles according to 
which China administers  its TRQs.135 In our view, these obligations require China t o administer its 
TRQs through an underlying set of rules or principles  that are easily understood or discerned  by 
applicants and other interested parties ( administer TRQs on a transparent  basis)136; that allows 
applicants and other interested parties to easily anticipate how decisions regarding TRQ 
administration are made ( administer TRQs on a predictable  basis)137; and that is impartial and 
equitable , requiring the relevant authorities to administer TRQs in accordance with the  applicable 
rules and standards ( administer TRQs on a fair basis).138 With respect  to the fourth and fifth 
obligations, we consider that the y require China to use administrative procedures and requirements 
that are set out in plain or obvious detail  (use clearly specified administrative procedures and 
requirements) .139 The sixth obligatio n, concern ing the effects  of China's TRQ administration , requires 
China to employ  timefram es, administrative procedures and  requirements that would not restrain or 
prevent the filling of each TRQ  (administer TRQs in a manner that would not inhibit the fill ing of each 
TRQ).140 Although this obligation concerns the effects of China's TRQ administra tion on the filling of 
each TRQ , we do not believe that the United States is required to quantify such effects in order to 
prevail under this claim. Rather, the Unite d States can substantiate this claim with reference to the 
design, architecture and structure of China's TRQ administration, in its relevant context.141 
                                                
paras. 199-201 and 224; and EC – Poultry, para. 115; and Panel Report, Thailand – Cigarettes  (Philippines) , 
paras.  7.869 -7.870.  
133 United States' first written submission, para. 63; and response to Panel question No. 24(a), para. 
77; and China's response to panel question No. 24(b), para. 71. Some third parties have also expressed the 
same view. (See Brazil's third -party statement, para. 3; and response to Panel question No. 1(b); Canada's 
response to Panel question No. 1(b), para. 6; European Union's response to Panel question No. 1(b), 
paras.  39-41; and Japan's response to Panel question No. 1(b)).  
134 For a similar approach under Article X:3(a) of the GATT 1994 requiring uniform, impartial and 
reasonable administration of trade regulations, see e.g. Panel Reports, Dominican Republic – Import an d Sale 
of Cigarettes , para. 7.383; and Thailand – Cigarettes (Philippines) , para. 7.867.  
135 The Shorter Oxford Dictionary defines "basis" as  "[a] thing on which anything is constructed and by 
which its constitution or operation is determined; a footing (of a specified kind); a determining principle; a set 
of underlying or agreed principles". ( Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford 
University Press, 2007), Vol. 1, p. 188).  
136 The Shorter Oxford Dictionary defines "transparent" a s "[e]asily seen through or understood; easily 
discerned; evident, obvious". ( Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford 
University Press, 2007), Vol. 2, p. 3373).  
137 The Shorter Oxford Dictionary defines "predictable" as "[a]ble  to be predicted. Also (of a person), 
acting in a way that is easy to predict". ( Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) 
(Oxford University Press, 2007), Vol. 2, p. 2329).  
138 The Shorter Oxford Dictionary defines "fair" as  " [o]f a pe rson, action, argument, etc.: just, 
unbiased, equitable, impartial; legitimate, in accordance with the rules or standards". ( Shorter Oxford English 
Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), Vol. 1, p. 907).  
139 The Shorter Oxfo rd Dictionary defines "clearly" as, "  [d]istinctly; plainly; manifestly, obviously" and 
"specify" as  "… [s]peak or treat of a matter etc. in detail; give details or particulars". ( Shorter Oxford English 
Dictionary , 6th edn, A. Stevenson (ed.) (Oxford Unive rsity Press, 2007), Vols. 1 and 2, pp. 415 and 2973).  
140 The Shorter Oxford Dictionary defines "inhibit" as  " [r]estrain, prevent" and "filling" as  " [s]omething 
which fills or is used to fill a space or hole, stop up a gap, etc". ( Shorter Oxford English Dictionary , 6th edn, A. 
Stevenson (ed.) (Oxford University Press, 2007), Vol. 1, pp. 949 and 1369).  
141 For a similar approach under Article XI:1 of the GATT 1994 concerning quantitative restrictions on 
importation and exportation, see e.g. Appellate  Body Report s, Argentina – Import Measures , para. 5.217; and 
Panel Report, Indonesia – Import Licensing Regimes , para. 7.45.  WT/DS517/R  
 
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  7.1.3   Horizontal issues  
7.10.   In this section, we address certain horizontal issues arising from the United States' c laims 
under Paragraph 116 of China's Working Party Report, before proceeding to our assessment of the 
individual claims.  
7.11.   First, we explain how we have structured our assessment of the United States' claims under 
Paragraph 116. The United States challenges several aspects of China's administration of its wheat, 
rice, and corn TRQs  under several obligations set forth in Paragraph 116. More particularly, and as 
explained above, the United States claims that China's TRQ administration violates six obligations 
under Paragraph 116 , namely the obligations to (a)  administer TRQs on a transparent basis; (b) 
administer TRQs on a predictable basis; (c)  administer TRQs on a fair basis; (d) use clearly specified  
administrative procedures; (e)  use clearly specified requ irements; and (f) administer TRQs in a 
manner that would not inhibit the filling of each TRQ. In substantiating these claims, the United 
States challenges several specific aspects of China 's TRQ administration, namely  those relat ing to 
(i) the b asic eligibil ity criteria; (ii)  the allocation principles  and the reallocation procedures ; (iii) the 
use of a public comment process; (iv) the administration of STE and non -STE po rtions of TRQs; 
(v) the extent of the public notice provided in connection with allocation, return and realloca tion of 
TRQs; and (vi) the usage requirements.142 The United States combines different as pects of China's 
administration of its wheat, rice, and corn TRQs  in arguing that it violate s a particular obligation 
under Paragraph 116.  
7.12.   A panel has discretion to decide the order of its analysis and, in doing so, it may take into 
account how the parties have presented their claims and arguments.143 In the case before us, the 
United  States has presented its claims on the basis of alleged vio lations of the obligations laid down 
in Paragraph 116, and has addressed, under separate subheadings, which aspects of China's TRQ 
administration  violate a particular obligation.144 China, in turn, has presented its arguments on the 
basis of the aspects of its TRQ administration , and has addressed, cumulatively, the claims presented 
by the United States about an aspect of China's  TRQ administration .145 
7.13.   Both approaches have their own logic, and they both give rise to a certain amount of repetition 
because of the  intertwined nature of the United States' claims. For ease of explanation, and to avoid 
unnecessary repetition, we have decided to assess the claims on the basis of the aspects of  China's 
administration of its wheat, rice, and corn TRQs . That is, we will a nalyse all claims raised by the 
United States about a n aspect of China's TRQ administration , and then proceed to the next aspect. 
In considering whether each aspect  of China's TRQ administration  is consistent with the relevant 
legal obligations, we will no t undertake an "isolated consideration of each element"146, and will , 
where appropriate, take into consideration the interlinkages between different aspects of China's 
TRQ administration . Next, we will conduct a holistic assessment of the compatibility of Ch ina's TRQ 
administration with the obligations set forth in Paragraph 116, by synthesizing our analyses 
regarding the individual aspects of China's TRQ administration .147 
7.14.   Second, w e recall that the obligations set forth  in Paragraph 116 apply to China's TRQ 
administration148, and that Article 11 of the DSU requires us to examine the applicability of the 
obligations set forth in Paragraph 116 to the measure before us. Hence, as pointed out in 
paragraph  7.7 above, we have to satisfy ourselves that the aspects the United  States  challenge s 
                                                
142 United States' first written submission, paras. 65, 70, 113, 152, 165, 180, and 190 -192; and 
response to Panel question No. 19(b) , paras. 53 -55. 
143 See, e.g. Appellate Body Report, Canada – Wheat Exports and Grain Imports , para. 126; and Panel 
Reports, Argentina – Financial Services , para. 7.67; and EU – Poultry Meat (China) , para. 7. 12. 
144 United States' first written submission, par as. 70 -222. 
145 China's first written submission, paras. 45-55, 61 -76, 93 -100, 110, 112 -115, and 124 -134. 
146 Panel Report, US – Tuna II (Mexico) (Article 21.5 – US) / US – Tuna II (Mexico) (Article 21.5 – 
Mexico II) , para. 7.530 (quoting Appellate Body Report , US – Tuna II (Mexico) (Article 21.5 – Mexico) , 
para. 7.21.)  
147 For a similar approach, see e.g. Panel Report, US – Tuna II (Mexico) (Article 21.5 – US) / US – Tuna 
II (Mexico) (Article 21.5 – Mexico II) , paras. 7.529. In responding to the United States' claims, China points to 
the importance of assessing the compatibility with the obligations laid down in Paragraph 116 of its TRQ 
administration "as a whole". (See China' s second w ritten submission, paras. 57 -61; and openi ng statement at 
the second meeting of the Panel, paras. 20 -25). By taking into account the interlinkages between individual 
aspects of China's TRQ administration and by conducting a holistic assessment of the compatibility of China's 
TRQ administration wit h the obligations laid down in Paragraph 116, we do exactly that.  
148 See para. 7.7 above.  WT/DS517/R  
 
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  form part of China's TRQ administration, as opposed to the TRQs themselves. In this regard, we 
recall that a TRQ is essentially a two -level tariff measure, consisting of a lower tariff rate imposed 
on imports within the quota volume and a higher tariff rate imposed on imports outs ide the quota 
volume. TRQ administration, on the other hand, consists of the legal instruments and acts of the 
relevant authorities that implement TRQs or put them into practical effect.149 
7.15.   None of the aspects  that the United States  challenge s determine s the level of the within -quota 
or outside -quota tariff rates, nor the quota volumes. Therefore, they cannot be considered as 
forming part of China's TRQs.  Rather, the challenged aspects serve to implement China's TRQs or to 
put them into practical effect in th at they determine who is eligible to receive a TRQ allocation or 
reallocation, the amount of the TRQ allocation or reallocation, how allocated TRQ amounts are to be 
utilized, how products imported under TRQs are to be used, and the consequences of not util izing 
allocated TRQ amounts. We therefore consider that all the challenged aspects form part of China's 
TRQ administration, as opposed to forming part of the TRQs themselves.  
7.16.   China argues that the usage requirements for wheat, rice, and corn imported under  TRQs and 
the penalties for non -use of TRQ allocations, form part of the TRQs themselves and therefore fall 
outside the scope of Paragraph  116.150 Specifically, China submits that the usage requirements are 
"substantive rules" that "condition access to the T RQ" and therefore form part of the TRQ.151 China 
also submits that the usage requirements "define the parameters of the quota itself"  because "if 
imports will not be used for the specified purpose, they will not be accessible for importation 
regardless of wh ether the applicant submits an application or complies with any other administrative 
procedural requirement" .152 We disagree with these arguments. China has not explained, and it is 
not clear to us, in what sense the usage requirements define the parameters of the quota itself or 
constitute substantive rules that condition access to the TRQ. The usage requirements do not define 
the types or volumes of wheat, rice, and corn covered by China's TRQs, nor do they affect the 
within -quota or outside -quota tariff ra tes. Rather, they are requirements that recipients of TRQ 
allocations must comply with when using the wheat, rice, or corn imported under their TRQ 
allocations .153 
7.17.   We also do not agree with China that the usage requirements and the penalties for non -use 
of TRQ allocations are included in its Schedule of Concessions and Commitments on Goods (Schedule 
CLII) in such a way as to suggest that these requirements and penalties form part of China's TRQs.154 
With respect to the penalties for non -use of TRQ allocations, we note that they are not included in 
the parts of China's Schedule that set out the description and tariff item number of the covered 
products, the quota quantities, and within -quota tariff rates. Rather, they are set out in the parts 
that describe how Ch ina is to implement and apply its TRQs.155 With respect to the usage 
requirements, we note that they are not mentioned in China's Schedule CLII. China argues that the 
usage requirements are "contemplated" in its Schedule because the Schedule allows China to take 
into account applicants' production capacity in allocating TRQ amounts during the first year.156 As 
explained in detail in paragraphs 7.148  and 7.149  below, we do not consider that the reference 
made to the consideration of production capacity in connec tion with the allocation of TRQ amounts  
implies that China's Schedule allows it to impos e usage requirements. In any case, as with the 
penalties for non -use of TRQ allocations, the reference to production capacity is  not included in the 
parts of China's Schedule that set out the description and tariff item number of the covered products, 
                                                
149 Ibid. 
150 China's responses to Panel question No. 31, para. 85, and No. 38 (a), paras. 94 -95 and 101; and 
second written submission, para s. 49 and 70 -79. The European Union and Japan submit similar views. 
(European Union's thi rd-party submission, para. 144; and Japan's response to Panel question No. 2).  
151 China's second written s ubmission, para. 75. See also China's response to Panel question No. 38 (a), 
paras. 94 -95. 
152 China's second written submission, para.  78. See also China's response to Panel question No. 38 (a), 
para. 95.  
153 See section 2.2.2.2  above . 
154 China's response to Panel question No. 38 (a), para. 101; and second written submission, para. 79.  
155 China's Schedule CLII, Part I, Section IB (Most -Favoured -Nation Tariff, Agricultural Products, Tariff 
Rate Quotas), (Exhibit USA -23), Para. 6).  
156 China's response to Panel question No. 27, para s. 78-79. WT/DS517/R  
 
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  the quota quantities, and within -quota tariff rates, but rather in the parts that describe how China 
is to implement and apply its TRQs.157 
7.18.   For these reasons, we find that Paragraph  116 applies to all aspects challenged by the 
United  States, including the usage requirements and penalties for non -use of TRQ allocations.  
7.19.   Having addressed these horizontal issues, we now assess the United  States' claims concerning 
the individual aspects of China's TRQ administration, followed by our holistic assessment of the 
compati bility of that administration  with the obligations invoked by the United States under  
Paragraph  116. 
7.1.4   Assessment of the individual aspects of China' s TRQ administration challenged 
under Paragraph 116  
7.1.4.1   Basic eligibility criteria  
7.1.4.1.1   Introduction  
7.20.   The United States  claims that four of the basic criteria for eligibility to receive wheat, rice, 
and corn TRQs are inconsistent with four obligations set forth in Paragraph 116, namely, the 
obligations to administer TRQs on a transparent, predictable, and fair basis, and t o use clearly 
specified requirements.  
7.21.   China does not contest the United States' claims about the basic eligibility criteria, but 
maintains that "while  China acknowledges that the Basic Criteria need to  be updated , this does not 
mean that China's system of TRQ administration is inconsistent with Paragraph  116".158 While taking 
note of China's acknowledgement of the need to update the basic eligibility criteria, we consider that 
our obligation under Article 11 of the DSU to conduct an objective assessment of th e matter before 
us requires us nevertheless to examine the consistency of those criteria with Paragraph 116.159 
7.22.   Below, we describe the basic eligibility criteria at issue and summarize the parties' main 
arguments. We then assess whether the basic eligibility  criteria are inconsistent with the four 
obligations  the United States has  invoked, taking into account our understanding of the meaning 
and nature of each of the relevant obligations laid out in paragraph  7.9 above.  
7.1.4.1.2   Basic eligibility criteria at issue  
7.23.   The basic criteria for eligibility to receive wheat, rice , and corn TRQs are published in the 
NDRC's annual allocation notices.160 The 2017 Allocation Notice contains e ight such criteria.  The 
United  States takes issue with the following four:  
- Possessing "a good financial condition";  
- Possessing "[a good] integrity situation";  
- Possessing "no record of violating regulations with respect to customs, industry and 
commerce, taxation, credit and loans, inspection and quarantine, grain distribution, 
environmental protection, and other areas"; and  
                                                
157 China's Schedule CLII, Part I, Section IB (Most -Favoured -Nation Tariff, Agricultural Products , Tariff 
Rate Quot as), (Exhibit USA -23), Para. 6).  
158 China's response to Panel question No. 26, para. 73. See also China's response to Panel question No. 
24(b), paras. 71 -72; and second written submission, paras. 57 -61. 
159 For a similar approach, see, e.g. Panel Reports, US – Shrimp (Ecuador) , paras. 7.9 -7.12, US – 
Poultry (China) , paras. 7.445 -7.446; and US – Shrimp (Thailand) , paras. 7.20 -7.21 (referring to Appellate 
Body Reports, EC – Hormones , para. 109; and US – Gamblin g, para s. 139-141).  
160 The 2016 and 2017 A llocation Notices both list the basic eligibility criteria in their Articles II entitled 
"Application Criteria". Although there are some differen ces between the texts of these A rticles in the two 
Allocation Notices,  the main criteria remain the same.  WT/DS517/R  
 
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  - "having fulfilled social responsibilities associated with [their] operations".161 
7.24.   The second paragraph of Article II of the 2 017 Allocation Notice states that the possession of 
the basic eligibility criteria is a "prerequisite" for obtaining a TRQ allocation.162 
7.1.4.1.3   Main arguments of the parties  
7.25.   The United  States argues that the terms used in the four challenged eligibility criteria a re 
inherently vague and that the 2017 Allocation Notice fails to define them in a way that is easily 
understandable to potential applicants. In the United States' view, this runs counter to the 
obligations to administer TRQs on a transparent163 and predictab le basis164, and to use clearly 
specified requirements.165 The United States also argues that the vagueness in these criteria may 
cause different applicants to interpret them differently and submit different information to the NDRC 
to demonstrate t heir eligibi lity to receive TRQ allocations , and the latter may therefore use different 
information in assessing the eligibility of different applicants. In the United States' view, this runs 
counter to the obligation to administer TRQs on a fair basis.166 
7.26.   China general ly points out that the NDRC "[i]n practice … does not conduct an individual 
assessment of each of the Basic Criteria" but rather uses the government website Credit China's 
"blacklist " of enterprises with  "records of non -compliance with industry and commerc e registration, 
tax payments, customs, and [non-]compliance with court judgments"  to determine  applicants' 
eligibility.167 Thus, the NDRC does not take into account all of the basic eligibility criteria set forth in 
the annual allocation notices, and, instea d, bases its assessment on whether an applicant appears 
in Credit China's blacklist . 
7.27.   In response to this statement by China, the United States submits that China has not 
substantiated its assertions regarding the practice of the NDRC168 and that, in any even t, the 
discrepancy between China's legal instruments and the stated practice of the NDRC further supports 
its claims  of inconsistency of the basic eligibility criteria with the obligations to administer TRQs on 
a transparent, predictable , and fair basis, a nd to use clearly specified requirements.169 
7.1.4.1.4   Analysis by the Panel  
7.28.   Below , we first assess the United States' claims in respect of each of the four basic eligibility 
criteria at issue. Thereafter, we examine  the implications of China's statement that, in prac tice, the 
NDRC bases its eligibility assessment on wheth er an applicant appears in Credit China 's blacklist . 
7.29.   The United States claims that the four basic eligibility criteria at issue violate the obligations 
to administer TRQs on a transparent, predictable, and fair basis, and to use clearly specified 
requirements.  
7.30.   Starting with the criteria  that applicants must possess a good integrity situation  and have 
fulfilled social responsibilities  associated with their operations, we agree with the United  States that 
the terms "integrity situation" and "social responsibilities" are inherently vague. Both of these terms 
can be interpreted as having many different m eanings. Looking at the contex t in which they appear 
in China's legal instruments , we note tha t these vague terms are not defined , nor is there any 
guidance as to the kinds of information that the NDRC will consider in assessing compliance with 
                                                
161 2017 Allocation Notice, (Exhibit USA -15), Article II ; and  United States' first written submission, 
paras. 78 -84, 119-125, 157, and 180 -185. 
162 2017 Allocation Notice, (Exhibit USA -15), Article II . 
163 United States' first written submission, para s. 78-84; and opening statement at the  first meeting of 
the Panel, para. 9 . 
164 United States' first written submission, paras. 119 -125; and opening statement at the  first meeting 
of the Panel, para. 11.  
165 United States'  first written submission, paras. 180 -188; and opening statement at the first meeting 
of the Panel, para. 15.  
166 United States' first written submission, para. 159.  
167 China's first written submission, p ara. 14. See also China's first written submission, par as. 35 -38; 
and responses to Panel question No. 8(c), para. 24, and No. 8(g), para. 28.  
168 United States'  opening statement at the second meeting of the Panel, paras. 3 and 16.  
169 United States' opening s tatement at the first meeting of the Panel, paras. 11, 26-27, and 38; 
response to Panel question No. 19(b), para. 55; and second written submission, paras. 84 -94. WT/DS517/R  
 
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  these requirements. In our view, lack of such guidance leaves potential applicants in the dark. 
Without f urther clarification as to their meaning in the context of China's TRQ administration, the 
terms "integrity situation" and "social responsibilities" may be interpreted in different ways.  
7.31.   For these reasons, we find these two criteria to be inconsistent with  the obligation to 
administer TRQs on a transparent basis because they are not easily understood or discerned by 
applicants and other interested parties. Similarly, we find them to be inconsistent with the obligation 
to administer TRQs on a predictable bas is because they do not allow applicants and other interested 
parties to easily anticipate how the NDRC determines applicants ' integrity situation and their 
fulfilment of social responsibilities, and thus t heir eligibility to receive TRQ allocations . We als o find 
these criteria to be inconsistent with the obligation to administer TRQs using clearly specified 
requirements because the requirements that these two criteria entail are not set out in plain or 
obvious detail.  
7.32.   The United States argues that the vague ness in these two criteria also leads to a violation of 
the obligation to administer TRQs on a fair basis. As explained above , fairness requires that China's 
TRQ administration be impartial and equitable, and that the relevant authorities administer TRQs in 
accordance with the applicable rules and standards.170 We have found the two criteria at issue to be 
vague, and concluded , on that basis, that China does not administer its TRQs on a transparent and 
predictable basis, using clearly specified administrative  requirements. However, we are not 
convinced that the vagueness in these criteria, in and of itself, is sufficient to demonstrate that China 
does not administer its TRQs on a fair basis. The United States' claim concerning the fairness of the 
basic eligibi lity criteria is premised on the argument that the vagueness in these criteria may cause 
applicants to submit different information which would, in turn, cause the NDRC to assess different 
applicants' eligibility on the basis of different types of informat ion.171 In our view, however, the 
United States has not substantiated this argument. In particular, we note that the application form 
attached to the 2017 Allocation Notice requires applicants to submit a list of specific information and 
to "[g]uarantee its conformity with the grain import tariff -rate quota application criteria".172 More 
particularl y, the form requires information on the nature of the ownership of the enterprise, 
registered capital, tax payment s, asset -liability ratio, and import and sales perf ormance as well as 
production and operation capacity for the first or second  year preceding the one for which the 
application is made. 173 The form does not provide applicants with the possibility to submit additional 
information, including information they may believe is relevant to determine compliance with the 
basic eligibility criteria. The United States argues that "the application is not necessarily just the 
form … but may also include 'related materials submitted by the applicant'".174 In making this 
argument, the United States refers to Article 12 of the 2003 Provisional Measures, which states:  
Agencies authorized by NDRC, in accordance with the criteria announced, accept the 
applications and related materials submitted by the applicants  for wheat, corn, [] rice, 
and cotton, and transmit the applications to NDRC for approval prior to November  30, 
concurrently submitting a copy to the Ministry of Commerce.175  
7.33.   While this provision indicates that applicants have the possibility to submit mate rials along 
with their applications, the text also suggests that these will be materials related to the applications. 
Therefore, it does not alter the fact that the application form requires the same types of information 
from all applicants. We are not con vinced by the argument that applicants would, on their own 
motion, submit unsolicited information simply because they may believe such information to be 
relevant to determine compliance with the basic eligibility criteria. Therefore, regardless of the 
vagueness in the criteria, the United States has not demonstrated that there is a risk of different 
applicants submitting different types of information to the NDRC and the latter making its eligibility 
assessment based on those different types of information.  
                                                
170 See para. 7.9 above.  
171 United States' first written s ubmission, paras. 15 7-159. 
172 2017 Allocation Notice, (Exhibit  USA-15), Annex: 2017 Grain Import Tariff -Rate Quota Application 
Form.  
173 2017 Allocation Notice, (Exhibit  USA-15), Annex: 2017 Grain Import Tariff -Rate Quota Application 
Form.  
174 United States' re sponse to Panel question No. 65 (a), para. 24 (quoting 2003 Provisional Measures, 
(Exhibit USA -11), Article 12).  
175 2003 Provisional Measures, (Exhibit USA -11), Article 12 . (emphasis added)  WT/DS517/R  
 
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  7.34.   The United States also submits that "[p]otential 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" .176 We cons ider it unlikely that potential 
applicants would forego the possibility of applying for TRQ allocations – which are, as pointed out by 
the United States177, a commercial advantage – merely due to the vagueness in certain eligibility 
criteria.  
7.35.   We therefore do  not consider that the United States has made a prima facie  case that the 
vagueness in the two criteria at issue leads to a violation of the obligation to administer TRQs on a 
fair basis.  
7.36.   Turning to the criterion that applicants must possess a good financi al condition , we consider 
that this is less vague than the two criteria examined above. We note that some guidance could 
arguably be found in the application form attached to the annual allocation notices, which requires 
applicants to submit data on the na ture of the  ownership  of the enterprise , registered capital, tax 
payment s, asset -liability ratio , and import and sales performance as well as production and operation 
capacity for the first or second  year preceding the one for which the application is made .178 China's 
legal instruments, however, do not clarify whether this information is relevant to the criterion of 
having a good financial condition , nor do they clarify what other information may be relevant. 
Without further clarity in China's legal instrumen ts, it does not seem possible for potential applicants 
and other interested parties to know what is meant by possessing a good financial condition.  
7.37.   For these reasons, we find this criterion to be inconsistent with the obligation to administer 
TRQs on a tra nsparent basis because it is not easily understood or discerned by applicants and other 
interested parties. Similarly, we find this criterion to be inconsistent with the obligation to administer 
TRQs on a predictable basis because it does not allow applica nts and other interested parties to 
easily anticipate how the NDRC determines the state of applicants ' financial condition, and thus t heir 
eligibility to receive TRQ allocations . We also find this criterion to be inconsistent with the obligation 
to adminis ter TRQs using clearly specified requirements because the requirements that this criterion 
entails are not set out in plain or obvious detail.  
7.38.   The United States argues that the vagueness in the criterion of possessing a good financial 
condition also leads to a violation of the obligation to administer TRQs on a fair basis. In this regard, 
the United States submits the same arguments as those concerning the criteria of possessing a good 
integrity situation and having fulfilled social responsibilities associa ted with their operations .179 For 
the reasons explained in paragraphs  7.32 through 7.35 above, we disagree with these arguments, 
and consider that the United States has not made a prima facie  case that China has violated this 
obligation.  
7.39.   Turning now to the criterion that applicants must have no record of violation , we recall that 
this criterion is set out in Article II of the 2017 Allocation Notice as "no record of violating regulations 
with respect to customs, industry and commerce, taxat ion, credit and loans, inspection and 
quarantine, grain distribution, environmental protection, and other areas". The United  States takes 
issue with two elements of this criterion, namely, the lack of explanation of what constitutes a 
"violation" and the l ack of identification of the areas of regulation with which applicants must comply, 
in particular due to the residual category "other areas".180 
7.40.   We disagree with the United States' argument that this criterion lacks clarity because of the 
term "violation". W e consider this term to be self -explanatory. In our view, potential applicants and 
other interested parties would reasonably understand that "violation" of a rule in one of the listed 
areas of regulation entails breaking, or not complying with, that rule. Proceeding to the areas of 
regulation with which applicants must comply, the United States argues that the 2017 Allocation 
Notice "fails to further define any of the named areas or to identify which regulations the applicant 
                                                
176 United States' response to Panel question No. 65(a), pa ra. 25.  
177 United States' opening statement at the first meeting of the Panel, para. 46; and response to Panel 
question No. 28, para. 105.  
178 2017 Allocation Notice, (Exhibit USA -15), Annex: 2017 Grain Import Tariff -Rate Quota Application 
Form.  
179 United St ates' first written submission, paras. 15 7-159. 
180 United States' first written submission, para. 82.  WT/DS517/R  
 
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  must demonstrate compliance wit h in order to have fulfilled these criteria"181, but does not explain 
why it considers that the named areas lack clarity. We are not convinced that the reference to 
customs, industry and commerce, taxation, credit and loans, inspection and quarantine, grain 
distribution, and environmental protection lacks clarity. Nor are we convinced that it is necessary to 
identify each and every specific regulation with which applicants must comply. However, we agree 
with the United States that the reference to "other area s" is vague, and also note that China's legal 
instruments contain no guidance regarding the scope of such "other areas". The inclusion of this 
open-ended category could lead to applicants being disqualified for having a record of violation in 
any area of r egulation, even those unrelated to China's wheat, rice , and corn  TRQs. 
7.41.   Due to the vagueness in the reference to "other areas", we find the criterion of having no 
record of violation to be inconsistent with the obligation to administer TRQs on a transparent  basis 
because this particular element  is not easily understood or discerned by applicants and other 
interested parties. Similarly, we find this criterion to be inconsistent with the obligation to administer 
TRQs on a predictable basis because it does not allow applicants and other interested parties to 
easily anticipate how the NDRC determines applicants ' record of violation in "other areas", and thus 
their eligibility to receive TRQ allocations . Finally, we also find this criterion to be inconsistent with  
the obligation to administer TRQs using clearly specified requirements because, insofar as the 
vagueness of the term "other areas" is concerned, the requirements that this criterion entails are 
not set out in plain or obvious detail.  
7.42.   The United States arg ues that the vagueness in this criterion also leads to a violation of the 
obligation to administer TRQs on a fair basis. In this regard, the United States submits the same 
arguments as those concerning the criteria of possessing a good integrity situation and having 
fulfilled social responsibilities associated with their operations .182 For the reasons explained in 
paragraphs 7.32 through 7.35 above, we disagree with these  argument s, and consider that the 
United States has not made a prima facie  case that China has violated this obligation.  
7.43.   Having concluded our assessment of the United States' claims  regarding the four basic 
eligibility criteria at issue, we now turn to China's statement regarding the NDRC's practice in the 
assessment of applica nts' eligibility to receive TRQ allocations . The United States claims that this 
stated practice violates the obligations to administer TRQs on a transparent, predictable, and fair 
basis, and to use clearly specified requirements.  
7.44.   At the outset, we recall that the 2017 Allocation Notice contains eight basic eligibility criteria, 
one of which is "not having been placed on a 'Credit China' website blacklist [of entities] receiving 
punishment".183 China explains that the NDRC , in practice, does not conduct an individual 
assessment of each of these criteria but rather  generates an applicant's credit report through 
Credit  China by using the uniform social credit code that is provided by each applicant in its 
application. China explains that the credit report contains a multitude of information such as "general 
registration information of the ent erprise; the administrative licen ses acquired by the enterprise; 
the administrative punishments received by the enterprise; and whether the enterprise is on the 
Good Credit List, Watch List, or Black List" . China also states that only the blacklist  is cons idered in 
determining an applicant's eligibility.184 The blacklist is a list of enterprises with a record of 
non-compliance in a range of areas, but China explains that only records of violations with industry 
and commerce registration, tax  payments, customs , or court judgments  within the previous two 
years will render an applicant  ineligible to receive TRQ allocations.185 China also  explains that any 
instance of non -compliance disqualifies an applicant from being eligible to receive TRQs.186 
                                                
181 United States' first written submission, para. 82. See also ibid. para. 123.  
182 United States' first written submission, paras. 15 7-159. 
183 2017 Allocation Notic e, (Exhibit USA -15), Article II.  
184 China's response to Panel question No. 8(c), para. 24.  
185 China's first written submission, para. 14 ; and response to Panel question No. 48, para. 9 and 
No. 49, para. 11.  
186 China's response to Panel question No. 8(d), para . 25. China further explains  that the NDRC 
determines applicants' eligibility to receive TRQ allocations not only by checking Credit China's blacklist, but 
also by checking (i) whether the applicant has attested to the accuracy of the information submitted  in its 
application; and (ii) whether the applicant has prior violations of the 2003 Provisional Measures.  (China's 
response to Panel question No. 47, para. 8. See also China's first written submission, para. 35 ). However, 
these two additional steps are no t relevant to the resolution of the present claims that concern the obligations 
to administer TRQs on a transparent, predictable, and fair basis, and to use clearly specified requirements.  WT/DS517/R  
 
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  7.45.   In other words, acco rding to China , the NDRC , in practice,  bases its eligibility assessment on 
whether an applicant appears in Credit China's blacklist  and does not examine whether the applicant 
meets the other basic eligibility criteria set out in the 2017 Allocation Notice.  In response to a 
question, China points out that this practice is "confirmed by NDRC officials".187 However, China has 
not submitted evidence showing that applicants and other interested parties are made aware of this 
practice. We th us agree with the United  States that this practice is not easily understood or discerned 
by applicants and other interested parties . Accordingly, we find it shows that China fails to administer 
its TRQs on a transparent basis. Similarly, we do not consider that applicants and oth er interested 
parties  can easily anticipate that the NDRC , in practice , determines applicants' eligibility to receive 
TRQ allocations based on whether they appear in Credit China's black list and not based on an 
assessment of the remaining basic eligibilit y criteria. Accordingly, we find that the NDRC's stated 
practice shows that China fails to administer its TRQs on a predictable basis.  We also do not consider 
that this practice  is set out , in China's legal instruments or elsewhere,  in plain or obvious detail. 
Accordingly, this practice shows that China fails to administer its TRQs using clearly specified 
requirements.  
7.46.   We also consider that this practice renders China's TRQ administration inconsistent with the 
obligation to administe r TRQs on a fair basis. As noted in paragraph 7.9 above, this obligation  
requires that China administer s its TRQs through a system that is impartial and equitable , and that 
the relevant authorities administer TRQs in accordance with the applicable rules and standards . 
Above, we have found unconvincing the United States' argument that vagueness in the four eligibility 
criteria at issue renders China's TRQ administrat ion inconsistent w ith the fairness obligation  set forth 
in Paragraph 116. However, the disparity between what is written in China's legal instruments and 
what the NDRC does in practice with regard to the basic eligibility criteria does not represent 
admini stration in accordance with the applicable rules and standards. On this basis, we find that 
China fails to admi nister its TRQs on a fair basis . 
7.1.4.1.5   Conclusion  
7.47.   For the reasons set out above, and taking into account China's acknowledgement that the 
basic eligibi lity criteria need to be updated, we find that the four basic eligibility criteria challenged 
by the United States are inconsistent with the obligations, set forth in Paragraph 116 of China's 
Working Party Report, to administer TRQs on a transparent, predi ctable, and fair basis, and to use 
clearly specified requirements.  
7.1.4.2   Allocation principles and reallocation procedures  
7.1.4.2.1   Introduction  
7.48.   The United States c laims  that the allocation principles are inconsistent with four obligations 
set forth in Paragraph 116, nam ely, the obligations to administer TRQs on a transparent, predictable, 
and fair basis, and to use clearly specified admini strative procedures. The United  States also claims  
that the reallocation procedures are inconsistent with the obligation to administer  TRQs using clearly 
specified administrative procedures.  China rejects the entirety of the United States' claims.  
7.49.   Below, we describe the allocation principles and reallocation procedures at issue and 
summarize the parties' main arguments. We then proceed t o assess whether the allocation principles 
and reallocation procedures are inconsistent with the obligations the United States has invoked, 
taking into account our understanding of the meaning and nature of each of the relevant obligations 
laid out in paragraph  7.9 above.  
7.1.4.2.2   Allocation principles and reallocation procedures at issue  
7.50.   Once the NDRC has determined which applica nts are eligible to receive TRQ allocations , it 
allocates the TRQ amounts among the eligible applicants in accordance with t he allocation principles , 
set out in the annual allocation notices published by the NDRC. The 2017 Allocation Notice prescribes 
that the TRQ amounts will be allocated : 
                                                
187 China's response to Panel question No. 8(a), para. 22.  WT/DS517/R  
 
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  [I]n accordance with applicants' actual production and operating capacities (including 
historical production and processing, actual import performance, and operati ng 
situation, etc. ) and other relevant commercial standards.188 
7.51.   For the reallocation of unused TRQs amounts that are returned by recipients before 
15 September, the NDRC follows the reallocation procedures. These  are set out in different parts of 
China's legal instruments. Article 26 of the 2003 Provisional Measures provides that "[t]ariff -rate 
quota rea llocated quantities are allocated in accordance with the application criteria promulgated 
and according to the first -come -first-served method".189 The 2017 Reallocation Notice states, in 
relevant parts:  
The National Development and Reform Commission and the Ministry of Commerce will 
carry out reallocation of quotas returned by users according to the order in which 
applications were submitted online. …  
When the number of applications that meet the criteria, in total, is smaller than the 
reallocated tariff -rate quota quantity, every applicant 's application can be satisfied; 
when the number of applications that meet the criteria, in total, is larger than the 
reallocated tariff -rate quota quantity, reallocation will be carried out according to the 
Allocation Princ iples and the Allocation Rules .190  
7.1.4.2.3   Main arguments of the parties  
7.52.   With respect to the allocation principles , the United States points to the lack of explanation o f 
two elements , namely, the NDRC's evaluation of applicants' "actual production and operating 
capacities (including historical production and processing, actual import performance, and 
operations)"191, and the meaning of the term "other re levant commercial standards" as well as  the 
factors covered by this term.192 With respect to the first element , the U nited States maintains that  
China's legal instruments  do not clear ly explain  how the NDRC evaluates applicants' actual 
production and operating capacities  and weighs the listed factors .193 With respect to the second 
element , the United States submits that th e term "other relevant commercial standards" suggests 
that the NDRC, in making allocations, takes into account factors other than those that are clearly 
cited in China' s legal instruments , without any clarification of the factors and types of information 
the NDRC may take into account .194 For these reasons, the United States contends that the allocation 
principles are inconsistent with the obligations, set forth in Paragraph 116, to administer TRQs on a 
transparent, predictable, and fair basis, and to use clearly specified administrative procedures.195 
7.53.   China states  that, in practice, "'actual import performance' is the factor given the most weight 
in NDRC's allocation analysis"196 and that "[n]ew applicants are only considered in the event that 
the entire non -STE portion of the TRQs is not fully allocated to applicants with historic import 
performance", in which case "information concerning production capacity is a key factor".197 In 
China's view, these principles are sufficiently clear since Paragraph 116 does not r equire China to 
eliminate any element of discretion from its TRQ allocation process.198 China further argues that 
allocation in accordance with "other relevant commercial standards" is consistent with 
Paragraph  116 since China's Schedule CLII explicitly refers to allocation of TRQ  amounts  on this 
                                                
188 2017 Allocation Notice, (Exhibit USA -15), Article IV.  
189 2003 Provisional Measures, (Exhibit USA -11), Article 26.  
190 2017 Reallocation Notice, (Exhibit USA -17), para. 5.  (emphasis original)  
191 United States' first written submission, para. 87.  
192 United States' fir st written submission, para. 88.  
193 United States' first written submission, para. 87; and second written submission, para. 17.  
194 United States' first written submission, para. 88; and second written submission, para. 18.  
195 United States' first written submission, paras. 96, 126 -129, 133, 155 -156, 170 -171, and 174.  
196 China's first written submission, para. 49. See also China's first written submission, para. 17.  
197 China's first written submission, para. 50. See also China's first written submissi on, para. 17.  
198 China's first written submission, para. 51. See also China's first written submission, para. 17.  WT/DS517/R  
 
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  basis.199 Finally, China argues that Paragraph 116 does not require it "to make applicants aware of 
how NDRC evaluates individual applications, including the weight assigned to particular factors".200 
7.54.   In response, the United States submits that China has not substantiated its assertions 
regarding the NDRC 's practice201, and that, in any event, the discrepancy between China's legal 
instruments and the stated  practice of the NDRC further supports its claim of inconsistency of the 
allocation principles  with the obligations  to administer TRQs on a transparent, predictable, and fair 
basis.202  
7.55.   With respect to the reallocation procedures , the United States points out that the annual 
reallocation notices state that th e NDRC will reallocate returned TRQ  amount s "according to the 
order in which applications were submitted online" and that  "[w]hen the total sum of qualified 
application amounts is greater than the tariff quota reallocation amount, the reallocation will be  
carried out according to the Allocation Principles".203 The United States argues that , since reallocation 
is based on the allocation principles and these are not defined or explained in China's legal 
instruments, the procedures for reallocation are also not  clearly specified.204 
7.56.   China argues that this claim has no basis because the allocation principles are not used by 
the NDRC during the reallocation process and that reallocation is done on a first -come, first -served 
basis.205 
7.57.   In response, the United States mai ntains that the 2017 Reall ocation Notice references both 
the first-come, first -served method and reallocation according to the allocation principles, and that 
therefore China's administrative procedure s for reallocation are  not clearly specified in its leg al 
instruments.206 
7.1.4.2.4   Analysis by the Panel  
7.58.   The United States claims that the allocation principles are inconsistent  with four obligations 
set forth  in Paragraph 116 , namely the obligations to administer TRQs on a transparent, predictable, 
and fair basis, and t o use clearly specified administrative procedures.  The United States also claim s 
that the reallocation procedures are inconsistent with the obligation to administer TRQs using clearly 
specified administrative procedures . We first assess the claims concerni ng the allocation principles, 
followed by the claim concerning the reallocation procedures.  
7.1.4.2.4.1   Allocation principles  
7.59.   In this section, we first assess the United States' claims in respect of the allocation principles 
set out in China's legal instruments. Thereafter, we examine the implications of China's statement 
regarding how the NDRC conducts the allocation process  in practice.  
7.60.   The United States claims that the allocation principles in China's legal instruments violate the 
obligations to administer TRQs on a transparent,  predictable , and fair  basis, and to use clearly 
specified administrative procedures . In support of these claims, the United States focuses on two 
elements in the allocation principles .  
7.61.   First, the United States points to the reference to "actual production and operating capacities 
(including historical production and processing, actual import performance, and operations)". While 
the United States does not take issue with the factors  themselves , it submits that Paragraph 11 6 
                                                
199 China's first written submission, para. 53 (quoting China's Schedule CLII, Part I, Section IB (Most -
Favoured -Nation Tariff, Agricultural Prod ucts, Tariff Rate Quotas), (Exhibit USA -23), para . 6.[C]).  
200 China's response to Panel question No. 10(b), para. 37. See also China's response to Panel question 
No.  24(a), para. 68.  
201 United States'  opening statement at the second meeting of the Panel, pa ras. 3 and 16.  See also 
United States' response to Panel question No. 45, paras. 1 -2. 
202 United States' opening statement at the first meeting of the Panel, paras. 11 and 29; and response 
to Panel question No.  19(b), para. 55.  See also United States' respon se to Panel question No. 45, para. 3.  
203 United States' first written submission, para. 168 (quoting 2017 Reallocation Notice, (Exhibit USA -
17). 
204 United States' first written submission, para. 169.  
205 China's response to Panel question No. 52(b), para. 15.  
206 United States' response to Panel question No. 64, para. 20.  WT/DS517/R  
 
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  requires China to not only list the relevant factors for allocation but also to specify how each of these 
factors is evaluated.207 We find the United States' interpretation of Paragraph  116 too stringent 
insofar as it would prevent China from having in pla ce a system of TRQ allocation where the 
authorities take into account all factors listed in their legal instruments and decid e how much weight 
to accord to them in light of the relevant circumstances.  
7.62.   The United States has not explained  why the listing in  China's legal instruments of the factors 
that the NDRC takes into account in the allocation process does not allow applicants and other 
interested parties to easily understand or discern the basis for that process, and why the legal 
instruments should als o specify how each factor is to be evaluated and what weight each factor will 
be accorded. Thus, we do not consider that the United States has demonstrated that this element 
of the allocation principles violates the obligation to administer TRQs on a trans parent basis. 
Similarly, the United States has not explained  why the listing of the relevant factors in China's legal 
instruments does not allow applicants and other interested parties to easily anticipate how the NDRC 
will allocate TRQ amounts. Thus, we d o not consider that the United States has demonstrated that 
this element of the allocation principles violates the obligation to administer TRQs on a predictable 
basis. Finally, the United States has  not established  that the allocation principles are not s et out in 
plain or obvious detail in China's legal instruments. Thus , we do not consider that the United States 
has demonstrated that this element of the allocation principles violates the obligation to administer 
TRQs using clearly specified administrativ e procedures.  
7.63.   Second, the United States argues that China's legal instruments do not explain what "other 
relevant commercial standards" entail, and that therefore applicants cannot discern how fulfilment 
of such standards may be demonstrated.208 We agree wit h the United States' view that this is a  
vague and open -ended  term that could cover a multitude of factors, which are unknown to  applicants 
and other interested parties. In response to the United States' argument, China points out that this 
term also appea rs in China's Schedule CLII209, which reads, in relevant parts:  
In the first year, allocations to end users by the SDPC of the tariff -quotas … shall be 
based on a first -come, first -served system or the requests of the applicants and their 
historical import p erformance, production capacity, or other relevant commercial criteria  
subject to specific conditions to be published one month in advance of the opening of 
the application period so as to ensure an equitable distribution and complete tariff -quota 
utilizat ion.210  
7.64.   This part of China's Schedule CLII concerns the  allocation of TRQ amounts in the first year. 
We agree with the United States that the inclusion of the term " other relevant commercial criteria " 
in China's Schedule CLII does not "shield" China from co mplying with the obligation s under 
Paragraph  116 to administer its TRQs on a transparent and predictable basis and to use clearly 
specified administrative procedures.211 Nor does it diminish th ese obligation s. A harmonious 
interpretation of China's obligations in its Schedule CLII a nd those  in Paragraph 116 suggests that 
the former sets out different permitted method s for China's allocation of TRQ amounts  and that the 
latter imposes obligation s on China to administer its chosen method of TRQ allocati on on a 
transparent and predictable basis and to use clearly specified administrative procedures . As pointed 
out by the United  States, this view is supported by the language of China's Schedule CLII, which 
adds that China's chosen method of TRQ allocation is "subject to specific conditions to be published 
one month in advance of the opening of the application period so as to ensure an equitable 
distribution and co mplete tariff -quota utilization ".212 
7.65.   China also submits that the inclusion of the residual catego ry "other relevant commercial 
standards " provides the NDRC with the discretion it needs to adapt its allocation decisions to 
particular factual circumstances, and that this is common practice among WT O Members, including 
the United  States.213 We note  that th e present claim has been brought under China' s Working Party 
                                                
207 United States' first written submission, para. 87; and second written submission, paras. 16 -17. 
208 United States' first written submission, para. 88; and second written submission, para. 18.  
209 China's first written submission, para. 53; second written submission, para. 31.  
210 China's Schedule CLII, Part I, Section IB (Most -Favoured -Nation Tariff, Agricultural Products, Tariff 
Rate Quotas), (Exhibit USA -23), paras. 6.B and 6.C.  (emphasis added)  
211 United States' second written submission, para. 18.  
212 United States' response to Panel question No. 24(a), paras. 94 -96; and second written submission, 
para. 18.  
213 China's first written submission, paras. 54 -55. WT/DS517/R  
 
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  Report, which contains specific obligations undertaken by China  with regard to its TRQ 
administration.  We agree with China that we should not read Paragraph 116 so as to preclude the 
relevant aut horities from having any discretion in administering TRQs. Indeed, it is for this reason 
that we have found that China is not required to set out, in its legal instruments, the precise manner  
in which its authorities evaluate relevant factors in allocating  the TRQ amounts. This does not, 
however, provide China's relevant  authorities with unfettered discretion. In allocating TRQ amounts, 
the NDRC is bound by the obligations set forth in Paragraph 116. The inclusion of the vague notion  
"other commercial stand ards" runs counter to those obligations because it may potentially entail a 
range of factors that cannot easily be understood or discerned by ap plicants and  other interested 
parties. In our view, this violates China's  obligation to administer its TRQs on a  transparent basis. 
For the same reasons, we ar e of the view that applicants and  other interested parties cannot easily 
anticipate  what information the NDRC will take into account in allocating TRQ a mounts , and that 
therefore China also fails to administer  its TRQs on a predictable basis. Similarly, we find th at the 
vagueness of this notion  shows that China fails to administer its TRQs using clearly specified 
administrative procedures because the procedures concerning the allocation of TRQs are not set out 
in plain or obvious detail in China's legal instruments.  
7.66.   The United States argues that the vagueness in the allocation principles also leads to a 
violation of the obligation to administer TRQs on a fair basis. As explained above, we consider this 
obligatio n to require that China administer its TRQs in an impartial and equitable manner, and that 
the Chinese authorities act in accordance with the applicable rules and standards .214 While we have 
found that the reference to "other commercial standards" in the all ocation principles is vague and 
therefore in violation of China's obligations to administer its TRQs on a transparent and predictable 
basis, and to use clearly specified administrative procedures, we do not believe that this vagueness, 
in and of itself, is  sufficient to demonstrate that China does not administer its TRQs on a fair basis. 
The United States' claim concerning the fairness of the allocation principles is premised on the 
argument that the vagueness in these principles may cause applicants to submit different 
information which , in turn, would cause the NDRC to allocate TRQ amounts  to different applicants 
based on different types of information.215 As we discussed in addressing the fairness of the basic 
eligibility criteria216, the application form attached to the 2017 Allocation Notice requires all 
applicants to submit a list of specific information , and does not provide applicants with the possibility 
of submitting additional information, including informat ion they may believe is relevant to TRQ 
allocation. Once again, we do not consider plausible the United States' argument that applicants 
may nonetheless submit "different information in support of the listed principles", or that applicants 
may allow the va gueness in the term "other commercial standards" to influence their decisions on 
whether to apply for TRQs and what TRQ amount s to apply for.217 We therefore consider that the 
United States  has not made a prima facie  case that the vagueness in  allocation pri nciples laid down 
in China's legal instruments lead s to a violation of China's  obligation to administer its TRQs on a fair 
basis.  
7.67.   Having concluded our assessment of the United States' claim s regarding the allocation 
principles  in China' s legal instruments , we now turn to China's statement regarding how the NDRC 
conducts its allocation process  in practice. The United States claims that this stated practice violates 
the obligations to administer TRQs on a transparent, predictable , and fair basis.  
7.68.   China states  that, in practice, the NDRC gives the most weight to actual import performance, 
and that new applicants are only considered in the event that the entire non -STE portion s of the 
TRQs are  not fully allocated to applicants with historic import performance, i n which case information 
concerning production capacity is a key factor.218 In response to  a question, China points out that 
the existence of this practice  is "confirmed by NDRC officials ".219 However, China has not submitted 
evidence showing that applicants a nd other interested parties are made aware of this practice. The 
United States submits that the NDRC's stated practice regarding the allocation principles further 
supports its claims that China has violated its  obligations to administer TRQs on a transpare nt, 
predictable, and fair basis.220 
                                                
214 See para. 7.9 above.  
215 United States' first written submission, paras. 155 -156. 
216 See paras. 7.32-7.35 above.  
217 See United States' response to Panel question No. 65(b), paras. 29 -30. 
218 China' s first written submission, paras. 17 and 49 -50. 
219 China's response to Panel question No. 10(a), para. 36.  
220 See United States' response to Panel question No. 19(b), para. 55.  WT/DS517/R  
 
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  7.69.   Above, we have found that it is permissible for China to have in place a system of TRQ 
allocation where all relevant factors are listed in the legal instruments and the authorities take into 
account all listed factors  and decid e how much weight to accord to them in light of the relevant 
circumstances.221 China's explanation of the NDRC's practice , however,  suggests that the NDRC, in 
making allocation decisions, does not take into account all the factors listed in the annual allocation 
notices, and that actual import performance supersedes all the other factors. China explains that, 
under this practice, an appli cant without actual import performance does not receive a TRQ allocation 
at all regardless of its actual production and operating capacities, except where the TRQ amounts  
are not fully allocated to applicants with actual import performance.222 Applicants and other 
interested parties are , however,  not put on notice of this practice. We thus agree with the United 
States that this practice is not easily understo od or discerned by applicants and  other interested 
parties. Accordingly, we find it shows that China f ails to administer its TRQs on a transparent basis. 
Similarly, we do not consider that applicants and other interested parties can easily anticipate  that, 
in practice, actual import performance supersedes all other factors . Nor can they easily anticipate  
that applicants without actual import performance would  not receive TRQ allocations unless the 
entire non -STE portion s are  not fully allocated to applicants with actual import performance. 
Accordingly, we find that the NDRC's stated practice shows that China fails to administer its TRQs 
on a predictable basis.  
7.70.   We also consider that this practice renders China's TRQ administration inconsistent with its 
obligation to administer TRQs on a fair basis. As noted in paragraph 7.9 above , this obligation  
requires  that China administer s its TRQs through a system that is impartial and equitable , and that 
the relevant authorities administer TRQs in accordance with the applicable rules and standards.  
Above, we have found unconvincing the United States' argume nt that the vagueness in the allocation 
principles  render s China's TRQ administration inconsistent with the fairness obligation  in 
Paragraph  116. However, the disparity between what is written in China's legal instruments and 
what China states that the NDRC does in practice in allocati ng TRQ amounts  does not represent 
administration in accordance with the applicable rules and standards. On this bas is, we find that 
China fails to admi nister its TRQs on a fair basis . 
7.1.4.2.4.2   Reallocation procedures  
7.71.   The United States claims that the reallocation procedures in China's legal instruments violate 
the obligation to administer TRQs using clearly specified administra tive procedures. In this regard, 
the United States points to the 2017 Reallocation Notice, arguing that this instrument suggests that 
"reallocation will be carried out according to the Allocation Principles  and the Allocation Rules ".223 
Following China's exp lanation that the NDRC, as set out in the 2003 Provisional Measures, reallocates  
returned  TRQ amounts based on the first -come, first -served method, rather than the allocation 
principles224, the United States argues that the reference to two different methods  in the 
2017 Reallocation Notice and the NDRC's alleged practice of using only the first -come, first -served 
method demonstrate China's violation of the obligation in Paragraph 116 to administer TRQs using 
clearly specified administrative procedures.225 
7.72.   While the 2003 Provisional Measures, reproduced in paragraph 7.51 above, clearly set out the 
first-come, first -served method as the sole reallocation method, the 2017 Reallocation Notice, also 
reproduced in paragraph 7.51 above, is less clear. It first states that the NDRC "will carry out 
reallocation of quotas returned by users according to the order in which applications were submitted 
online", which, as suggested by both parties226, could be viewed as a reference to the first -come, 
first-served method. It, however, goes on to state that "when the number of appli cations that meet 
the criteria, in total, is larger than the reallocated tariff -rate quota quantity, reallocation will be 
carried out according to the Allocation Principles  and the Allocation Rules ", which the United States 
                                                
221 See para. 7.61 above.  
222 China's first written submission, para. 50. See also China's first written submission, para. 17.  
223 United States' first written submission, paras. 168 -169 (quoting 2017 Reallocation Notice, (Exhibit 
USA-17)). (emphasis origina l) 
224 China's responses to Panel question No. 11, para. 41; and No. 52(b), para. 15.  
225 United States' response to Panel question No. 64, paras. 20 -21; and comments on China's response 
to Panel question 52, para. 10.  
226 United States' response to Panel questi on No. 64, para. 20; and China's response to Panel question 
No. 11, para. 41).  WT/DS517/R  
 
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  understands to be a reference to  the allocation principles, set out in Article IV of the 2017 Allocation 
Notice.227 
7.73.   The United States presents claims against China's TRQ administration as spelled out in the 
various legal instruments adopted by China as well as the practice of the relevant Chinese 
authorities. Therefore, we base our assessment of these claims on the entirety of the various 
elements making up China's TRQ administration . With respect to the reallocation procedures, while 
the use of the first -come, first -served method is clearl y specified in the 2003 Provisional Measures228, 
the clarity of this aspect of China's TRQ administration is, in our view, diminished by the vagueness  
in the 2017 Reallocation Notice. The latter contains only an indirect reference to the first -come, 
first-served method but an explicit reference to the allocation principles.229 An assessment of t he 
ensemble of China's legal ins truments therefore shows that the reallocation procedure s are not set 
out in plain or obvious detail, in violation of the obli gation to a dminister TRQs using clearly specified 
administrative procedures.  
7.1.4.2.5   Conclusion  
7.74.   For the reasons set out above, we find that the allocation principles are inconsistent with the 
obligations, set forth in Paragraph 116  of China's Working Party Report , to adminis ter TRQs on a 
transparent, predictable, and fair basis, and to use clearly specified administrative procedures. We 
also find that the reallocation procedures are inconsistent with the obl igation, set forth in 
Paragraph  116, to administer TRQs using clearly  specified administrative procedures.   
7.1.4.3   Public comment process  
7.1.4.3.1   Introduction  
7.75.   The United States claims  that the public comment process is inconsistent with four obligations 
set forth in Paragraph 116, namely the obligations to administer TRQs on a transparent, predictable, 
and fair basis, and to use clearly specified administrative procedures. China reject s the entirety of 
the United States' claims.  
7.76.   Below, we describe the public comment process at issue and summarize the parties' main 
arguments. We then assess whether the public comment process is inconsistent with the four 
obligations the United States has  invoked, taking into account our understanding of the meaning 
and nature of each of the relevant obligations as laid out in paragraph  7.9 above.  
7.1.4.3.2   Public comment pro cess at issue  
7.77.   The public comment pr ocess is mentioned only in the announcement of applicant enterprise 
data, which the NDRC publishes on its website after the receipt of TRQ applications in a given year . 
It includes a list of TRQ applicants as well as the  relevant  information they have submitted to 
the NDRC in their applications.230 The announcement indicate s that the public is invited to provide 
"feedback with relevant opinions" if they disagree with the data  applicants have submitted.231 Neither 
the announcements of applicant enterprise data nor any other of the relevant legal instruments 
provide further information on the public comment process.  
                                                
227 United States' response to Panel question No. 64, para. 20.  
228 China's comments on the United States' response to Panel question No. 64, para. 47.  
229 The 2017 Reallocation Notice contains the following definition: "the Application Crit eria and Allocation 
Principles for Import Tariff -Rate Quotas for Cotton in 2017  (National Development and Reform Commission 
2016 Public Notice No. 23, hereinafter referred  to as the 'Allocation Principles')". (2017 Reallocation Notice, 
(Exhibits USA -17)). (emphasis original)  
230 2017 Announcement of Applicant Enterprise Data, (Exhibit USA -19). See also 2016 Announcement of 
Applicant Enterprise Data, (Exhibit USA -20). 
231 2017 A nnouncement of Applicant Enterprise Data, (Exhibit USA -19). See also 2016 Announcement of 
Applicant Enterprise Data, (Exhibit USA -20). WT/DS517/R  
 
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  7.1.4.3.3   Main arguments of the parties  
7.78.   The United States argues that the p ublic comment process runs counter to the obligation s to 
administer TRQs on a transparent232 and predictable233 basis and to use clearly specified 
administrative procedures234 because China's legal instruments do not clarify how the  NDRC 
evaluates the informatio n received from the public, whether the NDRC informs  applicants of any 
comments, and whether applicants have an opportunity to rebut such comments . The United  States 
also argues that China fails  to administer TRQs on a fair basis because, given the lack of  clarity on 
how the NDRC treats information received from the public and whether applicants have an 
opportunity to rebut it, that information "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" .235 
7.79.   China rejects the United States' claims and argues that Paragraph 116 does not require that 
all the procedures that are part of  the public comment process be spelled out in the legal 
instruments.236 According to China, the public comment process serves as "an additional means for 
NDRC to verify the data that it receives from applicants".237 China asserts that, in practice, applicants 
are informed of the public's comments and provided with an opportunit y to rebut such comments, 
and that comments that are not relevant to the applicants' eligibility will not be taken into account.238 
China also submits that "[t]he existence of the public comment process is clear on the face of the 
measures" and that the Unit ed States has not presented evidence showing that there has been 
actual confusion on the part of applicants about the public comment process or that an applicant 
sought clarification concerning this process, which was not provided.239 
7.1.4.3.4   Analysis by the Panel  
7.80.   The United States claims that the public comment process violates  the obligations to 
administer TRQs on a transparent, predictable and fair basis, and to use clearly specified 
administrative procedures . The United States contends that the public comment pro cess does not 
allow applicants to know whether the  NDRC has received comments from the public about their 
applications, and if so, whether they will have an opportunity to rebut any such comments.  
7.81.   China's legal instruments do not provide any clarity on the se aspects of the public comment 
process. China asserts that, in practice, applicants are informed of the public 's comments received, 
and are provided with an opportunity to rebut such comments.240 However, China has not submitted 
evidence of the existence o f this alleged practice, except stating that " [t]he existence of this practice 
has been confirme d by NDRC officials ".241 We do not consider this statement, alone, to be sufficient 
to substantiate China's assertion about the exi stence of a mechanism whereby a pplicants are 
informed of  the public's comments on their applications and have an opportunity to rebut such 
comments.  In any case, the thrust of the United  States' claim is the lack of clarity in the public 
comment process, and the fact that applicants and  other interested parties do not know whether 
China's TRQ administration requires the NDRC to verify the public's comments and to provide 
applicants the opportunity to rebut such comments. We now turn to the United States' specific claims 
about the public comment process.  
7.82.   Starting with the obligation to administer TRQs on a transparent basis, we note that the 
annual announcements of applicant enterprise data explicitly set out the possibility for the public to 
provide comments, but contain no language on any potential subsequent verification process and 
whether the NDRC allows applicants  the opportunity  to rebut such comments. The absence of this 
                                                
232 United States' first written submission, paras. 93 -96. 
233 United States' first written submission, paras. 122 and 128.  
234 United States' first written submission, para. 173; and second written submission, paras. 97 -98. 
235 United States' first written submission, para. 160.  
236 China's first written submission, para. 115.  
237 China's first written submission, para. 113.  
238 China's first written submission, paras. 113 -114 and 117.  
239 China's first written submission, paras. 114 -115. 
240 China's first written submission, para. 113.  
241 China's response to Panel question No. 9(a), para. 29. We asked China how this confirmation was 
communica ted, and whether there was official record of it. In response, C hina pointed out that the 
confirmation was communicated orally to MOFCOM officials during in -person meetings with NDRC officials. 
(China's response to Panel question No. 43, paras. 3 -5.) WT/DS517/R  
 
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  important information leaves applicants and other interested parties unable to easily understand or 
discern the rules and principles through which the NDRC evaluate s comments  from the public , 
including  whether applicants  will have a chance to rebut such comments. As explained by China, the 
public's comments are relevant to the NDRC's assessment of applicants' eligibility to receive TRQ  
allocations  and to the NDRC's allocation of TRQ amounts.242 We consider that the lack of clarity 
regarding the public comment process is particularly problematic in light of the vagueness or open -
endedness of certain ba sic eligibility criteria and allocation principles that we have found to be 
inconsistent with China's various obl igations set forth  in Paragraph 116. We therefore consider that 
the public comment process is inconsistent with China's obligation to administe r TRQs on a 
transparent basis. Similarly, since applicants and other interested parties cannot easily anticipate 
whether  the NDRC will verify  comments from the public and whether it will allow applicants an 
opportunity to rebut such comments, China violate s the obligation to administer its TRQs on a 
predictable basis. We also find that,  since the procedure for public comments is not set out in plain 
or obvious detail i n China's legal instruments , this violates China's obligation to administer its TRQs 
using  clearly specified administrative procedures.  
7.83.   China  argues  that the obligations set forth in Paragraph 116 do not require that China's legal 
instruments specify all the procedures for evaluating public comments243, that the United States has 
not provided ev idence of actual confusion among applicants244, and that applicants can submit an 
inquiry for further information concerning the public comment process.245 We do not agree with 
these arguments. In our view, Paragraph 116 imposes positive obligations for China to administer 
its TRQs on a transparent and predictable basis and to use clearly specified administrative 
procedures. We do not consider that China complies with these obligations simply because applicants 
and other interested parties may be able to discov er the content and functioning of the public 
comment process by seeking out such information on their own initiative. We also do not believe 
that the United States is necessarily required to substantiate its claims under these obligations by 
providing evid ence of actual confusion among applicants and other interested parties. Rather, the 
United States may, and in our view , has, substantiated its claims through the design, architecture 
and structure of China's TRQ administration.  
7.84.   With respect to the obligati on to administer TRQs on a fair basis, we recall that this obligation  
requires  China's administration of TRQs to be impartial and equitable, and that the Chinese 
authorities act in accordance with the applicable rules and standards.246 As we have already fou nd, 
China's legal instruments do not specify whether  the public's comments will be verified  and whether 
applicants will be given an opportunity to rebut such comme nts. Further, as China acknowledges, 
any member of the public, including competing applicants  and other entities or people with an 
interest in impairing an applicant's opportunity to receive a TRQ allocation, may submit comments.247 
A system that allows ent ities with conflicting interests to comment on the information provided by 
applicants but does not clarify whether those applicants or other interested parties have an 
opportunity to learn  about  such comments and to rebut  them, cannot, in our view, be considered 
impartial and equitable.  Thus, we find that the public comment  proce ss violates China's obligation 
to administer its TRQs on a fair basis.  
7.1.4.3.5   Conclusion  
7.85.   For the reasons set out above , we find that the public comment process is inconsistent with 
the obligations, set forth in Paragraph 116 of China's Working Party Report, to a dminister TRQs on 
a transparent, predictable, and fair basis, and to use clearly specified administrative procedures.  
                                                
242 China's first written submission, para. 15; and response to Panel question No. 55(e), para. 27.  
243 China's first written submission, para. 115.  
244 China' s first written submission, para. 114; and opening statement at the first meeting of the Panel, 
paras. 16 and 19.  
245 China' s second written submission, para. 59.  
246 See para. 7.9 above.  
247 China's response to Panel question No. 9(d), para. 31  WT/DS517/R  
 
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  7.1.4.4   STE and non -STE portions  of TRQs  
7.1.4.4.1   Introduction  
7.86.   The United States claims  that China's administration of STE and non -STE portions of its whea t, 
rice, and corn TRQs violates five obligations under Paragraph 116, namely the obligations to 
administer TRQ s on a transparent, predictable , and fair basis, to use clearly specified administrative 
procedures, and to administer TRQs in a manner that would  not inhibit the filling of each TRQ.  China 
rejects the entirety of the United States'  claims.  
7.87.   Below, we describe the relevant provisions of China's legal instruments concerning STE and 
non-STE portions of TRQs and summarize  the parties' main arguments. We  then assess whether 
China' s administration of STE and non -STE portions of TRQs is inconsistent with the five obligations 
the United States invok es, taking into account our understanding of the meaning and nature of each 
of the relevant obligations laid out in paragraph  7.9 above.  
7.1.4.4.2   Provisions  at issue concerni ng STE and non -STE portions of TRQs  
7.88.   Article 4 of the 2003 Provisional Measures divides China's wheat, rice , and corn TRQs into STE 
and non -STE portions and the annual allocation notices set out the portions of TRQs reserved for 
importation through STEs in any given year. In the 2017 Allocation Notice, the STE portions of TRQs 
are set out as follows:  
The 2017 grain import tariff -rate quota quantities are: wheat – 9.636 million tons, with 
a state trading proportion of 90%; corn – 7.20 million tons, with a sta te trading 
proportion of 60%; [] rice – 5.32 million tons (of which: 2.66 million tons of long -grain 
rice and 2.66 million tons of medium - and short -grain rice), with a state trading 
proportion of 50%.248 
Neither the 2003 Provisional Measures nor the 2017 Al location Notice contains further provisions 
concerning  the allocation of STE and non -STE portions of TRQs.  
7.89.   Article 4 of the 2003 Provisions Measures sets out the following procedures for importation of 
goods under STE and non -STE portions of TRQs:  
State t rading quotas must be imported through state trading enterprises; non -state 
trading quotas are imported through enterprises that have trading rights, and end -users 
that have trading rights may also import by themselves.249 
It is undisputed that COFCO  is the only designated STE for grains.250 
7.90.   Article 22 of the 2003 Provisional Measures sets out the following procedure for recipients of 
STE portions of TRQs that have not signed a contract for impo rtation with an STE prior to 15  August:  
With respect to state trading agricultural product import tariff -rate quota quantities 
allocated to end -users, in the event that a contract has not been signed prior to 
August  15 of the current year, upon seeking approval from the Ministry of Commerce 
or NDRC according to the administrative jurisdiction set forth in Article 7 of these 
Measures , the end -user is permitted to entrust any enterprises that have trading rights 
to import; end -users that have trading rights may also import by themselves.251  
7.1.4.4.3   Main arg uments of the parties  
7.91.   First, the United States points to China's use of a "single application process" for allocating 
STE and non -STE portions of TRQs. Since applicants are n either  able to request one or the other 
                                                
248 2017 Allocation Notice, (Exhibit US A-15), Article I.  
249 2003 Provisional Measures, (Exhibit USA -11), Article 4.  
250 Catalogue of Import State Trading Enterprises, (Exhibit USA -14). See also China's first written 
submission, para. 9; and United  States' first written submission, para. 19.  
251 2003 Provisional Measures, (Exhibit USA -11), Article 22. (emphasis original)  WT/DS517/R  
 
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  portion, nor provided any information conc erning how the NDRC alloc ates these portions, the 
United  States argues that China violates its obligations to administer its TRQs on a transparent252 
and predictable basis253 and to use clearly specified administrative procedures.254 The United  States 
also argue s that the single application process inhibits the filling of each TRQ, since  "[e]ach type of 
importation process has its own costs, time constraints, and administrative burdens" and "the 
uncertainty inherent in China's process" could cause applicants not to apply for TRQs or to apply for 
smaller amounts.255 
7.92.   Second, the United States  points to the proce dure for non -STE recipients of STE portions of 
TRQs to import under such TRQs, in particular , that non -STE recipients must initially attempt to 
contract with COFCO  and, if unsuccessful by 15  August, seek approval from the NDRC to import by 
themselves or through another enterprise. In the United States' view, China violates the obligations 
to admin ister its TRQs on a predictable basis and not to inhibit the filling of each TRQ, since COFCO 
is not required to contract with non -STE recipients of STE portions of TRQs and the NDRC's approval 
to import without COFCO is not automatic. Non -STE recipients t herefore cannot predict if they will 
be able to import under STE portions allocated to them256, and may ultimately be unable to do so.257 
Non-STE recipients that a re unable to import under STE portions of their TRQ allocations  will not be 
eligible to apply for  reallocation and may face penalties for non-use of TRQ allocations  in the form 
of deductions to their allocations in the following year, adding to the lack of predictability258 and to 
the inhibiting effect of China's TRQ administration.259 The United States f urther argues that the lack 
of clarification in China's legal instruments regarding the procedure for seeking the NDRC's approval 
to import also violates China's obligation to administer its TRQs using clearly specified administrative 
procedures.260 
7.93.   China submits that all of the United States' arguments are inapposite  because the NDRC, in 
practice, allocates the entir e STE portions of TRQs to COFCO and does not require COFCO to return 
unused  TRQ amounts.261 Since non -STE applicants, in practice, receive only no n-STE portions of 
TRQs, China considers it unnecessary to provide these applicants with information regarding the 
allocation of STE portions of TRQs.262 Similarly, China considers that the United  States' concerns 
about non -STE recipients' ability to use STE portions of TRQs are "hypothetical" since non -STE 
applicants, in practice, do not receive STE portions of TRQs.263 
7.94.   In response, t he United States maintains  that China has not substantiated its assertions 
regarding the NDRC's practice, and that, in any event,  such practice further demonstrates China's 
violation of its obligations under Paragraph  116.264 More particularly, the alleged practice further 
demonstrates that China does not administer its TRQs on a transparent and predictable basis, using 
clearly specif ied administrative procedures, since it "departs" from what is stated in China's legal 
instruments.265 It also demonstrates that China does not administer its TRQs on a fair basis, since 
the NDRC does not apply the basic eligibility criteria and allocation p rinciples set out in China's legal 
instruments in allocating the entire STE portions of TRQs to COFCO , and does not subject COFCO to 
the requirement to return unused TRQ amounts.266 Lastly, the alleged practice also demonstrates 
that China's TRQ administrati on inhibits the filling of each TRQ, since the NDRC "excludes" COFCO's 
unused TRQ amounts from reallocation and thereby "prevents imports that would otherwise be 
completed by non -STE applicants".267 In response, China argues that nothing in China's Schedule 
                                                
252 United States' f irst written submission, paras. 89 -92. 
253 United States' first written submission, paras. 130 -132 and 146.  
254 United States' first written submission, para. 172.  
255 United States' first written submission, paras. 198 -199, 201, and 205 -206. 
256 United States' fi rst written submission, para. 147.  
257 United States' first written submission, paras. 201 -202. 
258 United States' first written submission, paras. 147 -148. 
259 United States' first written submission, paras. 202 -204. 
260 United States' first written submission, p aras. 174 -175. 
261 China's first written submission, para. 92.  
262 China's first written submission, paras. 94 -95 and 99.  
263 China's first written submission, paras. 96 -97. 
264 United States' second written submission, paras. 59 -60; and response to Panel question  No. 45(a), 
paras. 1 -3. 
265 United States' opening statement at the first meeting of the Panel, para. 56; and second written 
submission, paras. 69 -75. 
266 United States' second written submission, paras. 76 -78. 
267 United States' second written submission, paras. 82 -83. WT/DS517/R  
 
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  CLII or its legal instruments precludes the NDRC from allocating the entire STE portions of TRQs to 
COFCO and not requiring COFCO to return unused TRQ amounts.268 
7.1.4.4.4   Analysis by the Panel  
7.95.   Below, we assess, first, the United States ' claims  regarding the allocati on of STE and non -STE 
portions of the TRQs including the implications of China's statement concerning the NDRC's practice 
in this regard. We then address the United States ' claims  regarding  the proce dure for non -STE 
recipients of STE portions of TRQs to im port under those portions.  
7.1.4.4.4.1   Allocation  of STE and non -STE portions of the TRQs  
7.96.   We begin by assessing the parts of China' s legal instruments that pertain to the allocation of 
STE and non -STE portions of TRQs and the United States'  claims concerning  the so -called "single 
application process " for these two portions. We then assess the implications of China' s statement 
that the  NDRC, in practice, allocates the entire STE portions of TRQs to COFCO and does not require 
COFCO to return unused TRQ amounts.  
7.97.   The United States claims that the lack of clarity in China's legal instruments and the use of a 
so-called "single application pr ocess" violate the obligations to administer TRQs on a transparent 
and predictable basis, to use clearly specified administrative procedures, and to administer TRQs in 
a manner that would not inhibit the filling of each TRQ.  
7.98.   At the outset, we note that China's legal instruments explicitly distinguish between STE and 
non-STE portions of TRQs. More particularly, Article 4 of the 2003 Provisional Measures states that 
TRQs are "divided into state trading quotas and non -state trading quotas"269 and the annual 
allocation notices indicate specific STE portions of available TRQ amounts.270 Despite this, neither 
China's legal instruments nor any other document explains to applicants and other interested parties 
how the NDRC allocates these two portions of TRQs, nor are a pplicants provided the possibility to 
apply specifically for one portion or the other. We therefore consider that applicants and  other 
interested parties are unable to easily understand or  discern the set of rules or principles through 
which  the NDRC  allocates STE and non -STE portions of TRQs, in violation of China's obligation  to 
administer its TRQs on a transparent basis.  Similarly, we consider that applicants and other 
interested parties cannot easily antici pate how the NDRC allocates STE and non -STE por tions of 
TRQs, in violation of China' s obligation to administer its TRQs on a predictable basis. We also consider 
that the NDRC 's process for allocating STE and non -STE portions of TRQs is not set out in plain or 
obvious detail, in violation of China's obl igation to administer its TRQs using clearly specified 
administrative procedures.  
7.99.   The United States  also claims that the uncertainty in the NDRC's allocation of STE and non -STE 
portions of TRQs inhibits the filling of each TRQ . As argued by the United States271, the proce dures  
for importing under STE and non -STE portions of TRQs differ. More particularly, recipients of non -
STE portions may import by themselves or through another enterprise, whereas recipients of ST E 
portions must import through the  designated STE  COFCO  or, if unsuccessful by 15 August, seek the 
NDRC's approval to import by themselves or through another enterprise.272 Above we found that the 
uncertainty in the NDRC 's allocation of STE and non -STE portions of TRQs renders China' s TRQ 
administration inconsistent with the obligations to administer TRQs on a transparent and predictable 
basis, and to use clearly specified administrative procedures. However, we do not believe that the 
mere existence of such uncertainty is sufficient to demons trate that China  administers its TRQs in a 
manner that would  inhibit the filling of each TR Q. As noted by the United States273, the receipt of a 
TRQ is a benefit or commercial advantage since it allows for importation of products at a reduced 
in-quota rate. The United States has not established  that the uncertainty in the NDRC 's allocation of 
                                                
268 China's second written submission, paras. 29 -30. 
269 2003 Provisional Measures, (Exhibit USA -11), Article 4.  
270 2017 Allocation Notice, (Exhibit USA -15), Article I.  
271 See United States' first written submission, paras. 200 -203. 
272 2003 Provisional Measures, (Exhibit USA -11), Articles 4 and 22.  
273 United States' opening statement at the first meeting of the Panel, para. 46; and response to Panel 
question No. 28, para. 105.  WT/DS517/R  
 
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  STE and non -STE portions of TRQs , in and of itself,  would cause applicants to forego such an 
advantage by not applying for TRQs or applying for smaller amounts.  
7.100.   Having a ssessed the United States' claims concerning China's legal instruments, w e now 
turn to consider the implications of China's statement that the NDRC, in practice, allocates the entire 
STE portions of TRQs to COFCO and does not require COFCO to return unused  TRQ amounts.  The 
United  States claims that this stated practice violates the obligations to administer TRQs on a 
transparent, predictable, and fair basis, to use clearly specified administrative procedures, and to 
administer TRQs in a manner tha t would no t inhibit  the filling of each TRQ.  
7.101.   With respect to the NDRC's stated practice of allocating the entire STE portions of TRQs to 
COFCO, we agree with the United States that a number of provisions in China's legal instruments 
suggest that STE portions of TRQs  could be allocated to STE as well as non -STE applicants.274 First, 
Article  4 of the 2003 Provisional Measures states that "[s]tate trading quotas must be imported 
through state trading enterprises", and that "non -state trading quotas are imported through 
enterprises that have trading rights, and end -users that have trading rights may also import by 
themselves".275 The statement that STE portions must be imported through STEs would, in our view, 
be redundant if non -STE applicants could not receive allocations o f STE portions of TRQs. Instead, 
this provision suggests that non -STE applicants can receive non -STE or STE portions of TRQs, or a 
mix of the two. The different portions would simply have to be used in accordance with the relevant 
procedures  in Article 4.  
7.102.   Second, Article 14 of the 2003 Provisional Measures requires STE portions to be indicated in 
the TRQ certificate and, accordingly, the annexed TRQ certificate requires an indication of 
"7. Arranged Quantity" and "8. of which State Trading".276 Again, it would, in our view, be redundant 
to require that STE portions  of allocated TRQ  amounts  be indicated in individual recipients' TRQ 
certificates if non -STE applicants could only receive non -STE portions. Instead, this suggests that 
any applicant, including a non -STE applicant, can receive both non -STE and STE portions of TRQs.  
7.103.   Third, Article 22 of the 2003 Provisional Measures sets out a procedure for recipients that 
have been allocated STE portions of TRQs and have not signed a contract by August 15, to seek 
approval to entrust any enterprise  to import  or to import by themselves.277 Again, in our view, t his 
procedure would be redundant if non -STE applicants could not receive STE portions of TRQs. Instead, 
this provision suggests that non -STE applican ts can receive STE portions and therefore use the 
procedure in Article  22 in cases where they fail to contract with COFCO for importation under 
allocated STE portions  of TRQs  by 15 August.  
7.104.   Based on our reading of these provisions, we consider that China's legal instruments set out 
STE and non -STE portions of TRQs as being available for allocation to both STE and non -STE 
applicants, in accordance with the eligibility criteria and allocation principles laid down  in the annual 
allocation notices. Indeed, China  itself states that nothing in its legal instruments prevents the NDRC 
from allocating STE portions of TRQs to non -STE applicants.278 We see nothing, in China's legal 
instruments or elsewhere, that would alert applicants and other interested parties to the N DRC's 
stated practice of allocating the entire STE portions of TRQs only to COFCO. While China states that 
"[a]pplicants become aware of this practice through their participation in the TRQ administration", 
this assertion does not, in our view, suffice.279 
7.105.   With respect to the NDRC's stated practice of not requiring COFCO to return unused TRQ 
amounts, we agree with the United States that the requirement to return unused TRQ amounts is 
set out in China's legal instruments as generally applicable to all recipien ts of TRQ allocations.280  
Article 23 of the 2003 Provisional Measures, which contains this requirement, states in relevant part:  
                                                
274 See United States' second written submission, para. 62.  
275 2003 Provisional Measures, (Exhibit USA -11), Article 4.  
276 2003 Provisional  Measures, (Exhibit USA -11), Article 14.  
277 2003 Provisional Measures, (Exhibit USA -11), Article 22.  
278 China's second written submission, para. 29. See also China's responses to Panel  question No. 5(c), 
para. 14, No. 5(e), para. 16, and No. 5(f), para. 17.  
279 China's response to Panel question No. 5(b), para. 13. 
280 See United States' second written submission, paras. 64 -66. WT/DS517/R  
 
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  In the event that an end -user holding an agricultural product import tariff -rate quota is 
unable to sign import contracts for, o r has already signed import contracts for but is 
unable to complete, the entire quota quantity already applied for and obtained for the 
current year, [the end -user] must return the quota quantity it was unable to complete 
to the original certificate -issuin g agency prior to September 15.281 
7.106.   The requirement to return unused TRQ amounts thus applies to "end -users", which are 
defined in Article 39 of the 2003 Provisional Measures as follows:  
"End-users" as mentioned in these Measures refer to manufacturing enterp rises, 
traders, wholesalers, retailers, etc. that directly apply for and obtain agricultural product 
import tariff -rate quotas.282 
7.107.   Thus, as China also confirms283, end -users are enterprises that apply for and receive TRQ 
allocations. T his definition sug gests t hat any enterprise that  applies for and receives TRQ allocations 
is considered an end -user and is therefore subject to the requirement to return unuse d TRQ 
amounts. W e find unconvincing China's argument that the 2003 Provisional Measures "provide for 
two m utually exclusive categories of applicants, STEs and 'end users'".284 STEs are defined in 
Article  38 of the 2003 Provisional Measures as:  
"State trading enterprises" as mentioned in these Measures refer to enterprises 
conferred by the government with privileges in the exclusive import business of certain 
products. The list of state trading enterprises is verified, determined, and announced 
by the Ministry of Commerce.285 
7.108.   We see nothing in this definition, or elsewhere in China's legal instruments, to sug gest that 
an STE such as COFCO should not be considered an end -user and therefore should not be subject 
to the requirement to return unused TRQ amounts, insofar as that STE applies for and receives a 
TRQ allocation, including an allocation of STE portions of a TRQ.  
7.109.   As explained above, China's legal instruments suggest that both STE and non -STE applicants 
can receive STE portions of TRQs, and that the requirement to return unused TRQ amounts applies 
to both STE and non -STE recipients of TRQ allocations. As a lso explained above, there is  no indication 
in China's legal instruments or elsewhere that COFCO receives the entire STE portions of TRQs and 
is not required to return unused TRQ amounts. China's statement therefore demonstrates that the 
NDRC's practice di ffers from what is set out in China's legal instruments. In our view, the  disparity  
between what is set out  in China's legal instruments and the NRDC's  stated practice demonstrates 
that applicants and other interested parties cannot easily understand or discern the set of rules or 
principles through which  the NDR C, in practice, administers STE and non -STE portions of TRQs. It 
therefore further supports our finding of inconsistency with the obligation to administer TRQs on a 
transparent basis . Similarly, this disparity demonstrates that applicants and other interested parties 
cannot easily anticipate how the N DRC, in practice, allocates STE and non -STE portions of TRQs, 
further supporting our finding of inconsistency with the obligation to adm inister TRQs on a 
predictable basis. This disparity also  shows that the NDRC, in practice, allocates  STE and non -STE 
portions of TRQs in a manner that is not set out in plain or obvious detail , further supporting our 
                                                
281 2003 Provisional Measures, (Exhibit USA -11), Article 23. See also 2017 Reallocation Notice, (Exhibit 
USA-17), para. 1. Article 30 of th e 2003 Provisional Measures imposes penalties in the form of deductions to 
the TRQ allocations in the following years, for failure to compl y with the obligation to return unused TRQ 
amounts. More particularly, it states:  
In the event that an end -user, in violation of the provisions in Article 23 of these Measures, fails to 
complete imports for the entire agricultural import tariff -rate quota quantity allocated during the current year, 
and also fails to return to the original certificate issuing agency by September  15 the quota quantity it failed to 
import during the current year, there will be a corresponding  deduction to its tariff -rate quota  quantity 
allocated in the fol lowing year, according to the proportion not completed. (2003 Provisional Measures, (Exhibit 
USA-11), Article 30.)  
282 2003 Provisional Measures, (Exhibit USA -11), Article 39.  
283 China's first written submission, para. 19; and response to Panel question No. 1 (a), para. 1.  
284 China's second written submission, para. 30. See also China's response to Panel question No. 1(b), 
para. 2.  
285 2003 Provisional Measures, (Exhibit USA -11), Article 38.  WT/DS517/R  
 
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  finding of inconsistency with  the oblig ation to administer TRQs using clearly specified administrative 
procedures.  
7.110.   In addition, the disparity  between what is  set out  in China's legal instruments and the  NRDC's  
stated practice demonstrates that the NDRC does not use the otherwise applic able rule s when 
administering STE and non -STE portions of TRQs. More particularly, China acknowledges that the 
NDRC does not apply the basic eligibility criteria and allocation principles in allocating the entire STE 
portions of TRQs to COFCO286, and does not subject  COFCO to the requirement to return unused 
TRQ amounts.287 We have explained above that fairness requires that China's TRQ administration 
be impartial and equitable, and that the Chinese authorities act in accordance with the applicable 
rules and standards.288 In our view, China' s statement that the NDRC, in practice, does not follow 
the otherwise applicable rules regarding the basic eligibility criteria, allocation principles, and the 
requirement to return unused TRQ amounts  therefore demonstrates that China v iolates the 
obligation to administer its TRQs on a fair basis.  
7.111.   We note China's argument that nothing in China's Schedule CLII or its legal instruments 
precludes the NDRC from allocating the entire STE portions of TRQs to COFCO and not requiring 
COFCO to re turn unused TRQ amounts.289 We wish to emphasiz e that our findings above concern 
solely the consistency  of China's  TRQ administration  with the obligations in Paragraph 116. Whether 
the NDRC's stated practice is consistent  with China's Schedule CLII is not a matter before us. Nor is 
it our task to consider China's compliance with its own domestic legislation.290 
7.112.   With respect to the implications of the NDRC's stat ed practice on the filling of China's wheat, 
rice, and corn  TRQs, we agree with the United States that this practice would result in the exclusion 
of certain TRQ amounts that would otherwise be available to non -STE applicants.291 More 
particularly, China's s tatement that the NDRC, in practice, allocates the entire STE portions of TRQs 
to COFCO and does not require COFCO to return unused TRQ amounts demonstrates that the NDRC 
precludes non -STE applicants from applying for and receiving COFCO's unused TRQ amoun ts during 
the reallocation process. In our view, China's statement concerning the NDRC's practice therefore 
demonstrates that China's TRQ administration restrains  the filling of its TRQs , in violation of the 
obligation to administer its TRQs in a manner th at would not inhibit the filling of each TRQ.  
7.1.4.4.4.2   Procedure  for non -STE recipients to import under STE portions of TRQs  
7.113.   The United States claims that the procedure for non -STE recipients to import under STE 
portions of TRQs violates the obligations to administ er TRQs on a predictable basis, to use clearly 
specified administrative procedures, and to administer TRQs in a manner that would not inhibit the 
filling of each TRQ. China argues that the United States'  claims  are "hypothetical" in light of the 
NDRC 's stated practice of allocating the entire STE portions of TRQs to COFCO. However, we consider 
it appropriate to address these claims  because  the procedure concerning non -STE recipients' use of 
STE portions of TRQs appear s in China's legal instruments , and Chin a acknowledges that its legal 
instruments do not prevent the NDRC from allocating STE portions to non -STE applicants, in which 
case th is procedure would be relevant.292 
7.114.   We recall that  non-STE recipients of STE portions of TRQs must import through a designate d 
STE or, if unsuccessful by 15 August, seek approval from the NDRC to import on their own  or through 
any other enterprise.293 It is undisputed that COFCO is the only designated STE  for grains , and that 
there is no requirement in China's legal instruments for COFCO to agree to contract with non -STE 
recipients of STE portions  of TRQs . It is also undisputed that there is no clarification, in China's legal 
instruments or elsewhere, of the procedure to be followed by non -STE re cipients of STE portions  
when seeking approval to import without COFCO following 15 August.294 In light of this, we consider  
that applicants and other interested parties cannot easily anticipate  how non-STE recipients are to 
                                                
286 China's response s to Panel question No. 6, para. 19 , and No. 63, para. 44. 
287 China's response to Panel question No. 6, para. 20.  
288 See para. 7.9 above.  
289 China's second written submission, paras. 29 -30. 
290 See Panel Reports, US – Hot-Rolled Stee l, para. 7.267; and US – Stainless Steel (Korea) , para. 6.50.  
291 See United States' second written submission, para. 83.  
292 China's responses to Panel question No s. 5(c), para. 14, 5(e), para. 16, and 5(f), para. 17; and 
second written submission, para. 29.  
293 2003 Provisional Measures, (Exhibit USA -11), Articles 4 and 22.  
294 See China's response to Panel question No. 5(d), para. 15.  WT/DS517/R  
 
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  import wheat, rice, and corn under STE portions of TRQs, in violation of China's obligation to 
administer its TRQs on a predictable basis . Similarly, we consider  that the procedure for seeking 
approval to import without COFCO is not set out in plain or obvious detail, in violation of China's 
obligation to admini ster its TRQs using clearly specified administrative procedures . 
7.115.   Turning to the effects of this proce dure on the fi lling of China's TRQs, we note  that non -STE 
recipients are prevented from utilizing STE portions of their TRQ allocations  if they do not succ eed 
in contracting with COFCO or obtaining approval from the NDRC to import without COFCO.295 We 
also agree with the United State s that the effects go beyond  the possibilities for non-STE recipients 
to utilize STE portions of their TRQs allocat ions. Under Ch ina's legal regime, non -STE recipients that 
are prevented from utilizing STE portions of their TRQs allocations  would not be eligible to apply for 
reallocation. Furthermore, they may face penalties for non -use of TRQ allocations in the form of 
deductions i n the TRQ amounts allocated to them in the following year.296 In our view, the restrictions 
imposed on the possibilities for non-STE recipients to utilize  STE portions of their TRQ allocations , 
and the implications on their ability to partici pate in reallocation and to receive  the full amount of 
TRQ allocations in future years, violate  China's obligation to administer its TRQs in a manner that 
would not inhibit the filling of each TRQ.  
7.1.4.4.5   Conclusion  
7.116.   For the reasons set out above, we find that the adm inistration of STE and non -STE portions 
of the TRQs is inconsistent with  the obligation s, set forth in Paragraph 116  of China 's Working Party 
Report , to administer TRQs on a transparent, predictable , and fair basis, to use clearly specified 
administrative procedures , and to  administer TRQs in a manner that would not inhibit the filling of 
each TRQ.  
7.1.4.5   Public notice  
7.1.4.5.1   Introduction  
7.117.   The United States claims that the extent of the public notice provided in connection with the 
allocation , return and reallocation of C hina's  wheat, rice, and corn TRQs violates three obligations 
under Paragraph 116, namely the obligations to administer TRQs on a transparent and predictable 
basis, and in a manner that would not inhibit the filling of each TRQ. China rej ects the entirety o f 
the United  States' claims.  
7.118.   Below, we  describe the extent of the public notice provided by China and  summarize  the 
parties' main arguments. We  then assess whether the extent of the public notice provided in 
connection with the allocation, return, and real location of China's TRQs is inconsistent with the three 
obligations the United States has invoked, taking into account our understanding of the meaning 
and nature of each of the relevant obligations laid out in paragraph  7.9 above.  
7.1.4.5.2   Extent of the public notice at issue  
7.119.   The annual allocation notices set out the total TRQ amounts available for allocation in any 
given year. In the 2017 Allocation Notice, the total TRQ amounts available for allocation were as 
follows:  
                                                
295 2003 Provisional Measures (Exhibits USA -11), Articles 4 and 22. Non -STE recipients may also face 
obstacle s in utilizing STE portions of their TRQ allocations  where the NDRC grants approval but the timeline for 
the approval process does not permit the non -STE recipients sufficient time to arrange for importation by 
themselves or through other enterprises. As p ointed out by the United States, non -STE recipients of STE 
portions cannot apply for approval to import by themselves or through ot her enterprises until 15 August and 
are required to return unused TRQ  amount s a month hereafter, on 15  September, in order to  avoid facing 
penalties for non -use. Since Article 22 of the 2003 Provisional Measures does not set out a deadline for the 
NDRC to reach a decision, non -STE recipients of STE portions could potentially have insufficient time to import, 
even where approval is granted.  
296 More particularly, and as described in paras. 2.34-2.36 above , a recipient  receive s corresponding 
deductions to its TRQ all ocation in the following year, if it fails to return unused TRQ amounts by 15 September 
or if it fails to use the full TRQ amounts allocated to it in two co nsecutive years. (2003 Provisional Measures, 
(exhibit USA -11), Articles 30 and 31).  WT/DS517/R  
 
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  The 2017 grain import tariff -rate quota quantities are: wheat – 9.636 million tons, with 
a state trading proportion of 90%; corn – 7.20 million tons, with a state trading 
proportion of 60%; [] rice – 5.32 million tons (of which: 2.66 million tons of long -grain 
rice and 2.66 million tons of medium - and short -grain rice), with a state trading 
proportion of 50%.297 
It is undisputed that China does not provide public notice of the TRQ amounts that are actually 
allocated, returned, or reallocated, in respect of individual applicants or in the aggregate.  
7.1.4.5.3   Main arguments of the parties  
7.120.   First, the U nited States contends that China violates the obligation to administer its TRQs on 
a transparent basis by failing to prov ide public notice of  (i) the total amount s of allocated  TRQs and 
the ratio of STE and non -STE portions thereof, (ii)  the total amounts of returned TRQs, (iii)  the total 
TRQ amounts available for reallocation, (iv) the total amounts of reallocated TRQs , (v) the names 
of individual enterprises that receive TRQ allocations or reallocations , (vi) the TRQ amounts allocated 
to each individual recipient , and (vii) the TRQ amounts reallocated to each individual recipient .298 In 
the United  States' view, an applicant c annot understand the reasons for his own outcome or how 
the NDR C allocates and reallocates returned TRQ amounts  without public notice of the outcomes of 
the allocation and reallocation processes, i.e. items (i) and (iv) through (vii).299 Further, the United 
States argues that applicants cannot know whether reallocation will or did take place in any given 
year, without public notice of the  TRQ amounts returned and made available for reallocation, i.e. 
items (ii) and (iii).300 
7.121.   Second, the United States contends t hat China violates the obligation to administer its TRQs 
on a predictable basis by failing to provide public notice of (i) the total amounts of returned TRQs , 
(ii) the total TRQ amounts available for reallocation, (iii ) the total amounts of reallocated TRQ s, 
(iv) the names of individual enterprises that receive TRQ reallocations , and (v) the  TRQ amounts 
reallocated to each individual recipient .301 Similar to its arguments concerning transparency, the 
United States argues that an applicant cannot predict ho w the NDRC will reallocate returned TRQ 
amounts without public notice of the outcomes of the reallocation process, i.e. items (iii) through 
(v).302 Further, the United States argues that applicants cannot know whether reallocation will take 
place, and if so in what amount, without public notice of the TRQ amounts returned and made 
available for reallocation, i.e. items (i) and (ii).303 
7.122.   Third, the United States contends that China violates the obligation to administer its TRQs 
in a manner that would not inhibit the filling of each TRQ, by failing to provide public notice of (i)  the 
total amount s of allocated  TRQs and the ratio of STE and non -STE por tions thereof, (ii)  the total 
amounts of returned TRQs and the ratio of STE and non -STE portions thereof , (iii) the total TRQ 
amounts available for reallocation and the ratio of STE and non -STE portions thereof , (iv) the total 
amounts of reallocated TRQs and the ratio of STE and non -STE portions thereof, (v) the names of 
individual enterprises that receive TRQ allocations or reallocations , (vi) the TRQ amounts allocated 
to each individual recipient , and (vii) the TRQ amounts reallocated to each individual r ecipient .304 In 
the United States' view, traders lack the "necessary commercial information to engage in 
importation" under the TRQs without public notice of the outcomes of the allocation and reallocation 
processes, i.e. items (i) and (iv) through (vii).305 Further, the United  States argues that potential 
applicants are less likely to apply for reallocation or more likely to apply for smaller amounts without 
                                                
297 2017 Allocation Notice, (Exhibit US A-15), Article I.  
298 United States' first written submission, paras. 97 -112. See also United  States' response to Panel 
question No. 20(b ), para. 57.  
299 United States' first written submission, paras. 99 and 111.  
300 United States' first written submission, para. 106.  
301 United States' first written submission, paras. 135 -144. See also United  States' response to Panel 
question No. 20(b), para. 58.  
302 United States' first written submission, para. 142.  
303 United States' first written submission, para. 138.  
304 United States' first written submission, paras. 207 -213. See also United  States' response to Panel 
question No. 20(b), para. 59.  
305 United States' first wr itten submission, paras. 207 -211; and opening statement at the first meeting 
of the Panel, para. 18.  WT/DS517/R  
 
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  public notice of the total TRQ amounts returned and made available for reallocation, i.e. items (ii) 
and (iii).306 
7.123.   China  generally  argues that the United States'  arguments regarding the scope of  public 
notice go too far, maintaining that " the additional information requested by the United States is not 
supported by a reason able definition of transparency" .307 China submits that applicants that desire 
further  clarification on the NDRC' s allocation and reallocation of TRQ amounts  can submit an inquiry 
for further information.308 China also argues that the information required by the United States is  
not of the kind that would contribute to the filling of the TRQs, since the names of all applicants are 
published in the annual announcements of applicant enterprise data, and exporters can use this 
information to contact applicants  to inquire whether the y have received TRQ allocations and whether 
they wish to enter into commercial arrangements  for the importation of whea t, rice , and corn under 
such TRQ allocations .309 Furthermore, China argues that grain importers who receive TRQ allocations 
or reallocation s can initiate commercial arrangements with exporters , and that the United States' 
argument is " based on a theoretical marketplace where only grain -exporting entities have 
agency ".310 
7.124.   Lastly, China  submits that it is not possible, under the timeline containe d in its leg al 
instruments and its Schedule  CLII, to provide public notice of the amounts of returned TRQ amounts 
available for reallocation prior to the deadline for submitting applications for reallocation.311 In 
China's view, it is "pure speculation" for the United States to assert that this lack of information 
renders applicants less likely to apply for reallocation or more likely to apply for smaller amounts.312 
7.1.4.5.4   Analysis by the Panel  
7.125.   Below, we assess the United States' claims under the obl igations to administer TRQs on a 
transparent and predictable basis, and in a manner that would not inhibit the filling of each TRQ, in 
turn. 
7.126.   With respect to the United States' claim  that China violates the obligation to administer its 
TRQs o n a transparent  basis, the United States argues that Paragraph 116 requires China to give 
public notice of  (i) the total amount s of allocated  TRQs and the ratio of STE and non -STE portions 
thereof, (ii)  the total amounts of returned TRQs, (iii) the total TRQ amounts avai lable for reallocation, 
(iv) the total amounts of reallocated TRQs , (v) the names of individual enterprises that receive TRQ 
allocations or reallocations , (vi) the TRQ amounts allocated to each individual recipient , and (vii) the 
TRQ amounts reallocated to  each individual recipient.  
7.127.   At the outset, we note that the obligation to administer TRQs on a transparent basis is a 
general obligation  that does  not specifically require public notice of information, let alone public 
notice of the detailed  types of infor mation  identified by the United States . This stands in contrast to 
many other provisions of the covered agreements that require publication or notification of specific 
types of information.313 Notably, Article XIII:3 of the GATT 1994, which we address in section  7.2 
                                                
306 United States' first written submission, para. 212.  
307 China' s first written submission, para. 63. For information concerning individual  applicants, 
specifically, China argues that this constitutes business confidential information, which China should not be 
required to publish. ( China's  first written submission, para. 66;  response t o Panel question No. 28, 
paras.  82-83; and second written  submission, paras. 37 -41 (referring to Article XI II of the GATT 1994 and 
Article  1(11) of the Agreement on Import Licensing Procedures)). The European Union presents a similar view. 
(European Union's third -party submission, paras. 97 -107).  
308 China's first  written submission, para. 65.  
309 China's first written submission, para. 68.  
310 China's first written submission, para. 69.  
311 China's first written submission, paras. 72 -73.  More particularly, since China's legal instruments and 
its Schedule CLII call for unused TRQ amounts  to be returned by 15 September and require applications for 
reallocation to be submitted between 1 and 15 September, China maintains that it is not possible to publish t he 
total amounts of returned TRQs  that are available for reallocatio n prior to the deadline for submitting 
applications for reallocations.  
312 China's first written submission, para. 75.  
313 See, e.g. Article X:1 of the GATT 1994 (concerning publication of trade regulations); Articles 1.4(a), 
3.3, 3.5(b) and 3.5(c) of the Agreement on Import Licensing Procedures (concerning publication of aspects 
related to administrative procedures for import  licensing, licensing requirements, and the use of quotas); 
Article 12 of the Anti -Dumping Agreement and Article 22 of the Agreement on Subsidies and Countervailing WT/DS517/R  
 
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  below , sets  out specific publication or notification obligations in r elation to the use of TRQs. We are 
therefore not convinced that the reference to "transparent" in Paragraph 116 , in and of itself,  
requires  China to publish the types of information identified by the United States . In our view, the 
United States has not de monstrated that China's failure to give  public notice of such information 
entails that the basis for its TRQ administration is not transparent . 
7.128.   More particularly, and as mentioned in paragraph 7.9 above, the obligation to administer 
TRQs on a transparent basis requires China to administer its TRQs through an underlying set of rules 
or principles that are easily understood or discerned by applicants and other interest ed parties. 
Above, we have made several findings requiring China to further clarify, in its legal instruments, the 
various rules and principles through which the NDRC administers TRQs. However, w e are not 
convinced that knowledge of the outcomes of the NDR C's allocation and reallocation processes – 
including the identities of individual TRQ recipients and the TRQ amounts allocated and reallocated 
to them as well as the cumulative amounts of TRQ allocations and reallocations and their STE and 
non-STE ratios – is necessary for applicants and other interested parties to easily understand or 
discern the underlying set of rules or principles through which the NDRC administers TRQs.  
7.129.   We are also not convinced that knowledge of the total amounts of returned TRQs ma de 
available for reallocation is necessary for applicants and other interested parties to easily understand 
or discern the underlying set of rules or principles through which the NDRC admi nisters  TRQs. T he 
2017 Reallocation Notice states that unused TRQ  amounts must be returned by 15  September and 
that the NDRC and the Ministry of Commerce "will carry out reallocation of the quotas that are 
returned".314 In other words, applicants and other interested parties know that reallocation will take 
place if allocate d TRQ amounts are returned, and that any such amounts of returned TRQs will be 
available for reallocation. The United States has not explained  why this information does not suffice 
to allow applicants and other interested parties to easily understand or di scern the underlying rules 
or principles through which th e NDRC reallocates returned TRQ amounts . As further support for this 
conclusion, we note that the timeline for reallocation, set forth in China's legal instruments and in 
its Schedule CLII, requires applications for reallocation to be filed between 1 and 15 September and 
requires unused TRQ  amount s to be returned by 15  September.315 Thus, we agree with China that 
this timeline would not allow the NDRC to provide public notice of the total amounts of returned 
TRQs that are available for reallocation prior to the deadline for applying for reallocation of such TRQ 
amounts. In response t o this argument, t he United States maintains that China should publish the 
total amounts of returned TRQs that were made available for reallocation following the deadline for 
applicants to apply for reallocation, "to confirm amounts were returned and reall ocated".316 
Alternatively, the United States argues that China should publish "daily or weekly updates reporting 
amounts returned" during the reallocation application period.317 However, the United  States has not 
explained how this type of subsequent public no tice or weekly or daily updates would be necessary 
for applicants and other interested parties to easily understand or discern the underlying set of rules 
or principles through which the NDRC reallocates  returned TRQ amounts . 
7.130.   With respect to the United Sta tes' claim that China violates the obligation to administer its 
TRQs on a predictable basis, the United States argues that Paragraph 116 requires China to give 
public notice of  (i) the total amounts of returned TRQs , (ii) the total TRQ amounts available fo r 
reallocation, (iii ) the total amounts of reallocated TRQs , (iv) the names of individual enterprises that 
receive TRQ reallocations , and (v) the TRQ amounts reallocated to each individual recipient. We 
reject the United States' arguments for essentially t he same reasons as those explained in relation 
to the obligation to administer TRQs on a transparent basis. More particularly, we do not consider 
that knowledge of the listed information is necessary to render China's TRQ administration 
predictable, in oth er words to enable applicants and other interested parties to easily anticipate how 
the NDRC reallocates returned TRQ amounts.  
7.131.   With respect to the United States' claim that China violates the obligation to administer its 
TRQs in a manner that would not inh ibit the filling of each TRQ, the United States argues that 
                                                
Measures (concerning public notice of the initiation of investigations, preliminary or fina l determinations, 
imposition of provisional measures, and conclusion, suspension or termination of invest igations).  
314 2017 Reallocation Notice, (Exhibit USA -17), para. 1.  
315 2003 Provisional Measures (E xhibit USA -11), Arti cles 23 and 24; and China' s Schedul e CLII, Part I, 
Section IB (Most -Favoured -Nation Tariff, Agricultural Products, Tariff Rate Quotas), (E xhibit USA -23), 
Paragraphs 8.A and 8.B).  
316 United  States' opening statement at the first meeting of the Panel, para. 48.  
317 United States' response to Pan el question No. 27(b), para. 101.  WT/DS517/R  
 
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  Paragraph 116 requires China to give public notice of  (i) the total amount s of allocated  TRQs and 
the ratio of STE and non -STE portions thereof, (ii)  the total amounts of returned TRQs and the rat io 
of STE and non -STE portions thereof , (iii) the total  TRQ amounts available for reallocation and the 
ratio of STE and non -STE portions thereof , (iv) the total amounts of reallocated TRQs and the ratio 
of STE and non -STE portions thereof, (v) the names of  individual enterprises that receive TRQ 
allocations or reallocations , (vi) the  TRQ amounts allocated to each individual recipient , and (vii) the 
TRQ amounts reallocated to each individual recipient . 
7.132.   In our view, the United States has not demonstrated that China's failure to give public notice 
of the information listed by the United States violates China' s obligation to administer its TRQs in a 
manner that would not i nhibit the filling of each TRQ.  More particularly, t he United  States' call for 
public notice of the outcomes of the NDRC's allocation and reallocation processes – including the 
identities of individual TRQ recipients and the TRQ amounts allocated and reallocated to them as 
well as the cumul ative amounts of TRQ allocations and reallocations and their STE and non -STE 
ratios – is premised on the argument that this information is necessary for grain importers and 
exporters to enter into commercial arrangements  for the importation of wheat, rice, and corn under 
the all ocated or reallocated TRQ amounts.  However, nothing in China' s legal instruments prevents 
TRQ recipients from publishing their allocation or reallocation outcome s or from contacting grains 
exporters, should they wish to enter into co mmercial arrangements  for the importation of grains 
under their all ocated or reallocated TRQ  amounts . 
7.133.   We are also not  convinced by the United States'  argument that the lack of public notice of 
the total TRQ amounts returned and made available for reallocat ion would make applicants less likely 
to apply for reallocation or more likely to apply for smaller amounts, in a manner that would inhibit 
the filling of each TRQ. As pointed out by the United States , the receipt of a TRQ reallocation is a 
commercial bene fit.318 Applicants know that the NDRC will reallocate any returned TRQ amounts. 
The United States has not demonstrated  why applicants would forego the possibility of receiving 
such a commercial benefit solely because they do not know the exact amount s of ret urned TRQs 
made available for reallocation in an y given year.  As mentioned  above, we find further support for 
this conclusion  in the timeline for reallocation, set forth in China's legal instruments and in its 
Schedule CLII, which would  not allow the NDRC to provide public notice of the total amounts of 
returned TRQs that are available for reallocation prior to the deadline for applying for reallocation of 
such TRQ amounts.  
7.1.4.5.5   Conclusion  
7.134.   For the reasons set out above, we find that the United States has not mad e a prima facie  
case that the extent of the public notice provided in connection with the allocation, return, and 
reallocation of China's wheat, rice , and corn TRQs is inconsistent with the obli gations, set forth in 
Paragraph  116, to administer TRQs on a transparent and predictable basis , and in a manner that 
would not inhibit the filling of each TRQ.  
7.1.4.6   Usage requirements for wheat, rice, and corn imported under TRQ  allocations  
7.1.4.6.1   Introduction  
7.135.   The United States claims that China's imposition of usage requiremen ts in respect of wheat, 
rice, and corn importe d under TRQ allocations  violates the obligation under Paragraph 116 to 
administer TRQs in a manner that would not inhibit the filling of each TRQ. Further, the United States 
argues that the NDRC's stated practi ce on enforcing the usage requirements for wheat and corn 
demonstrates a violation of the obligations under Paragraph 116 to administer TRQs in a predictable 
manner and to use clearly specified administrative procedures.  China rejects the entirety of the 
United States' claims.  
7.136.   Below, we describe the usage requirements at issue and summarize  the parties'  main 
arguments . We then assess whether the usage requirements are inconsistent with the obligations 
the United States has invoked, taking into account our u nderstanding of the meaning and nature of 
each of the relevant obligations laid out in paragraph  7.9 above.  
                                                
318 United States' opening statement at the first meeting of the Panel, para. 46.  WT/DS517/R  
 
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  7.1.4.6.2   Usage requirements at issue  
7.137.   The 2017 Allocation Notice s ets out the following usage requirements for wh eat and corn 
imported under TRQ allocations : 
The aforementioned grain import tariff -rate quotas obtained by an applicant must be 
self-used, and the imported goods are required to be operated for processing by the 
enterprise itself. Among these [goods], imported wheat and corn are required to be 
processed and used in its own plant;319 
Group enterprises that own multiple processing plants must independently apply for and 
independently use import tariff -rate quotas in the name of each processing plant.320 
7.138.   For rice imported under TRQs, the 2017 Allocation Notice sets out the following usage 
requirements:   
The aforementioned grain import tariff -rate quotas obtained by an applicant must be 
self-used, and the imported good s are required to be operated for processing by the 
enterprise itself. Among these [goods], … imported []  rice is required to be organized 
for sale in the name of the enterprise itself .321 
Trade -type enterprises applying for [] rice import tariff -rate quotas  may choose to apply 
in the name of the group headquarters or a subsidiary enterprise, but the headquarters 
and the subsidiary enterprise must not apply at the same time.322 
7.1.4.6.3   Main arguments of the parties  
7.139.   With respect to wheat and corn imported under TRQ allocations , the United States points to 
the usage requirements in the 2017 Annual Allocation Notice that such wheat and corn must be 
"processed and used" in the TRQ recipient's own plant and that group enterprises with multiple 
plants must individually ap ply for TRQ allocations  in the name of each plant and individually process 
wheat an d corn imported under TRQ allocations  in each plant.323 The United States argues that the 
inability of a recipient to sell imported wheat and corn that has not been processed in its own plant 
and the inability of group enterprises with multiple plants to process wheat and corn in their other 
plants "in the event [their] business needs or plans change" raise uncertainty and increase costs.324 
With res pect to rice imported under TR Q allocations , the United States points to the usage 
requirement in the 2017 Annual Allocation Notice that such rice must be "organized for sale in the 
name of" the recipient and that group enterprises "ma y choose to apply [for rice TRQ allocations ] in 
the name of the group headquarters or a subsidiary enterprise, but the headquarters and the 
subsidiary enterprise must not apply at the same time".325 Since recipients face penalties for non -use 
of TRQ allocations in the form of deductions to the TRQ amounts allocated in the following year, the 
United States argues that the usage requirements for wheat, rice, and corn will incentivize applicants 
to request "a smaller TRQ amount than it may otherwise wish to receive for commercial purposes ".326 
In the Uni ted States' view, the combination of the usage requirements and the penalties for non -
use of TRQ allocations "would tend to limit importation under the TRQs and therefore inhibit the 
filling of the TRQs " in violation of Paragraph  116.327 
7.140.   With respect to wh eat and corn imported under TRQ allocations , China argues that the usage 
requirement and penalties for non -use are necessary for the filling of TRQs, since applicants would 
otherwise be able to apply for a larger allocation of wheat and corn TRQs "solely to reduce the 
                                                
319 2017 Allocation Notice, (Exhibit USA -15), Article V(2).  
320 2017 Allocation Notice, (Exhibit USA -15), Article II.  
321 2017 Allocation Notice, (E xhibit USA -15), Article V(2).  
322 2017 Allocation Notice, (Exhibit USA -15), Article II.  
323 United States' first written submission, paras. 215 and 217.  
324 United States' first wr itten submission, paras. 216 -218; and opening statement at the first meeting 
of the Panel, para. 19.  
325 United States' first written submission, paras. 215 and 217.  
326 United States' first written submission,  para. 216. (emphasis original)  
327 United States ' first written submission, para. 221 . WT/DS517/R  
 
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  amounts a vailable to [their] competitors ".328 Further, China argues  that its Schedule CLII "requires" 
or "contemplates" the usage requirements for wheat and corn and the penalties for non -use of TRQ 
allocations, indicating that these are consisten t with Paragraph 116.329 China also  states that the 
NDRC, in practice, does not "monitor whether recipients comply with the processing requirement on 
a daily basis" and would not subject a recipient to penalties if it is found to be "unable to process its 
full allocation for unexpected reasons".330 In China's view, this renders the United States' argument 
"unfounded".331 With respect to rice imported under TRQs, China argues that there is no processing 
requirement332, and that such rice is only required to be sold by the recipient itself.333 In China's 
view, this requirement " alerts applicants that they will be accountable for utilizing their allocations, 
thereby incentivizing efficient use of allocations and deterring unlawful sales of TRQ Certificates ".334 
7.141.   The United States responds that China has not provided evidence demonstrating the 
existence of the NDRC's stated practice of not enforcing the usage requirements for wheat and corn 
if a recipient does not have sufficient processing capacity for unexpected reasons. In  any event, 
since the annual allocation notices give applicants the impression that they must process wheat and 
corn in their own plants "regardless of China's actual practice, the inhibiting effect of this requirement 
remain s".335 In the United States' view , the NDRC's stated practice demonstrates that China violates 
the obligations to administer its TRQs on a predictable basis and to use clearly specified 
administrative procedures, since China's legal instruments do not support China's argument on the 
"varied application" of the usage requirements, nor indicate how the NDRC determines an applicant's 
processing capacity for purposes of the usage requirements.336 
7.1.4.6.4   Analysis by the Panel  
7.142.   Below, we assess, first, the United States ' claims  concerning the usage requirements for 
wheat and corn set out in China's legal instruments, as well as China's statement concerning the 
NDRC's practice on enforcing these requirements. We then address the United States ' claim 
pertaining to the usage requir ement for rice imported under TRQs.  
7.1.4.6.4.1   Usage requirements for wheat and corn imported under TRQ  allocations  
7.143.   The usage requirements for wh eat and corn imported under TRQ allocations  are set out in 
the 2017 Allocation Notice and quoted in paragraph 7.137  above. According to these, a recipient of 
a wheat or corn TRQ allocation is required to process the imported wheat or corn in its own plant. 
For group enterprises, the i mported wheat or corn must be processed separately in each processing 
plant that has applied for and received wheat or corn TRQ allocations.  The United States claims that 
these usage requirements violate the obligation to administer TRQs in a manner that w ould not 
inhibit the filling of each TRQ.  
7.144.   We agree with the United States that these requirements restrain  recipients' ability to use 
wheat or corn imported under their TRQ allocations in the most efficient or commercially preferable  
manner. In our view, c ircumstances in the market may sometimes make it more efficient or 
commercially preferable for a TRQ recipient to contract with another enterprise for the processing of 
its imported wheat or corn, or to sell that wheat or corn without processing. Similarly , there may be 
circumstances where it would be more efficient or commercially preferable for a group enterprise to 
have its imported wheat or corn processed in a plant different than that which applied for a TRQ 
allocation. The usage requirements for wheat  and corn set out in China's legal instruments would 
prevent TRQ recipients  from pursuing these business options.  
7.145.   The operation of the usage requirements for wheat and corn is such that a pplicants know 
that they must process wheat and corn  imported under T RQ allocations  in their own plant  and will 
therefore import the amount s of wheat and corn that they can process in their own plant . The 
                                                
328 China's first written submission, para. 126.  
329 China's response to Panel question No. 27(c), paras. 77 -79; and second written submission, 
paras.  51-52. 
330 China's response to Panel question No. 57, para. 29.  
331 China's first written submission, para. 125.  
332 China's first written submission, para. 121.  
333 China's response to Panel question No. 59(a), para. 37, and No. 59(b), para. 38.  
334 China's second written submission, para. 56.  
335 United States' opening statement at the first meeting of the Panel, para. 54.  
336 United States' second written submission, para. 111.  WT/DS517/R  
 
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  operation of the penalties for non -use of TRQ allocations is such that applicants  know that they will 
face deductions to  their TRQ allocations in the following year if they do not  import the full amounts 
of wheat or corn under their TRQ al locations.337 Therefore, t he operation of the usage requirements 
for wheat and corn, in conjunction with the penalties for non -use of TRQ a llocations, is such that 
applicants will apply for TRQ amounts that they know they can process in their own plant.  In our 
view, th is would cause applicants to be overly cautious in deciding the TRQ amounts that they will 
apply for. We find convincing the a rgument that, in the absence of such requirements, applicants 
would apply for larger TRQ amounts. Consequently, we consider that the usage requirements 
restrain the filling of China's wheat and corn TRQs, and th erefore violate the obligation to administer 
TRQs in a manner that would not inhibit the filling of each TRQ.  
7.146.   China argues that its Schedule CLII "indicates that imposing end -use requirements and 
penalties is consistent with Paragraph 116".338 With respect to penalties for non -use of TRQ 
allocations, C hina points to the following part of its Schedule:  
For all methods of allocation, a quota -holder that does not import its full allocation under 
a tariff -quota will receive a proportional reduction in the tariff -quota allocation in the 
subsequent year unles s the quantity is returned to the SDPC prior to 15 September. A 
quota holder that has failed to import its full allocation in two consecutive years and has 
returned that unused portion by 15 September shall have its quota allocated in the 
following year on  the basis of its fill rate in the most recent year, and will not benefit 
from any additional reallocations until and unless there are no other applications. The 
means of calculating the penalty  will be included in the TRQ regulation in force and 
publicly available, and will be applied in a consistent and equitable manner.339  
7.147.   We recall that the United States does not challenge China's imposition of such penalties per 
se.340 Rather, the United States ' arguments and our findings concern the issue of whether the usage 
requirements, including how these operate in conjunction with the penalties for non -use, inhibit the 
filling of TRQs. Hence, we do not consider the reference, in China's Schedule CLII, to penalties for 
non-use of TRQ allocations to be relevant to the claim at hand.  
7.148.   With regard to the usage requirements, China points to the following part of its Schedule:  
In the first year, allocations to end users by the SDPC of the tariff -quota … shall be 
based on a first -come, first -served system or the requests of the applicants and their 
historical import performance, production capacity , or other relevant commercial 
criteria, subject to specific conditions to be published one month in advance of the 
opening of the application period so as to ensure an equitable distribution and complete 
tariff-quota utilization.341 
7.149.   As the United States pointed out, production capacity is referenced in China's Schedule as a 
factor China may take into account in allocating t he TRQ amounts during the first year. The cited 
part of the Schedule contains no direct reference to processing or other types of usage requirements 
for wh eat and corn imported under TRQ allocations . We understand China to argue that applicants 
                                                
337 More particularly, and as described in paragraphs 2.34-2.36 above , a TRQ recipient receives a 
corresponding deduction to its TRQ alloc ation in the following year, if it fails to return unused TRQ amounts by 
15 September or if it fails to use the full TRQ amounts allocated to it during two consecutive years. (2003 
Provisional Measures, (exhibit USA -11), Articles 30 and 31).  While China's legal instruments do not provide for 
a penalty for failure to comply with the usage requirements for wheat and corn, China explains that a TRQ 
recipient receives the same type of penalty if it does not comply with the usage requirements for wheat and 
corn. (China's response to Panel question No. 58(a), para. 33). This explanation further supports our find ing 
that the usage requirements for wheat and corn would inhibit the filling of China's TRQs.  
338 China's second written submission, para. 51 . 
339 China's response to Panel question No. 27, para. 77 (quoting China's Schedule CLII, Part I, Section 
IB (Most -Favoured-Nation Tariff, Agricultural Products, Tariff Rate Quotas), (Exhibit USA -23), para. 6.D). See 
also C hina's second written submission, para. 51.  (emphasis added by China)  
340 See, e.g. United States' second written submission, para. 54, stating "China's r esponse focuses on a 
different aspect of its measures – the penalties for failure to import and use a TRQ allocation – not the 
restrictions on the use of the imported product ". (emphasis original)  
341 China's response to Panel question No. 27, para. 78 (quot ing China's Schedule CLII, Part I, Section 
IB (Most -Favoured -Nation Tariff, Agricultural Products, Tariff Rate Quotas), (Exhibit USA -23), paras. 6.B 
(concerning STE portions of TRQs) and 6.C (concerning non -STE portions of TRQs)) . (emphasis added by 
China)  See also China's second written submission, para. 52.  WT/DS517/R  
 
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  should infe r the usage requirements from the reference in the Schedule to processing capacity as a 
factor for allocating the TRQ amounts. More particularly, China argues that "[t]aking an enterprise's 
capacity to produce processed grains into account is only logical if enterprises are required to process 
grains in their own facilities" and that "[a]bsent this end -use requirement, there would be no purpose 
for collecting and considering production capacity data".342 We do not necessarily disagree that 
production capacity  and the usage requirements are related to a certain extent: if production 
capacity is taken into account in allocating the TRQ amounts, TRQ recipients may well have capacity 
to process wheat and corn imported under  their TRQ allocations .343 This, however, i s not pertinent 
to the present claim which concerns the inhibiting effect of the usage requirements on the filling of 
China's TRQs. As noted above, our finding that the usage requirements would inhibit the filling of 
China's wheat and corn TRQs is based on  their restraining effect on the ability of recipients to dispose 
of wh eat and corn imported under their TRQ allocations  in the most efficient and commercially 
preferable  manner. Our finding of inconsistency of the usage requirements with the obligation to  
administer TRQs in a manner that would not inhibit the filling of each TRQ, therefore, stands 
regardless of whether China take s processing capacity into a ccount in the allocation of TRQ amounts . 
7.150.   China also maintains that the processing requirements for wh eat and corn are necessary to 
"encourage the filling of each TRQ".344 More specifically, China submits that "if a TRQ applicant could 
apply for an allocation with no concern for being held accountable for processing that allocation, an 
applicant could apply for a larger allocation solely to reduce the amounts available to its 
competitors".345 However, this argument disregards the fact that such applicants would, under 
China's legal instruments, face penalties for non -use of their TRQ allocations. Specifically, if an 
applicant applies for "a larger allocation solely to reduce the amounts available to its competitors", 
that applicant must return any unused TRQ amounts and would face penalties for non -use of TRQ 
allocations.346 As we understand the operation of China 's TRQ administration, and as pointed out by 
China itself347, it is the penalties for non -use of TRQ allocations that serve to encourage TRQ 
recipients to fully use TRQ amounts allocated to them. The usage requirements do not serve that 
purpose, but rather r estrict the TRQ recipients' ability to dispose of the imported wheat and corn as 
their commercial needs require. We therefore do not find this argument convincing.  
7.151.   Lastly, China submits that usage requirements are "common components" of TRQ 
administration,  imposed by several Members, including the United States.348 In this regard, we note 
that the present claim has been brought under China' s Working Party Report, which contains specific 
obligations undertaken by China with regard to its TRQ administration . 
7.152.   Having assessed the usage requirements for wheat and corn set out in China's legal 
instruments, we now turn to consider the implications of China's statement concerning the NDRC's 
practice on enforcing these requirements. China's statement is that the NDRC, in practice, does not 
"monitor whether recipients comply with the processing requirement on a daily basis" and would not 
subject a recipient to penalties if it is "unable to process its full allocation for unexpected reasons".349 
The United States claims tha t this stated practice violates the obligations to administer TRQs on a 
predictable basis and to use clearly specified administrative procedures.  
                                                
342 China's second written submission, para. 52.  
343 We note that p rocessing capacity is only one among multiple factors listed in the 2017 Allocation 
Notice as factors to be taken into account in al locating the TRQ amounts, and China itself states that, in 
practice, applicants' actual import performance under previously allocated TRQs is "the factor given the most 
weight i n NDRC's allocation analysis" and that it is only for "new" applicants that "in formation concerning 
production capacity is a key factor". (China's first written submission, paras. 49 -50). Thus, regardless of 
processing capacity being a factor in the NDRC's allocation of TRQ amounts, recipients may not necessarily 
have capacity to pro cess wh eat and corn imported under TRQ amounts  allocated to them.  
344 China's first written submission, para. 127.  
345 China's first written submission, para. 126.  
346 More particularly, and as described in paragraphs 2.34-2.36 above, a recipient receives 
corresponding deductions to its TRQ allocat ion in the following year, if it fails to return  unused TRQ amounts by 
15 September or if it fails to use the full TRQ amounts allocated to it in two consecutive years. (2003 
Provisional Measures, (exhibit USA -11), Articles 30 and 31).  
347 China's first writ ten submission, para. 126.  
348 China' s first written submission, paras. 128 -133. 
349 China's response to Panel question No. 57, para. 29.  WT/DS517/R  
 
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  7.153.   First, we note that, as pointed out by the United States350, China has provided no evidence 
of the NDRC's practi ce, let alone evidence that applicants are made aware of such practice.351 We 
agree with the United States that applicants will apply for TRQs, and process wheat and corn 
imported under their TRQ allocations , taking into consideration the usage requirements announced 
to the public through China's legal instruments, and not on the basis of any unknown practice of the 
NDRC.352 Second, we note that China itself maintains that the usage requirements for wheat and 
corn apply in all circumstances and that the NDRC's stated practice only concerns the monitoring of 
TRQ recipients' compliance with these and the consequences in situati ons where recipients are 
unable to process wheat and corn for unexpected reasons.353 Our finding that the usage 
requirements for wheat and corn would inhibit the filling of China's TRQs is based on their restr aining  
effect on the ability of recipients to eff iciently dispose of wheat and corn in all circumstances, not 
only in situations where they are unable to process wheat and corn for unexpected reasons. 
Therefore, China's statement concerning the NDRC's practice does not alter our finding that the 
usage re quirements for wheat and c orn inhibit the filling of TRQs . 
7.154.   We also agree with the United States' claims  that China's statement concerning the NDRC's 
practice serves to demonstrate inconsistencies with the obligations under Paragraph 116 to 
administer TRQs on a predictable basis and to use clearly specified administrative procedures. 
China's legal instruments set out the usage requirements for wheat and corn as generally applicable 
in all circumstances. As mentioned in the preceding paragraph, China has pres ented no evidence 
that applicants and other interested parties are made aware of the NDRC's stated practice of not 
enforcing the usage requirements and imposing penalties if a recipient is found to be "unable to 
process its full allocation for unexpected r easons". China's statement concerning the NDRC's practice 
therefore demonstrates that applicants and other interested parties cannot easily anticipate how the 
NDRC, in practice, enforces the usage requirements for wheat and corn, in violation of the obliga tion 
to administer TRQs on a predictable basis. Similarly, China's statement demonstrates that the NDRC, 
in practice, enforces the usage requirements in a manner that is not set out in plain or obvious 
detail, in violation of the obligation to administer T RQs using clearly specified administrative 
procedures.  
7.1.4.6.4.2   Usage requirement for rice imported under TRQ  allocations  
7.155.   The usage requirem ent for rice imported under TRQ allocations  is set out in the 2017 
Allocation Notice and quoted above in paragraph 7.138 . According to this requirement, a recipient 
of a rice TRQ allocation must organize the sale of the imported rice in its own name. Group 
enterprises may only submit a s ingle application and must apply  for rice TRQ allocations  either in 
the name of the headquarters or a subsidiary enterprise. For group enterprises, imported rice must 
be organized for sale in the name of the enterprise that ap plied for the rice TRQ allocat ion, be that 
the headquarters or a subsidiary enterprise.354 The United States claims that these requirements 
violate the obligation to administer TRQs in a manner that would not inhibit the filling of each TRQ.  
7.156.   In its first written submission, the United St ates quotes the text of the usage requirement 
for rice, set out in the 2017 Allocation Notice, and argues that this requirement, like the usage 
requirements for wheat and corn, "raises uncertainty and therefore increases costs for a TRQ 
Certificate  holder"  and "incentivizes applicants to request a smaller TRQ amount than it may 
otherwise wish to receive for commercial purposes".355 When asked for further elaboration, the 
United States argues that the requirement for rice "constrains the TRQ holder's ability t o respond as 
                                                
350 See United States' openings statement at the first meeting of the Panel, para. 54; and second 
written submission, paras . 57-58. 
351 We note China's statement that:  
As China has explained, NDRC does not monitor compliance with the processing requirement on a daily 
basis, nor does NDRC operate any kind of application and approval process for recipients that need to transfer 
grains due t o an unexpected lack of processing capacity. Applicants are therefore aware of the possibility of not 
complying in those circumstances where they are "unable to process [their] full allocation for unexpected 
reasons" because NDRC would not enforce  the proc essing requirement in those circumstances. (China's 
response to Panel question No. 57(d), para. 32).  While China asserts that applicants are aware of the NDRC's 
stated practice, we find nothing in the record of these proceedings to substantiate this asserti on. 
352 United States' second written submission, paras. 57 -58. 
353 China's response to Panel question No. 58, para. 33.  
354 China's response to Panel question No. 59(c), para. 39. The United States does not take issue with 
this explanat ion. 
355 United States' first written submission, para. 216. (emphasis original)  WT/DS517/R  
 
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  business needs or plans change, fosters uncertainty, and therefore increases costs for a TRQ 
Certificate holder"356 and that it is " a restriction on normal business practices and therefore make [s] 
it more burdensome to import rice ".357 
7.157.   Taking into  account the entirety of the United States' arguments concerning the usage 
requirement for rice, it is still not clear to us how this requirement " constrains the TRQ holder's 
ability to respond as business needs or plans change " or in what way  it poses " a restriction on normal 
business practices and therefore make [s] it more burdensome to import rice ". 
7.158.   At times, the United States appears to argue that the usage requirement for rice would 
inhibit t he filling of China's TRQs in the same manner as the  usage requirements for wheat and 
corn.358 Yet the usage requirements for wheat and corn require that imported wheat and corn be 
processed in the recipient's own plant. The United States does not specifically argue that such a 
processing requirement app lies to rice imported under TRQ allocations . At other times, the United 
States argues that it "understands Article  V(2) to require … that the rice should be bagged and 
marketed to downstream consumers by that entity itself, under its own name".359 China, however,  
rejects this interpretation, arguing that the usage requirement for rice " only requires a recipient to 
sell the rice imported under the TRQ itself, without imposing any other restrictions such as the types 
of buyers, the appearance of the seller's names o n the bag, etc ".360 In response, the United States 
argues that China "does not clarify whether [recipients] must self -process the rice in the production 
of some downstream product"361 and points to China having "conceded that the term 'organize for 
sale' is co nfusing" .362 
7.159.   The United States has challenged the usage requirement for rice only under the obligation 
to administer TRQs in a manner that would not inhibit the filling of each TRQ. In our view, this 
requires the United  States to demonstrate not only that the usage requirement for rice is confusing 
or lacks clarity, but also that it has a restraining effect on the filling of China's rice TRQ. In this 
regard, we recall that " [a] complaining party may not simply submit evidence and expect the panel 
to divine from it a claim of WTO -inconsistency ".363 Therefore, we find that the United  States has not 
made a prima facie  case that the usage requirement for rice violates China's obligation to administer 
TRQs in a manner that would not inhibit the filling of each  TRQ. 
7.160.   The United States also submits that the requirement for group ent erprises applying for a rice 
TRQ allocation would inhibit the filling of China's  TRQs, arguing that "an enterprise with subsidiaries 
must not apply in the same TRQ year as its subsidiar y" and that "[t]he requirement therefore has 
the effect of inh ibiting the filling of the TRQs ".364 Again, the United States fails to explain how the 
requirement for group enterprises would inhibit the filling of China's rice TRQ . Therefore, this 
argument by the United States also falls short of making a prima facie  case that China violates the 
obligation to administer TRQs in a manner that would not inhibit the filling of each TRQ.  
7.1.4.6.5   Conclusion  
7.161.   For the reasons set out above, we find that the usage requirements for wheat and corn are 
inconsistent with the obligations, set forth in Paragraph 116 of China' s Working Party Report, to 
administer TRQs on a predictable basis, to use clearly specified administrative procedures, and to 
administer TRQs in a manner that wou ld not inhibit the filling of each TRQ. We further find that the 
United States has not made a prima facie  case that the usage requirement for rice is inconsistent 
with the obligation, set forth in Paragraph  116, to administer TRQs in a manner that would no t inhibit 
the filling of each TRQ.  
                                                
356 United States' response to Panel question No. 32, para. 117.  
357 United States' response to Panel question No. 32, para. 119.  
358 See, e.g. United States' response to Panel question No. 72, para. 48.  
359 United States' response to Panel question No. 18(b), para. 50.  
360 China's response to Panel question No. 59(a), para. 37. See also China's response to Panel question 
No. 59(b), para. 38.  
361 United States' response to Panel questi on No. 72, para. 49.  
362 United States' response to Panel question No. 72, para. 50.  
363 Appellate Body Report, US – Gambling , para. 140.  
364 United States' response to Panel question No. 32, para. 118.  WT/DS517/R  
 
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  7.1.5   Overall assessment of China's TRQ administration under Paragraph 116  
7.162.   The United States challenges China's administration of its wheat, rice , and corn TRQs under 
six of the obligations set forth in Paragraph 116 of China's  Working Party Report. Each of the alleged 
violations of these six obligations challenges specific aspects of China's TRQ administration. In the 
preceding sections, we have assessed the United States' claims against those specific aspects of 
China's TRQ ad ministration. In so doing, we have also highlighted, where relevant, the interlinkages 
between some of the specific aspects. As indicated in paragraph 7.13 above, we will, in this section, 
provide a holistic assessment of the compatibility of China's TRQ administration with the obligations 
set forth in Paragraph 116, by synthesizing our analyses  regarding the individual aspects of China's 
TRQ administration . 
7.163.   The measure at issue, namely, China's administration of its wheat, rice , and corn TRQs, 
consists of relevant legal instruments adopted by China, such as the 2003 Provisional Measures and 
the annual allocation and reallocation notices, as well as the practice of the relevant government 
agencies, in this case the NDRC. Essentially, China's TRQ administration comprises rules and 
practices that regulate the TRQ application process; the NDRC's eval uation of the applications to 
determine whether applicants are eligible to receive TRQs and what TRQ amounts to allocate, 
including through seeking comments from the public; the granting of TRQ certificates; the process 
for importation under allocated TRQ amounts; the us e of wheat, rice , and corn imported under TRQs; 
the return of unused TRQ amounts; and the reallocation of returned TRQ  amounts . The United States 
has brought claims with respect to all of these aspects, arguing violations of various obligati ons set 
forth in Paragraph 116.  
7.164.   The first stage in China's TRQ administration is the initial allocation proces s. This process 
starts with applicants submitting their applications  and related materials  to the NDRC's local 
agencies . At this stage, applicants  must show their compliance with the basic eligibility criteria , set 
out in the annual allocation notices . Above, we have found the four basic eligibility criteria the 
United  States challenge s to be vague, and therefore inconsistent with the obligations to  administer 
TRQs on a transparent and predictable basis, and  to use clearly specified requirements. We have 
also found the NDRC's stated practice of assessing eligibility on the basis of whether an applicant 
appears on Credit China's  blacklist , and disrega rding the remaining basic eligibility criteria set out in 
the annual allocation notices,  to be inconsistent with the obligations to administer TRQs on a 
transparent, predictable , and fair basis, and to use clearly specified requirements. Given that the 
basic eligibility criteria determine which applicants will receive TRQs, our findings about these criteria 
indicate that the very foundation of China's TRQ administration is flawed. Indeed, China also 
acknowledges this flaw  in stating that its legal instrumen ts should be updated to better reflect the 
NDRC's practice . 
7.165.   Once the NDRC has decide d which applicants are  eligible to receive TRQ  allocations , it 
determin es the TRQ amounts that will be allocated to the eligible applicants. The interlinkage 
between the basic eligibility criteria and allocation principles is obvious: the NDRC o nly considers 
eligible applicants in the allocation of TRQ amounts . Allocation decisions are made by applying the 
allocation principles , set out in the annual allocation notices . Above, we have found elements  of the 
allocation principles to be vague, and therefore inconsistent with the obligations to administer TRQs 
on a transparent and predictabl e basis, and to use clearly specified administrative procedures. We 
have also found the NDRC's stated practice of giving the most weight to actual import performance , 
rather than taking into account all allocation principles set out in the annual allocatio n notices,  to be 
inconsistent with the obligations to administer TRQs on a transparent, predictable , and fair basis. 
Our findings about  the allocation principles show that, like the NDRC's determination of applicants' 
eligibility to receive TRQs, the NDRC' s determination of what TRQ amounts to allocate is also based 
on unclear rules and principles.  
7.166.   Before allocating TRQs to eligible applicants, the NDRC  conducts a public comment p rocess. 
While the evidence on the record shows  that the NDRC seeks the public' s comments on the enterprise 
data contained in the received TRQ application forms , China's legal instruments do not explain the 
details of this process, incl uding, importantly, whether applicants are informed of comments about 
their applications and have a n opportunity to rebut any such comments. We have found this to be 
inconsistent with the obligations to administer TRQs on a transparent, predictable , and fair basis, 
and to use  clearly specified administrative procedures. The public's comments are relevan t to the 
NDRC's assessment of applicants ' eligibility and the allocation of TRQ amounts to eligible applicants. 
The ambiguity in the public comment process therefore carries over, and adds to, the vagueness in WT/DS517/R  
 
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  the basic eligibility criteria  and the allocat ion principles . Just as applicant s are not aware,  at the 
outset , of the criteria and principles for assessing  their application s, they are also not aware , at the 
public comment stage, whether the public has commented on their application s, and if so, whether 
they would have a chance to rebut any such comments.  Taken together, our findings on the basic 
eligibility criteria, the allocation principles, and th e public comment process show that the actors in 
the market are not able to know on what basis the ND RC decides who will receive TRQ allocations  
and in what amounts.  
7.167.   One important aspect of China' s TRQ administration is the distinction between the STE and 
non-STE portions of TRQs. This distinction is important because, as we observed above, the 
procedure for the importation of wheat, rice , and corn under an STE portion involves additional 
requirements compared to the procedure for importation under a non -STE portion. Above, we made 
findings of violation about the administration of STE and non -STE portions of TRQs in three regards.  
7.168.   First, we have found that whereas China's legal instruments suggest that non -STE applicants 
can receive STE as well as non -STE po rtions of TRQs, those instruments do not  expla in the basis on 
which the NDRC allocates these two different portions, and whether applicants can apply for one or 
the other of these portions. We have found this to be inconsistent with the obligations to admi nister 
TRQs on a transparent and predictable basis, and to use clearly specified administrative procedures.  
7.169.   Second, we have found the NDRC's stated practice of allocating the entire STE portions of 
TRQs to China's designated STE COFCO and not requiring COF CO to return unused TRQ amounts, 
without regard for the rules and principles set out in its legal instruments, to be inconsistent with 
the obligations to administer TRQs on a transparent, predictable , and fair basis, and to use clearly 
specified administra tive procedures. This stated practice, we have found, also inhibits the filling of 
China's TRQs by precluding non -STE applicants from applying for reallocation of COFCO's unused 
TRQ amounts.  
7.170.   Third, we have found that the additional requirements in the pro cedure for importation under 
STE portion s of TRQs , as well as the lack of clarity as to how it operates, is inconsistent with the 
obligations to administer TRQs on a predictable basis and to use clearly specified administrative 
procedures. We have also foun d that this could prevent non -STE recipients from being able to use 
allocated STE portions of TRQs prior to the 15 September deadline for returning unused TRQ 
amounts. This would not only preclude TRQ recipients from importing grains under their allocated 
STE portions of TRQs but would also prevent them from applying for reallocation of returned TRQ 
amounts and prejudice  their chances of receiving TRQ allocation s in the future, in a manner that 
would inhibit the filling of each TRQ. We recall that China's T RQ administration comprises two types 
of penalties for non -use of TRQ allocations. First, recipients that are unable t o fully use their allocated 
TRQ amounts  and fail to return unused amounts to the NDRC by 15 September w ill see their future 
TRQ allocation s deducted proportionate to the amount that they have failed to return. Second, 
recipients that fail to fully use their allocated TRQ amounts  during two consecutive years are subject 
to the same deductions to their TRQ allocations in the following year, ev en if they return unused 
amounts by 15 September.  
7.171.   After importing  grains  under their TRQ allocations, recipients are subject to the usage 
requirements set out in the annual allocation notices. As noted above, a recipient of a wheat or corn 
TRQ allocation must process the wheat or corn imported under its TRQ allocation in its own plant. 
Above, we have found that the usage requirements for wheat and corn inhibit the filling of China's  
TRQs because they restrict recipients' ability to process and sell wheat a nd corn imported under 
their TRQ allocations in the most efficient or commercially preferable  manner. Since non -use of TRQ 
allocations results in penalties in the form of deductions in TRQ allocations in the following year, 
applicants may tend to apply for  smaller TRQ amounts than they would have in the absence of the 
usage requirements. We have also found the NDRC's stated practice of not imposing penalties on 
recipients that are unable to process their imported wheat and corn for unexpected reasons to be 
inconsistent with the obligations to adminis ter TRQs on a predictable basis  and to use clearly 
specified administrative procedures. The usage requirements are an important component of China's 
TRQ administration because they prescribe how TRQ recipients sh ould dispose of the wheat and corn 
that they import under their TRQ allocation s. The inconsistencies we have found in these 
requirements indicate that China's TRQ administration contains flaws on how TRQ recipie nts are 
required to use the grains  imported under their  TRQ allocations . WT/DS517/R  
 
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  7.172.   The final stage of China's TRQ administration , which we have discussed above , is the 
reallocation stage. Unused TRQ amounts must be returned, by 15 September, to the NDRC for 
reallocation. Above, we have found that China's legal instruments contain diverging provisions with 
respect to the basis on w hich th e NDRC reallocates returned  TRQ amounts, and concluded that this 
is inconsistent with the obligation to administer TRQs using clearly specified administrative 
procedures. This finding shows that there continues to be ambiguity in China's TRQ administration  
throughout the process.  
7.173.   These findings demonstrate that China's TRQ administration contains legal flaws from the 
beginning through to the completion of the process. On this basis, we conclude that China's TRQ 
administration , as a whole , is inconsistent wi th the obligations, set forth in Paragraph 116, to 
administer TRQs on a transparent, predictable , and fair basis, using clearly specified administrative 
procedures and requirements that would not inhibit the filling of each TRQ.  
7.2  Claim under Article XIII:3( b) of the GATT 1994  
7.2.1   Introduction  
7.174.   The United States claims  that China violates Article XIII:3(b) of the GATT 1994 by not 
providing public notice of  the total TRQ amount s that are actually allocated at the initial allocation 
stage, and the changes to that am ount, which occur at the time unused TRQ s are returned and 
reallocated.365 China rejects the  entirety of the  United  States' claim.  
7.2.2   Legal provision  
7.175.   Article XIII of the GATT 1994 is entitled "Non -discriminatory Administration of Quantitative 
Restrictions". Its paragraph 3(b) states as follows:  
In the case of import restrictions involving the fixing of quotas, the contracting party 
applying the restrictions shall give public notice of 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. Any supplies of the product in 
question which were en route at the time at which public notice was given shall not be 
excluded from entry; Provided  that they may be counted so far as practicable, against 
the quantity permitted to be imported in the period in question, and also, where 
necessary, against the quantities permitted to be im ported in the next following period 
or periods; and Provided  further that if any contracting party customarily exempts from 
such restrictions products entered for consumption or withdrawn from warehouse for 
consumption during a period of thirty days after the day of such public notice, such 
practice shall be considered full compliance with this subparagraph.  (Emphasis original)  
7.176.   This provision has not yet been addressed in WTO dispute settlement . 
7.177.   Article XIII:5 clarifies that Article XIII applies to TRQs:  
The provisions of this Article shall apply to any tariff quota instituted or maintained by 
any contracting party, and, in so far as applicable, the principles of this Article shall also 
extend to export restrictions.  
7.2.3   Main arguments of the parties  
7.178.   The United States argues  that China violates the obligation set forth in Article XIII:3(b) of 
the GATT 1994 to "give public notice of the total quantity or value of the product or products which 
will be permitted to be imported during a specified future pe riod" by not providing public notice of  
the TRQ amounts that are actually allocated at  the initial allocation stage. In the United States' view, 
public notice of the total TRQ amounts that are available for allocation  does not suffice to meet this 
obligati on.366 The United States further argues that China vio lates the obligation in Article  XIII:3(b) 
to "give public notice of … any change " in the total quantity or value of the product or p roducts which 
                                                
365 United States' first written submission, para. 272.  
366 United States' first written submission, paras. 276 -277. WT/DS517/R  
 
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  will be permitted to be imported by not providing public n otice of changes to the total amounts of 
TRQs actually allocated. In the United States' view, this part of the provision requires public notice 
of the total amount of returned TRQs and the total amount of reallocated TRQs.367 
7.179.   China submits that Article  XIII:3(b) requires public notice of the total quantity or value of 
the products that are "initially" fixed, that is the total amounts of TRQs that are initially made 
available, and not the amounts of TRQs actually allocated, as the United States argues.368 In oth er 
words, this provision requires "only the publication of the total TRQ quantities for wheat, rice, and 
corn, as provided in China's Schedule CLII".369 China also submits that the changes i n the total 
quantity or value for  which public notice should be give n, are the changes to the total TRQ amounts 
that are initially fixed or made available for allocation.370 
7.2.4   Analysis by the Panel  
7.180.   Factually, it is undisputed that China gives public notice of the total TRQ amounts available 
for allocation each year. Thus far, these amounts have always corresponded to the total TRQ 
amounts fixed in China's Schedule  CLII.371 It is also undisputed that China does not give public notice 
of the TRQ amounts that are actually allocated, returned and reallocated . 
7.181.   Thus, the only issues for us to consider are ones of legal interpretation. Initially, we have to 
examine whether the obligation under Article XIII:3(b) of the GATT 1994 to "give public notice o f 
the total quantity or value of the product or products which will be permitted to be imported during 
a specified future period" refers to the total TRQ amounts available for the initial allocation or to the 
total TRQ amounts that are actually allocated a t the initial stage. We must also consider the meaning 
of the obligation to " give public notice of … any change  in such quantity or value".  As both parties 
acknowledge, the second part of Article  XIII:3(b) requires public notice of any changes to what i s 
consider ed to be the object of the initial public notice obligation. Hence, the critical question for us 
is what is the object of the initial public notice obligation  under Article  XIII:3(b).  
7.182.   We find it useful to start our interpretation of paragraph 3(b) o f Article XIII by examining 
the structure of Article XIII, and clarifying the place of paragraph 3(b) in that structure. Article XIII 
contains five paragraphs. The first paragraph sets out the basic principle of non -discrimination in 
the administration of import restrictions.372 The second paragraph sets forth rules concerning the 
methods for applying import restrictions and the distribution of trade whereas the third paragraph 
requires different types of public notice, depending on the kind of method used. F inally, the fourth 
paragraph explains the details of the process in situations where a quota is allocated among 
supplying countries.  
7.183.   In our view, the most relevant parts of Article XIII for the interpretative issues before us are 
paragraph 2 and the other subparagraphs  of paragraph 3.  
7.184.   Paragraph 2 of Article XIII explains how trade should be distributed by Members applying 
import restrictions. The chapeau of this paragraph sets out the main principle that import restrictions 
should be administered in such a way that the distribution of trade approaches "as closely as possible 
the shares that various Members may be expected to obtain" in the absence of the restrictions.373 
This paragraph then goes on to list, in its subparagraphs (a) throu gh (d), "specific instances of 
authorized forms of allocation" .374 Subparagraph (a) stipulates that, "wherever practicable, quotas 
representing the total amount of permitted imports (whether allocated among supplying countries 
or not) shall be fixed, and not ice given of their amount in accordance with paragraph 3( b) of this 
Article". Subparagraph (b) states that "in cases in which quotas are not practicable, the restrictions 
may be applied by means of import licences or permits without a quota". Hence, these two 
                                                
367 United States' first written submission, paras. 278 -281. 
368 China's first written submission, para. 85.  
369 China's first written submission, para. 83. See also ibid. paras. 84 -86. 
370 China's first writte n submission, para. 87. 
371 For instance, the Allocation Notices for 2016  and 2017 refer to such total amounts. See 2016  
Allocation Notice, (Exhibit US A-16), Article I and the 2017 Allocation Notice, (Exhibit USA -15), Article I.  
372 Panel Reports , EC – Bananas III , para. 7.69.  
373 Appellate Body Reports , EC – Bananas III ( Article 21.5 – Ecuador II) / EC – Bananas III (Article 21. 5 
– US), para. 338.  
374 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 
– US), para. 338. WT/DS517/R  
 
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  subparagraphs express a preference for the use of quotas over  the use of import licences or permits. 
Subparagraph (c)  states that, except where quotas are allocated among supplying countries as 
provided for in subparagraph (d), Members shall not requir e that import licences or permits be 
utilized for importation from a particular country or source. Subparagraph (d) explains how 
allocations will be calculated in cases where the importing country allocates a quota among different 
supplying countries.  
7.185.   Hence, paragraph 2 identifies two ways of "applying  import restrictions ", namely (i) by fixing 
the total amount of a quota and (ii) by using import licences or permits. It also sets forth obligations 
to be observed in cases where a quota is allocated among dif ferent supplying countries.  
7.186.   Paragraph 3 of Article XIII lays down two sets of rules concerning publication or notification  
in the administration of TRQs, each corresponding to one of the two ways of a pplying  TRQs described 
in its paragraph  2. Thus, subpar agraph (a) of paragraph 3 explains the notification  requirements 
"[i]n cases in which import licences are issued in connection with imp ort restrictions". 
Subparagraph  (b) addresses the notification  requirements "[i]n the case of import restrictions 
involvi ng the fixing of quotas". Subpara graph (c) sets out the notification  requirements "[i]n the 
case of quotas allocated among supplying countries".  
7.187.   We find it important to note that each of the subparagraphs of paragraph 3 requires notice 
of different types o f information, under different circumstances. For example, subparagraph  (a) 
requires the importing Member to provide "upon request of any contracting party having an interest 
in the trade in the product concerned, all relevant information concerning the ad ministration of the 
restrictions, the import licences granted over a recent period and the distribution of such licences 
among supplying countries". Subparagraph (b), the provision at issue in this dispute, requires the 
importing Member to "give public not ice of 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". Subparagraph (c) requires the importing Member to "promptly inform all other  
contracting parties having an interest in supplying the product concerned of the shares in the quota 
currently allocated, by quantity or value, to the various supplying countries and shall give public 
notice thereof".  
7.188.   This overview of the obligations in A rticle XIII shows that the drafters designed this provision 
in such a way that an importing Member is subject to a particular publication or notification obligation 
depending on how it administers quantitative restrictions and TRQs. In this case, China's T RQs are 
administered by fixing their total amounts. The United States has brought a claim under 
paragraph  3(b), which is the provision that describes the public notice obligations in cases involving 
the fixing of quotas or TRQs. As noted above, the issue b efore us  is what is the object of the initial 
public notice obligation to "give public notice of the total quantity or value of the product or products 
which will be permitted to be imported during a specified future period"  under Article  XIII:3(b). Is it 
the total  TRQ amounts that are available for allocation or the total amounts of TRQs that are actually 
allocated?   
7.189.   The United  States notes that the dictionary meaning of "permit", which appears in the text 
of Article XIII:3(b), is to "[a]llow the doing or occurrence of; give permission or opportunity for", or 
"[a]llow or give consent to (a person or a thing) to do or experience something", and argues that, 
therefore, the obligation under Article  XIII:3(b) "refers to those amounts for which consent is given 
for actual importation during a specified period".375 Therefore, the United States argues that, at the 
initial stage of TRQ distribution, Article XIII:3(b) requires China to give public notice of "the total 
amounts authorized on the TRQ Certificates issued to selected applicants".376 
7.190.   As argued by the United St ates, the dictionary meaning of "permit" refers, among other  
things, to "[a]llow the doing or occurrence of; give permission or opportunity for", or "[a]llow or 
give consent to (a person or a thing) to do or experience something". However, it is not clear to us 
how the United States infers  from this dictionary definition that, at the in itial allocation stage, 
Article  XIII:3(b) requires public notice of the total TRQ amounts actual ly allocat ed to TRQ applicants, 
as opposed to the total TRQ amounts available  for allocation . In our view, given the nature of a TRQ , 
which fixes the total amount of products that may be imported at a reduced in -quota rate, "give 
permission or opportunity for" would be better interpreted as referring to the total quantity or value 
                                                
375 United States' first written submission, para. 270.  
376 United States' first written submission, para. 276. WT/DS517/R  
 
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  of the TRQ, and not to the amount of actual allocations made by the NDRC. By definition, a TRQ is 
available for allocation  among applicants provided they meet certain conditions laid down in the 
importing  Member's laws and regulations. In other words, appli cants are given permission or 
opportunity to import goods at the in -quota rate, up to the total TRQ amounts available  for allocation . 
This suggests that the  obligation in Article XIII:3(b) to "give public notice of the total quantity or 
value of the produc t or products which will be permitted to be imported during a specified future 
period"  should be interpreted as requiring public notice of the total TRQ amount s available for 
allocation to all applicants.  
7.191.   In our view, our interpretation accords with the ov erall structure of Article XIII, outlined 
above, and the forward -looking nature of the public notice obligation set forth in paragraph 3(b).  
7.192.   We recall that "[i]n cases in which import licences are issued in connection with import 
restrictions", paragraph 3 (a) of Article XIII requires the importing Member to provide "all relevant 
information concerning the administration of the restrictions, the import licences granted over a 
recent period and the distribution of such licences amount supplying countries". This obligation thus 
requires the provision o f information regarding the administration of restrictions and the licences 
granted over a past period.  In contrast, paragraph 3(b) sets out a forward -looking public notice 
obligation "[i]n the case of import restrictions involving the fixing of quotas", r equiring public notice 
of "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". In our view, whereas 
the obligation in paragraph 3(a) re quires the importing Member  to provide information concerning 
its administration and the import licences actually granted by it over a recent period, the forward -
looking  obligation in paragraph 3(b) requires public notice of the total TRQ amounts that are 
available for allocation during a specified future period.  
7.193.   This view also finds support in the negotiating history of the GATT. 
The Report  of the Sub-Committee on Quantitative Restrictions and Exchange Control, dated 
21 November 1946, states in relevant pa rt: 
It was generally agreed that Members should undertake to supply adequate information 
about the administration of their import restrictions. In cases in which import licences 
were used, information should be supplied at the request of any Member having a 
substantial interest in the trade about the administration of the licenses and about the 
licenses granted, but there should be no obligation to reveal the names of importing or 
supplying firms. Where quotas were fixed, public notice should be given in advance  of 
the size of the quota; and where the quota is allocated among supplying countries all 
Members having an interest in supplying the product should be given prompt notice of 
the shares of the various countries in the quotas.377  
7.194.   This document demonstra tes that the drafters' intended , in cases where import restrictions 
are administered through the fixing of a quota, that public notice should be given "in advance  of the 
size of the quota ".378 In our view,  the use of the term "in advance" reinforces the view  that, where 
a quota or a TRQ is fixed, public notice of the total amount of the quota  or the TRQ should be  
provided before traders decide to engage in  the importation  of the relevant product . To us, prior 
public notice mean s public notice of  the total amo unt of fixed quotas  or TRQs available for allocation. 
Public notice of the total amounts of quotas or TRQs actually allocated would, in our view,  be ex post. 
7.195.   We note the United States' argument that "China's pro forma  announcement each year of 
the total TRQ quantities that it has committed to provide in its Schedule is not sufficient".379 In the 
same vein, the European Union , a third party,  argues that China's int erpretation would render 
paragraph  3(b) inutile  because the total amount of initially -fixed TRQs is already indicated  in 
China's  Schedule  CLII.380 We disagree with this argument, for two reasons. First, not all TRQs are 
                                                
377 United Nations - Economic and Social Council - Preparatory Committee of the International 
Conference on Trade and Employment - Commit tee II - Report of the Sub -Committee on Quantitative 
Restrictions and Exchange Control, p. 17.  (emphasis added)  
378 United Nations - Economic and Social Council - Preparatory Committee of the International 
Conference on Trade and Employment - Committee II - Report of the Sub -Committee on Quantitative 
Restrictions and Exchange Control, p. 17.  
379 United States' first written submission, para. 277.  
380 European Union's response to Panel question No. 3, para. 57.  WT/DS517/R  
 
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  found in the Schedules  of Members main taining such TRQs. There are autonomous TRQs that 
Members adopt without an international obligation to do so. Article XIII:3(b) applies to such TRQs, 
and allows WTO Members and their exporters to know the total quantity or value of imports that will 
be per mitted under such TRQs during a specified future period. Second, Article XIII:3(b) would also 
require public notice  in cases where a Member decides to increase the quantity or value of its TRQ 
beyond the quantity or value set forth in its Schedule.  
7.196.   These c onsiderations all suggest  that the object of the initial notice requirement under 
Article  XIII:3(b) is the total TRQ amount s that are available for allocation . It follows from this that 
the obligation under Article XIII:3(b) to provide public notice of  "any change in such quantity or 
value" refers to changes in the total amount s of TRQs available for allocation . 
7.2.5   Conclusion  
7.197.   For the reasons set out above , we conclude that Article XIII:3(b) of the GATT  1994 requires 
public notice of the  total TRQ amount s that are available for allocation , and any changes thereto, 
and not the total TRQ amounts that are actually allocated , and changes hereto. We  therefore reject 
the United States' claim that China violates Article XIII:3(b) by publishing only the TRQ amounts  
available for allocation, and any changes thereto.  
7.3  Claim under Article X:3(a) of the GATT 1994  
7.3.1   Introduction  
7.198.   The United States claims  that China fails to administer its TRQs in a reasonable manner, in 
violation of Article X:3(a) of the GATT 1994. Under thi s claim, the United States takes issue with 
several specific aspects of China's TRQ administration, namely (a)  the basic eligibility criteria, 
(b) the allocation principles, (c) the use of numerous local agencies, (d) the use of a public comment 
process, (e) the administration of STE and non -STE portions of TRQs, and  (f) the extent of the public 
notice provided in connection with allocation, return and reallocation of TRQs. China rejects the 
entirety of the United States' claim.  
7.3.2   Legal provision  
7.199.   Article X:3( a) of the GATT 1994 reads as follows:  
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.  
7.200.   Article X:1 of the GATT 1994 reads as follows:  
Laws, regulations, judicial decisions and administrative rulings of general application, 
made effective by any contracting party, pertaining to the classification or the valuation 
of products for customs purposes, or to rates of duty, tax es or other charges, or to 
requirements, restrictions or prohibitions on imports or exports or on the transfer of 
payments therefor, or affecting their sale, distribution, transportation, insurance, 
warehousing inspection, exhibition, processing, mixing or  other use, shall be published 
promptly in such a manner as to enable governments and traders to become acquainted 
with them. Agreements affecting international trade policy which are in force between 
the government or a governmental agency of any contract ing party and the government 
or governmental agency of any other contracting party shall also be published. The 
provisions of this paragraph shall not require any contracting party to disclose 
confidential information which would impede law enforcement or otherwise be contrary 
to the public interest or would prejudice the legitimate commercial interests of particular 
enterprises, public or private.  
7.201.   Paragraph 3(a) of Article X stipulates that laws, regulations, decisions and ruli ngs of the kind 
described in  paragraph  1 have to be administered in a uniform, impartial and reasonable manner. 
Paragraph  1, in turn, provides a comprehensive list encompassing laws, regulations, judicial WT/DS517/R  
 
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  decisions and administrative rulings of general application, concerning, among o ther things, rates of 
duty, taxes or other charges, on imports.  
7.202.   There have been a  number of disputes involving the  interpretation of Article X:3(a). 
Generally speaking, Article X:3 is considered to establish minimum standards for transparency and 
procedura l fairness in the administration of trade regulations.381 A threshold issue is to distinguish 
the substance of the challenged measure from its administration since it is only the administration 
that can be challenged under Article  X:3(a).382 Article X:3(a) applies not only to the administration 
of the relevant laws or regulations in particular cases, but also to legal instruments that govern such 
administration.383 Uniformity, impartiality and reasonableness, within the meaning of Article  X:3(a ), 
are legally independent obligations, thus an inconsistency with any of these three obligations will 
lead to a violation of this provision.384 
7.3.3   Main arguments of the parties  
7.203.   The United States argues that China fails to administer its wheat, rice, and corn TRQs in a 
reasonable manner in respect of several specific aspects of its administration. First, the United States 
argues that the basic eligibility criteria and the allocation principles are vague and undefined, which 
"undermines the ability of applicants to reasonably comply" with them385 and "hamper[s] TRQ 
applicants who are rejected from understanding the reasons for their denial" and from "correcting 
or improving applications in the future".386 Second, the United States contends that numerous local 
agencies  are authorized to interpret the basic eligibility criteria, which may lead to inequitable 
application of such.387 Third, the United States argues that the use of a public comment process 
without guidance on how such comments are "vetted or considered", "exa cerbates" the 
unreasonable nature of China's TRQ administration as it could "introduce bias or inequity due to the 
potential motivations of a submitter".388 Fourth, the United  States argues that the allocation of STE 
and non -STE portions of TRQs through a si ngle application process prevents applicants from being 
able to choose or anticipate which type of TRQ they may receive and therefore limits applicants' 
ability to "anticipate and commercially plan" for the type of TRQ allocation they receive.389 Fifth, 
the United States argues that the Chinese authorities do not publish information regarding the 
allocation, return and reallocation of TRQs, which deprives applicants and other market participants 
of information necessary to understand the allocation process an d to connect buyers and sellers in 
the grains market.390 
7.204.   China rejects the United States' assertion that China's administration of its TRQs is not 
reasonable within the meaning of Article X:3(a), generally arguing that the United States has to 
show that the challenged legal instruments "necessarily lead[]" to a lack of reasonable 
administration.391 
7.205.   With respect to the basic eligibility criteria and the allocation principles, China reiterates its 
view of how the NDRC, in practice, determines applicants' eligibil ity and the amounts of TRQs to be 
allocated.392 While China acknowledges that the basic eligibility criteria should be updated to better 
reflect the NDRC's  practice, it does not consider that the United States has demonstrated that these 
criteria necessarily  lead to unreasonable administration or cause any negative impact on 
applicants.393 China similarly argues that the United States has failed to show that the allocation 
                                                
381 Panel Reports, China – Raw Materials , para. 7.685.  
382 Appellate Body Report, EC – Bananas III , para. 200.  
383 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.873 . 
384 Panel Reports, Argentina – Hides and Leather , para. 11.86; China – Raw Materials , para. 7.685; 
Thailand – Cigarettes (P hilippines) , para. 7.867; and Dominican Republic – Import and Sale of Cigarettes , 
para. 7.383.  
385 United States' first written submission, para. 232.  
386 United States' first written submission, para. 238. See also United States' first written submission, 
para. 244.  
387 United States' first written submission, paras. 230 and 249.  
388 United States' first written submission, paras. 230 and 253.  
389 United States'  first written submission, paras. 230 and 257 -260. 
390 United States' first written submission, paras. 230 and 262 -266; and response to Panel question 
No. 20, para. 60.  
391 China's first written submission, paras. 30 -31. 
392 China's first written submission, par as. 35 -38 and 49 -50. 
393 China's opening statement at the first meeting of the Panel, para. 14 and response to Panel question 
No. 8(f), para. 27.  WT/DS517/R  
 
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  principles necessarily lead to unreasonable administration.394 As for the use of numerous l ocal 
agencies, China contends that the United States' argument is without merit since the local agencies 
are not authorized to conduct a substantive review of applications, and that their role is limited to 
receiving the applications, making sure they are complete , and then forwarding them to the NDRC 
for the substantive assessment.395 Concerning the public comment process, China submits that the 
United States' concerns are unfounded since the NDRC , in practice,  verifies information received 
from the public, provides applicants an opportunity to rebut any such comments, and only takes into 
account comments that have been verified.396 With respect to the STE and non -STE portions of 
TRQs, China maintains that, in practice, non -STE applicants  do not receive STE por tions of TRQs, 
which are allocated entirely to COFCO, and that therefore this argument has no basis.397 As regards 
public notice, China contends that the United States does not present sufficient evidence to support 
its allegation that the lack of public not ice of the TRQ amounts that have been allocated, returned 
and reallocated prevents traders from entering i nto arrangements to utilize TRQs.398 In China's view, 
the information that China publishes does allow participants to enter into commercial 
arrangements .399 
7.206.   In response to China's assertions regarding the NDRC's practice concerning the basic 
eligibility criteria as well as the STE and non -STE portions of TRQs, the United States submits that 
China has not substantiated i ts assertions and that the stat ed prac tice, in any event, further 
demonstrates China's violation of Article X:3(a).400 
7.3.4   Analysis by the Panel  
7.207.   In examining the United States' claim under Article X:3(a) of the GATT 1994, we make the 
following observations.  
7.208.   The United States has also challenged Chin a's administration of its wheat, rice, and corn 
TRQs under Paragraph 116 of China's Working Party Report, including under China's obligations to 
administer its TRQs on a transparent, predictable, and fair basis. In paragraphs 7.47, 7.74, 7.85, 
7.116 , and 7.161 above , we have  found a violation of these specific obligations under Paragraphs 
116 in respect of China's TRQ a dministration.  
7.209.   We also note that the obligations laid down in Paragraph 116 of China's Working Party Report 
are more specific to the measure at issue in these proceedings for two reasons. First, the obligations 
in Paragraph 116 are specific to China's adm inistration of its TRQs, compared to the obligation set 
forth in Article X:3(a) requiring reasonable administration of all trade laws, regulations, judicial 
decisions and administrative rulings of general application. Second, the obligations in Paragraph 1 16 
are part of China's Working Party Report and apply exclusively to China. The obligation in 
Article  X:3(a) is of a more general nature that covers administration of a much broader range of 
measures, and applies to all WTO Members.  
7.210.   While Paragraph 116, u nlike Article X:3(a), does not directly refer to "reasonable" 
administration, we recall that "the fact that two provisions have a different 'scope and content' does 
not, in and of itself, imply that a panel must address each and every claim under those pro visions".401 
We also recall that, in support of its claim under Article X:3(a), the United States largely repeats the 
arguments presented in connection with the relevant parts  of its claims under Paragraph 116. As 
already mentioned, we have addressed these a rguments in the context of the United States' claims 
under Paragraph 116 and have found violations of China's obligations to administer its TRQs on a 
transparent, predictable, and fair basis. More particularly, we have found that China does not 
administer its wheat, rice, and corn TRQs on a transparent, predictable, and fair basis , nor use 
                                                
394 China's first written submission, paras. 57 -59. 
395 China's first written submission, paras. 39 -40. 
396 China's fi rst written submission, paras. 113 -114 and 117.  
397 China's first written submission, paras. 94 and 101 -102. 
398 China's first written submission, paras. 80 -82. 
399 China's first written submission, para. 79.   
400 United States' second written submission, paras. 138-141. 
401 Appellate Body Reports, Argentina – Import Measures , para. 5.194.  WT/DS517/R  
 
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  clearly specified requirements, in respect of the basic eligibility criteria, the allocation principles, the 
use of a public comment process, and the administration of ST E and non -STE portions of TRQs.402 
7.211.   The United States formulates an additional argument in support of its claim under 
Article  X:3(a), namely that the alleged interpretation and application of the "vague and undefined" 
eligibility criteria by 37 local agencies  renders the manner in which China administers its TRQs 
unreasonable.403 Given that we have already found that the basic eligibility criteria used in China's 
TRQ administration  violate  its obligation s to administer TRQs on a transparent, predictable , and fair 
basis and to use clearly specified requiremen ts, we do not believe that it is necessary or useful for 
us to also consider whether the alleged interpretation and application of these inconsistent basic 
eligibility criteria by 37 local agen cies is WTO-inconsistent.   
7.212.   Finally, we  recall that panels are not required to examine all legal claims made by the 
complaining party, and need only examine those claims that must be addressed to resolve the matter 
at issue in the dispute.404 
7.213.   In light of the foregoing, we consider that it is not necessar y for us to make a finding under 
Article  X:3(a) of the GATT 1994 to secure a positive solution to this dispute.  
7.214.   At the same time, we note that panels have discretion to make additional findings beyond 
those strictly necessary to resolve a dispute.405 Such ad ditional findings could include, for example, 
alternative factual findings that could serve to assist the Appellate Body in completing the analysis, 
should it disagree with the panel's findings.406 In this regard, we are of the view that, should our 
report b e appealed and the Appellate  Body need to complete the analysis with regard to 
the United  States' claim under Article X:3(a), the factual findings that we have made under 
Paragraph  116 in relation to four of the United States ' arguments presented under Art icle X:3(a) 
would assist the Appellate Body. With regard to the United States' remaining argument concerning 
the alleged involvement of the local agencies in the substantive assessment of TRQ applications, we 
make the following factual findings that would assist the Appellate Body in completing the analysis.  
7.215.   The United States' argument is premised on the factual contention that the local agencies of 
the NDRC participate in the substantive review of TRQ applica tions.407 China denies that the NDRC's 
local agenc ies are involved in the substantive review of TRQ applications. According to  China, these 
agencies are simply in charge of receiving applications, making sure that the applicants submitted 
all the required information, and sending the applications to the N DRC for a substantive review. It 
follows that the local agencies do not independently interpret the basic eligibility criteria.408 
7.216.   The United States' view is based on its reading of certain provisions in China's legal 
instruments on TRQ administration. Speci fically, the United States refers to Articles 8 and 12 of 
the 2003 Provisional Measures, and contends that, together, these provisions indicate that the local 
agencies are involved in the substantive review of applications.409 
7.217.   Article 8 of the 2003 Provision al Measures read s: 
                                                
402 We note that , in addressing the claim s under Paragraph  116 regarding the obligations to administer 
TRQs on a transparent, predictable, and fair basis, we have rejected some of the United States' arguments, for 
instance those pertaining to China's lack of public notice. See paras. 7.125 -7.134  above. We do not consider 
that addressing these argum ents again under Article X:3(a) would have led to a different  outcome and 
contributed to the resolution of this dispute.  
403 United States' first written submission, para. 249.  
404 Appellate Body Report, US – Wool Shirts and Blouses , pp. 18 -20, DSR 1997:I, p. 323, at p p. 339-
341 (referring to Articles 3.2, 3.4, 3.7, 3.9, and 11 of the DSU) . 
405 Appellate Body Reports, US – Softwood Lumber IV , para. 118; US – Gambling , para. 344; US – 
Carbon Steel (India) , para. 4.274; and EC – Poultry , para. 135.  
406 See, e.g. Appe llate Body Reports, US – Softwood Lumber IV , para. 118; Canada – Wheat Exports 
and Grain Imports , para. 126; China – Auto Parts , para. 208; US – Tuna II ( Mexico) , para. 405; and US – 
Carbon  Steel (India) , para. 4.274.  See also Panel Reports, US – COOL (Article 21.5 – Canada and Mexico) , 
para. 7.672;  India – Solar Cells , para. 7.76; and US – Anti-Dumping Methodologies (China) , para. 7.500.  
407 United States' first written submission, para. 247.  
408 China's first written sub mission, para. 40.  
409 United States' response to Panel question No.3(a), para. 19.  WT/DS517/R  
 
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  Article 8. The Ministry of Commerce and NDRC separately entrust their respective  
authorized agencies to be responsible for the items listed below:  
(1) To accept applicants ' applications and forward them to the Ministry of Commerce  or 
NDRC; 
(2) To accept inquiries and convey them to th e Ministry of Commerce or NDRC;  
(3) To inform applicants of any part of their applications that do not meet the  
requirements, and remind them of their revisions;  
(4) To issue an Agricultural Product Import Tariff -Rate Quota Certificate to approved 
Applicants .410 
The tasks described in paragraphs (1), (2) and (4)  are of a logistical nature and thus support China's 
argument that the local agencies  are not involved in the substantive r eview of applications.  
Regarding the nature of the requirement laid down in paragraph (3), China state s, in response to a 
question, that the word "requirements" refers to two formal requirements, namely, to submit a 
complete application form containing all  the necessary information requested by the NDRC and to 
sign the application form.411 Seen in light of the logistical tasks listed in the remaining three 
paragraphs of Article 8, we find convincing China's explanation that paragraph (3) entrusts the local 
agencies with checking the completeness of and signature o n application forms. Therefore, we 
consider that the text of Article 8 does not support the view that the NDRC's local agencies are 
involved in the substantive review of TRQ applications.  
7.218.   Paragraph 2 of Article 12 of the 2003 Provisional Measures reads:  
Agencies authorized by NDRC, in accordance with the criteria announced, accept the 
applications and related materials submitted by the applicants for wheat, corn, white 
rice, and cotton, and transmit th e applications to NDRC for approval prior to 
November  30, concurrently submitting a copy to the Ministry of Commerce.412  
7.219.   The United States maintains that the phrase "in accordance with the criteria announced" 
supports the view that the agencies are involved  in the substantive review of the applications.413 
However, this provision indicates that the main function of the agencies is to "accept" the 
applications, and "transmit" them to the NDRC. We do not read the phrase "in accordance with the 
criteria announced " as describing the kind of review, if any, that such agencies will conduct. 
Therefore, we consider that this provision does not support the  United States' assertion either.  
7.220.   In support of its view , the United States also refers to certain parts of the text s of allocation 
and reallocation notices that read " deliver the enterprise application forms that meet the publicly 
announced criteria " or " carry out reporting of the applications that meet the criteria ".414 However, 
such textual elements, without more, fall  short of proving that the local agencies are involved in the 
substantive review of TRQ applications.  
7.221.   Finally, we note that the "Guideline of the Examination and Approval of Grain Import TRQs" 
also seems to support China's position. The Guideline reads, in  relevant part:  
XIII. General Procedures  
1. The applicant prepares all the application materials and submit  [sic] them to the  local 
authorized agencies according to the requirements of this Guidance. The local 
authorized agencies  accept and collect the application materials, compile them into 
forward documents  and log into the online NDRC Service Hall to register . 
                                                
410 2003 Provisional Measures, (Exhibit USA -11), Article 8.  
411 China's response to Panel question No. 3(b), para. 8.  
412 2003 Provisional Measures, (Exhibit USA -11), Article 12, p aragraph 2.  
413 United States' second written submission, para. 128.  
414 United States' response to Panel question No. 3(a), para. 20.  WT/DS517/R  
 
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  2. After the online registration , the authorized agencies can choose to mail the  
application materials to the NDRC Ser vice Hall, or go to the Service Hall to  submit the 
materials.  
3. Once received the application  materials, officials in the Service Hall will examine the form 
of the materials, and will accept those that meet the formal requirements .415  
7.222.   In our view, this pas sage from the Guideline supports China's position  that the NDRC's 
agencies are not involved in the substantive review of TRQ applications. For instance, the Guideline 
clarifies that the agency will "accept and collect the application materials". The Guidel ine also 
suggests that after the agency receives and compiles the application materials, it will forward them 
to the NDRC and that the officials of the NDRC will examine the materials and accept those that 
meet the relevant requirements.  
7.223.   Based on the foreg oing, we conclude that the United States has not proven its assertion that 
the NDRC's local agencies are involved in the substantive review of TRQ applications.  
7.4  Claim under Article  XI:1 of the GATT  1994  
7.4.1   Introduction  
7.224.   The United States claims  that China's administration of its wheat, rice , and corn TRQs is 
inconsistent with Article XI:1 of the GATT 1994 because it imposes impermissible restrictions on the 
importation of these goods.  Specifically, the United States contends that two aspects of China's 
administration of its TRQs violate Article XI:1, namely (a) the administration of STE and non -STE 
portions of TRQs;  and (b) the usage requirements for wheat, rice, and corn imported under TRQ 
allocations .416 China rejects the entirety of the United States' claim.  
7.4.2   Legal provision  
7.225.   Article XI:1 of the GATT 1994 reads as follows:  
No prohibitions or restrictions other than duties, taxes or other charges, whether made 
effective through quotas, import or export licences or other measu res, shall be instituted 
or maintained by any contracting party on the importation of any product of the territory 
of any other contracting party or on the exportation or sale for export of any product 
destined for the territory of any other contracting pa rty. 
7.226.   Article XI:1 generally proscribes prohibitions or restrictions other than duties or other 
charges on the importation or exportation of goods. The prohibition against quantitative restrictions 
envisaged by Article XI:1 has been interpreted to reflect t hat "tariffs are GATT's border protection 
'of choice'".417 
7.227.   In terms of its scope , Article XI:1  proscribes restrictions on importation "other than duties, 
taxes and other charges". Thus, restrictions that take the form of duties, taxes or other charges fall 
outside the scope of Article XI:1.418 Article XI:1 is comprehensive in terms of the form that measures  
that are proscribed therein  can take, as evidenced by the phrase "whether made effective through 
quotas, import or export licences or other measures".419 
7.4.3   Main  arguments of the parties  
7.228.   With regard to the administration of STE and non -STE portions of TRQs, the  United States 
notes that different requirements and commercial considerations apply to these portions.420 China's 
                                                
415 TRQ FAQs, (Exhibit CHN -15), section XIII. (emphasis added)  
416 United States' first written submission, paras. 284 and 291. 
417 Panel Report, Turkey – Textiles , para. 9.63.  
418 Appellate Body Reports, Argentina – Import Measures , para. 5.219.   
419 Panel Reports, India – Autos, paras. 7.246 -7.247 (referring to GATT Panel Report, Japan - Semi-
Conductors , para. 106); India – Quantitative Restrictions , para. 5.128;  Indonesia – Import Licensing Regimes , 
para. 7.41 ; and Argentina – Hides and Leather , para. 11.17.  
420 United States' first written submission, para. 297.  WT/DS517/R  
 
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  use of a single application process, in the  United States' view, increases uncertainty as applicants 
cannot choose which type of TRQ to apply for or predict which type they may receive.421 This 
"discourage[s] applicants from applying for allocations of wheat, rice or corn TRQ at all, or may lead 
them to apply for a smaller allocation", in violation of Article XI:1 of the GATT 1994.422 
The United  States further points out that non-STE recipients of STE portions of TRQs must contract  
with COFCO for import ation and  that COFCO is not obliged to enter into such contracts . Recipients 
of STE portions of TRQs cannot seek approval from the NDRC to import themselves or through 
another enterprise until 15 August, and approval is not automatic. Therefore, the United States 
argues, recipients of STE portions may not be able , or have sufficient time , to import under some or 
all of their TRQ allocations.423 This would prevent such recipients from applying for additional TRQ 
amounts during the reallocation process and may lead to penalties for non -use of TRQ allocations  in 
the form of deductions to their TRQ allocations in the following year. In the United States' view, this 
constitutes a "substantial limitation on [ a recipient's] ability to successfully import ed [sic] grains 
according to their commercial interests ".424 
7.229.   At th e outset, China refers to the Appellate Body's finding that a TRQ is a tariff -based 
measure  that falls outside the scope of Article XI:1, and argues that measures necessary for the 
administration of TRQs similarly cannot be subject to a challenge under this provision.425 Assuming 
for the sake of argument  that Article XI:1 is applicable, China contends that no uncertainty is 
introduced in its administration of STE and non -STE portions of TRQs because the NDRC, in practice, 
allocates the entire STE por tions of TRQs to COFCO, which is not required to return any unused 
portions thereof. Since non -STE applicants receive non -STE portions of TRQs only426, there is, in 
China's view, no limiting effect on imports of wheat, rice, and corn under the TRQs.  
7.230.   In respo nse, the United States points out that it is not challenging China's use of TRQs but 
rather its administration of these  TRQs. In the United States' view , such administration falls within 
the scope of Article XI:1 and its "association with, connection to, o r proximity to 'duties, taxes or 
other charges'" does not "shield" it from scrutiny under this provision.427 With respect to the NDRC's 
stated  practice, the United States submits that China has not substantiated its assertions and that 
this, in any event, fu rther demonstrate s China's violation of  Article XI:1.428 More particularly, if the 
entire STE portions of TRQs are allocated to COFCO  and the latter is not re quired to return unused 
amounts  for reallocation, "this volume is unavailable to non -STE users, who would likely be willing 
and able to im port some or all of this amount ", resulting in " a significant limitation on import s".429 
7.231.   With regard to the usage requirements , the United States notes that  wheat and corn 
imported under TRQ  allocations  have to be proce ssed and used in the recipient's  own plant while 
imported rice has to be organized for sale in the name of the recipient  itself.430 According to the 
United States, these requirements restrict TRQ recipients from selling or transferring imported 
wheat, rice, and corn and thereby  "create s waste and increase s unnecessarily the cost of using 
imported products in their production process es".431 The United States further asserts  that "failure 
to utilize all imported grain covered by a TRQ Certificate may lead t o reduction in the next year's 
allocation ", referring to the penalties for non -use of TRQ allocations .432 In the United States' view, 
the usage requirements and penalties for non -use therefore discourage importers from applying for 
allocations or from reques ting TRQ allocations in the amounts they would otherwise have requested, 
in violation of Article XI:1.433 
7.232.   At the outset, China argues that the usage requirements constitute " substantive conditions " 
for access to its wheat, rice, and corn TRQs and thus form p art of these TRQs. In China's view, these 
                                                
421 United States' first written submission,  paras. 294 -296. 
422 United States' first written submission, para. 301.  
423 United States' first written submission, paras. 297 -299. 
424 United States' first written submission, para. 301.  
425 China's first written submission, paras. 106 and 135 -136 (quoting Appe llate Body Report, EC – 
Bananas (Article 21.5 – Ecuador) , para. 335).  
426 China's first written submission, para. 107.  
427 United States' second written submission, para. 150.  
428 United States' second written submission, para. 158.  
429 United States' second writt en submission, paras. 158 and 160.  
430 United States' first written submission, para. 303.  
431 United States' first written submission, para. 306.  
432 United States' first written submission, para. 306.  
433 United States' first written submission, para. 308.  WT/DS517/R  
 
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  usage requirements, like the TRQs themselves, fall outside the scope of Article XI:1.434 Again, 
assuming that Article XI:1 is applicable, China argues that there is no processing requirement for 
rice435 and that the ND RC, in practice, does not monitor the processing requirements for wheat and 
corn on a daily basis and does not impose penalties if a recipient is found to have been "unable to 
process its full allocation for unexpected reasons".436 In China's view, there is thus no limiting effect 
on imports of wheat, rice, and corn.437 On the contrary, China argues that the imposition of usage 
requirements and penalties for non -use of TRQ allocations is necessary to prevent TRQ licences from 
being "misused" and to ensure effic ient allocation and use of imported grains.438 
7.233.   In response, the United States argues that the usage requirements do not serve to define 
the scope of the TRQs or the goods that may be imported under them, and thus do not form part of 
the TRQs.439 Along with the  other aspects the United States challenge s in this dispute, they constitute 
a "series of steps, or events, that are taken or occur in t he carrying out of China's TRQ[s]"440 which, 
according to the United States, fall within the scope of Article XI:1. With r espect to the NDRC's 
stated practice, the United States submits that China has not substantiated its assertio ns, nor 
provided any evidence that WTO Members, applicants, or other interested entities are aware of this 
alleged practice.441 
7.4.4   Analysis by the Panel  
7.234.   In examining the United States' claim under Article XI:1 of the GATT 1994, we make the 
following observations.  
7.235.   The same  aspects of China's TRQ administration challenged under Article  XI:1 are also 
challenged under Paragraph 116 of China's Working Par ty Report, including under China's obligation 
to administer TRQs in a manner that would not inhibit the filling of each TRQ. In section s 7.1.4.4  
and 7.1.4.6 above , we have found a violation of this specific obligation under Paragraph  116 in 
respect of the aspects of China's TRQ administratio n that are also challenged under Article XI:1.  
7.236.   While they are not identical,  the legal obligations laid down  in Article  XI:1 and the relevant 
part of Paragraph 116 both address situations where a measure has a limiting effect on  imports. 
However, we consid er that, compared to Article XI:1,  the way Paragraph 116 addresses this 
obligation is much more specific to the measure at iss ue in these proceedings , for two reasons. First, 
the obligation in Paragraph 116 is specific to the administration of TRQs, as opposed to other 
measures. It specifically addresses situations where the administration of TRQs has a limiting effect 
on imports, such that it would inhibit the filling of those TRQs. Second, the obligation in 
Paragraph  116 is part of China's Working Part y Report, and therefore applies exclusively to China, 
as opposed to other WTO Members. The obligation in Article XI:1, on the other hand, is of a more 
general nature, in that it covers a  much broader range of measures  and applies to all WTO Members.  
7.237.   We als o note that, in support of its claim under Article  XI:1, t he United  States essentially  
repeats the arguments  presented in support of its claim regarding the obligation to administer TRQs 
in a manner that would not inhibit the filling of each TRQ, under Paragraph  116. Notably, under 
Article XI:1, the United States argues that China's TRQ administration restricts imports of wheat, 
rice, and corn solely at the in -quota rates under the TRQs.442 Thus, both claims take issue with the 
alleged restricting or inhibiti ng effect China's TRQ administration has on the quantity of imports 
made under the TRQs. The United States does not suggest that China's TRQ administration restricts 
imports of wheat, rice, and corn outside the TRQs.443 As already mentioned, we have found a 
violation of the specific obligation under Paragraph  116, addressing the same concern as 
                                                
434 China's first written submission,  paras. 135 -138; and response to Panel question No. 38(a), paras. 
93 and 95.  
435 China's first written submission, para. 148.  
436 China's response to Panel question No. 57, para. 29.  
437 China's first written submission, paras. 139 and 143.  
438 China's first written submission, para. 154.  
439 United States' second written submission, para. 153; and opening statement at the second meeting 
of the Panel, para. 46.  
440 United States' response to Panel question No. 38(a), para. 131; and second written submission, 
para. 150. 
441 United States' second written submission, para. 157.  
442 United States' response to Panel question No. 38(c), para. 144.  
443 United States' response to Panel question No. 38(c), paras. 142 -144. WT/DS517/R  
 
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  Article  XI:1. More particularly, we have found that China's administration of its wheat, rice, and corn 
TRQs inhibits the filling of these TRQs.444 We have therefore resolved the issue of whether China's 
TRQ administration restricts import s at the in -quota rate s under the TRQs.445 
7.238.   Finally, we  recall that panels are not required to examine all legal claims made by the 
complaining party, and need only examine those claims that must be addressed to resolve the matter 
at issue in the dispute.446 
7.239.   In the light of the foregoing, we consider that it is not necessary for us to make a finding 
under Article XI:1 of the GATT 1994 to secure a positive solution to this dispute. We are also of the 
view that, should our Report be appealed and the Appellate Body consider it necessary to complete 
the analysis with regard to the United States' claim under Article XI:1, the factual findings we made 
in section s  7.1.4.4  and 7.1.4.6 above , would assist  the Appellate Body.  
7.240.   We therefore do  not make a finding on the United States' claim under Article XI:1 of the 
GATT  1994.  
8  CONCLUSIONS AND RECOMMENDATIONS  
8.1.  For the reasons set forth in this Report, we conclude as follows:  
a. With respect to the United States'  claim s under Paragraph 116 of China's Working Party 
Report , as incorporated into the WTO Agreement pursuant to Paragraph 1.2 of China's 
Accession Protocol : 
i. The basic eligibility criteria used in China's administration of its TRQs for wheat, rice, 
and corn are inconsistent with the obligation s to administer TRQs on a transparent , 
predictable , and fair basis, and to administer TRQs  using clearly specified 
requirements;  
ii. The allocation principles used in China's administration of its wheat, rice, and corn 
TRQs are inconsistent with the obligation s to administer TRQs on a transparent , 
predictable , and fair basis, and to administer TRQs using clearly specified 
administrative procedures;  
iii. The reallocation procedures used in China's administration of its wheat, rice, and corn 
TRQs are inconsistent with the obligation  to administer TRQs using clearly sp ecified 
administrative procedures;  
iv. The public comment process used in China's administration of its wheat, rice, and corn 
TRQs is inconsistent with the obligation s to administer TRQs on a transparent , 
predictable , and fair basis, and to administer TRQs usi ng clearly specified 
administrative procedures;  
v. The administration of STE and non -STE portions of China's wheat, rice, and corn TRQs 
is inconsistent with the obligations to administer TRQs on a transparent, predictable , 
and fair basis, to administer TRQs u sing clearly specified administrative procedures, 
and to administer TRQs in a manner that would not inhibit the filling of each TRQ;  
vi. The United States has not demonstrated that the extent of the public notice provided 
in connection with the allocation, ret urn, and reallocation of China's wheat, rice, and 
corn TRQs is inconsistent with the obligations to administer TRQs on a transparent and 
                                                
444 See section 7.1.5 above . 
445 We note that , in addressing the claim under Paragraph  116 regarding the obligation not to inhibit the 
filling of each TRQ , we rejected some of the United States' arguments, for insta nce the one concerning the 
usage requirement for rice . We do not consider that addressing these arguments again under Article XI:1 
would have led to a different outcome and contributed to the resolution of this dispute.  
446 Appellate Body Report, US – Wool S hirts and Blouses , pp. 18 -20, DSR 1997:I, p. 323, at p p. 339-
341 (referring to Articles 3.2, 3.4, 3.7, 3.9 and 11 of the DSU).  WT/DS517/R  
 
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  predictable basis, and to administer TRQs in a manner that would not inhibit the filling 
of each TRQ;  
vii. The usage require ments for imported wheat and corn used in China's administration 
of its TRQ  for wheat and corn are inconsistent with the obligations to administer TRQs 
on a predictable basis, to administer TRQs using clearly specified administrative 
procedures, and to adm inister TRQs in a manner that would not inhibit the filling of 
each TRQ;  
viii. The United States has not demonstrated that the usage requirement for imported rice 
used in China's administration of its TRQ  for rice is inconsistent with the obligation to 
administ er TRQs in a manner that would not inhibit the filling of each TRQ;  
And, therefore, China's administration of its wheat, rice, and corn TRQs is, as a whole, 
inconsistent with the obligations to administer TRQs on a transparent, predictable , and fair 
basis,  to administer TRQs using clearly specified requirements and administrative 
procedures, and to administer TRQs in a manner that would not inhibit the filling of each 
TRQ; 
b. With respect to the United States'  claim under Article XIII:3(b) of the GATT 1994, th e 
United States has not demonstrated that China's administration of its wheat, rice, and 
corn TRQs is inconsistent with this provision;  
c. With respect to the United States'  claim under Articles X:3(a) and XI:1 of the 
GATT  1994, we consider that it is not nec essary for us to make finding s under these 
provisions to secure a positive solution to this dispu te. 
8.2.  Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to constitute a case of 
nullification or impairment. We conclude that, to the extent that the m easure at issue is inconsistent 
with China's obligations under Paragraph 116 of its Working Party Report , as incorporated into the 
WTO Agreement pursuant to Paragraph 1.2 of China's Accession Protocol , it has nullified or impaired 
benefits accruing to the United States under that Working Party Report . 
8.3.  Pursuant to Artic le 19.1 of the DSU, we  recommend that that the DSB request China  to bring 
its measure into conformity with its obligations under  Paragraph 116 of China's  Working Party 
Report , as incorporated into the WTO Agreement pursuant to Paragraph 1.2 of China's Accession 
Protocol . 
 
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