CHINA – DOMESTIC SUPPORT FOR AGRICULTURAL PRODUCERS REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 28 February 2019
Document codes: WT/DS511/R
Complainant: U.S.
Respondent: China
Third parties: Australia, Brazil, Canada, Colombia, Ecuador, Egypt, El Salvador, EU, Guatemala, India, Indonesia, Israel, Japan, Kazakhstan, South Korea, Norway, Pakistan, Paraguay, Philippines, Russia, Saudi Arabia, Singapore, Taiwan, Thailand, Turkey, Ukraine, Vietnam
Dispute stage: Panel
Agreements cited: Art. 3.2, 6.3, 7.2(b)  Agriculture

CHINA – DOMESTIC SUPPORT FOR AGRICULTURAL PRODUCERS
REPORT OF THE PANEL

LIST OF ANNEXES

ANNEX A
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex A Working Procedures of the Panel 4
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 Integrated executive summary of the arguments of the United States 10
Annex B-2 Integrated executive summary of the arguments of China 35
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of Australia 62
Annex C-2 Integrated executive summary of the arguments of Brazil 65
Annex C-3 Integrated executive summary of the arguments of Canada 67
Annex C-4 Integrated executive summary of the arguments of Colombia 71
Annex C-5 Integrated executive summary of the arguments of Ecuador 72
Annex C-6 Integrated executive summary of the arguments of the European Union 74
Annex C-7 Integrated executive summary of the arguments of India 76
Annex C-8 Integrated executive summary of the arguments of Indonesia 78
Annex C-9 Integrated executive summary of the arguments of Japan 80
Annex C-10 Integrated executive summary of the arguments of Kazakhstan 83
Annex C-11 Integrated executive summary of the arguments of the Russian Federation 86

ANNEX D
RAW DATA
Contents Page
Annex D Raw data as presented by the parties 90

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
AAP Applied Administered Price
ADBC Agricultural Development Bank of China
AMS Aggregate Measurement(s) of Support
CDM Constituent Data and Methodology
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
FERP Fixed External Reference Price
GATT 1994 General Agreement on Tariffs and Trade 1994
MPS Market Price Support
QEP Quantity of Eligible Production
Sinograin China Grain Reserve Corporation
TPRP Temporary Purchase and Reserve Policy for corn
USDA United States Department of Agriculture
Vienna Convention (VCLT) 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
WTO Agreement Marrakesh Agreement Establishing the World Trade Organization

CASES CITED IN THIS REPORT
Short title Full case title and citation
Argentina – Textiles and
Apparel
Panel Report, Argentina – Measures Affecting Imports of Footwear, Textiles,
Apparel and Other Items , WT/DS56/R, adopted 22 April 1998, as modified by
Appellate Body Report WT/DS56/AB/R, DSR 1998:III, p. 1033
Canada – Continued
Suspension
Appellate Body Report, Canada – Continued Suspension of Obligations in the EC
– Hormones Dispute , WT/DS321/AB/R, adopted 14 November 2008, DSR
2008:XIV, p. 5373
Canada – Continued
Suspension
Panel Report, Canada – Continued Suspension of Obligations in the EC –
Hormones Dispute , WT/DS321/R and Add.1 to Add.7, adopted 14 November
2008, as modified by Appellate Body Report WT/DS321/AB/R, DSR 2008:XV, p.
5757
Canada – Wheat Exports
and Grain Imports
Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment of
Imported Grain, WT/DS276/R, adopted 27 September 2004, upheld by Appellate
Body Report WT/DS276/AB/R, DSR 2004:VI, p. 2817
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating to
Certain Agricultural Products , WT/DS207/R, adopted 23 October 2002, as
modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII, p. 3127
China – Electronic Payment
Services
Panel Report, China – Certain Measures Affecting Electronic Payment Ser vices,
WT/DS413/R and Add.1, adopted 31 August 2012, DSR 2012:X, p. 5305
China – HP-SSST (Japan) /
China – HP-SSST (EU)
Appellate Body Reports, China – Measures Imposing Anti -Dumping Duties on
High-Performance Stainless Steel Seamless Tubes ("HP -SSST") from Japan /
China – Measures Imposing Anti-Dumping Duties on High-Performance Stainless
Steel Seamless Tubes ("HP -SSST") from the European Union , WT/DS454/AB/R
and Add.1 / WT/DS460/AB/R and Add.1, adopted 28 October 2015, DSR 2015:IX,
p. 4573
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
Dominican Republic –
Import and Sale of
Cigarettes
Appellate Body Report, Dominican Republic – Measures Affecting the Importation
and Internal Sale of Cigarettes , WT/DS302/AB/R, adopted 19 May 2005, DSR
2005:XV, p. 7367
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 Communities – 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
EC – Bananas III
(Article 21.5 – US)
Panel Report, European Communities – Regime for the Importation, Sale and
Distribution of Bananas – Recourse to Article 21.5 of the DSU by the United
States, WT/DS27/RW/USA and Corr.1, adopted 22 December 2008, upheld by
Appellate Body Report WT/DS27/AB/RW/USA, DSR 2008:XIX, p. 7761
EC – Approval and
Marketing of Biotech
Products
Panel Reports, European Communities – Measures Affecting the Approval and
Marketing of Biotech Products , WT/DS291/R, Add.1 to Add.9 and Corr.1 /
WT/DS292/R, Add.1 to Add.9 an d Corr.1 / WT/DS293/R, Add.1 to Add.9 and
Corr.1, adopted 21 November 2006, DSR 2006:III, p. 847
EC – Chicken Cuts Appellate Body Report, European Communities – Customs Classification of Frozen
Boneless Chicken Cuts , WT/DS269/AB/R, WT/DS286/AB/R, adopted 27
September 2005, and Corr.1, DSR 2005:XIX, p. 9157
EC – Chicken Cuts Panel Reports, European Communities – Customs Classification of Frozen
Boneless Chicken Cuts, WT/DS269/R (Brazil) / WT/DS286/R (Thailand), adopted
27 September 2005, as modified by Appellate Body Report WT/DS269/AB/R,
WT/DS286/AB/R, DSR 2005:XIX, p. 9295 / DSR 2005:XX, p. 9721
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR
1998:I, p. 135
EC – IT Products Panel Reports, European Communities and its member States – Tariff Treatment
of Certain Information Technology Products , WT/DS375/R / WT/DS376/R /
WT/DS377/R, adopted 21 September 2010, DSR 2010:III, p. 933
EC – Selected Customs
Matters
Appellate Body Report, European Communities – Selected Customs Matters ,
WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, p. 3791

Short title Full case title and citation
EC and certain member
States – Large Civil Aircraft
Appellate Body Report, European Communities and Certain Member States –
Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted 1 June
2011, DSR 2011:I, p. 7
EU – Biodiesel (Argentina) Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel
from A rgentina, WT/DS473/AB/R and Add.1, adopted 26 October 2016, DSR
2016:VI, p. 2871
EU – Fatty Alcohols
(Indonesia)
Appellate Body Report, European Union – Anti-Dumping Measures on Imports of
Certain Fatty Alcohols from Indonesia , WT/DS442/AB/R and Add.1, adopted 29
September 2017
EU – PET (Pakistan) Appellate Body Report, European Union – Countervailing Measures on Certain
Polyethylene Terephthalate from Pakistan, WT/DS486/AB/R and Add.1, adopted
28 May 2018
EU – PET (Pakistan) Panel Report, European Union – Countervailing Measures on Certain Polyethylene
Terephthalate from Pakistan, WT/DS486/R, Add.1 and Corr.1, adopted 28 May
2018, as modified by Appellate Body Report WT/DS486/AB/R
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
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding
Portland Cement from Mexico, WT/DS60/AB/R, adopted 25 November 1998, DSR
1998:IX, p. 3767
India – Additional Import
Duties
Panel Report, India – Additional and Extra-Additional Duties on Imports from the
United States , WT/DS360/R, adopted 17 November 2008, as reversed by
Appellate Body Report WT/DS360/AB/R, DSR 2008:XX, p. 8317
Indonesia – Autos Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry ,
WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R, Corr.1 and Corr.2, adopted
23 July 1998, and Corr.3 and Corr.4, DSR 1998:VI, p. 2201
Korea – Various Measures
on Beef
Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen
Beef, WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as modified by
Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R, DSR 2001:I, p. 59
Korea – Various Measures
on Beef
Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen
Beef, WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as modified by
Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R, DSR 2001:I, p. 59
Turkey – Rice Panel Report, Turkey – Measures Affecting the Importation of Rice, WT/DS334/R,
adopted 22 October 2007, DSR 2007:VI, p. 2151
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R
and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779
US – Continued Suspension Appellate Body Report, United States – Continued Suspension of Obligations in
the EC – Hormones Dispute, WT/DS320/AB/R, adopted 14 November 2008, DSR
2008:X, p. 3507
US – Continued Suspension Panel Report, United States – Continued Suspension of Obligations in the EC –
Hormones Dispute, WT/DS320/R and Add.1 to Add.7, adopted 14 November
2008, as modified by Appellate Body Report WT/DS320/AB/R, DSR 2008:XI, p.
3891
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application of
Zeroing Methodology , WT/DS350/AB/R, adopted 19 February 20 09, DSR
2009:III, p. 1291
US – COOL Panel Reports, United States – Certain Country of Origin Labelling (COOL)
Requirements, WT/DS384/R / WT/DS386/R, adopted 23 July 2012, as modified
by Appellate Body Reports WT/DS384/AB/R / WT/DS386/AB/R, DSR 2012:VI, p.
2745
US – Corrosion-Resistant
Steel Sunset Review
Appellate Body Report, United States – Sunset Review of Anti -Dumping Duties
on Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R,
adopted 9 January 2004, DSR 2004:I, p. 3
US – Countervailing and
Anti-Dumping Measures
(China)
Appellate Body Report, United States – Countervailing and Anti -Dumping
Measures on Certain Products from China, WT/DS449/AB/R and Corr.1, adopted
22 July 2014, DSR 2014:VIII, p. 3027
US – Countervailing
Measures (China)
Appellate Body Report, United States – Countervailing Duty Measures on Certain
Products from China, WT/DS437/AB/R, adopted 16 January 2015, DSR 2015:1,
p. 7
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 – Gambling (Article 22.6
– US)
Decision by the Arbitrator, United States – Measures Affecting the Cross-Border
Supply of Gambling and Betting Services – Recourse to Arbitration by the United
States under Article 22.6 of the DSU, WT/DS285/ARB, 21 December 2007, DSR
2007:X, p. 4163

Short title Full case title and citation
US – Gasoline Panel Re port, United States – Standards for Reformulated and Conventional
Gasoline, WT/DS2/R, adopted 20 May 1996, as modified by Appellate Body
Report WT/DS2/AB/R, DSR 1996:I, p. 29
US – Large Civil Aircraft (2nd
complaint)
Appellate Body Report, United States – Measures Affecting Trade in Large Civil
Aircraft (Second Complaint) , WT/DS353/AB/R, adopted 23 March 2012, DSR
2012:I, p. 7
US – Large Civil Aircraft (2nd
complaint) (Article 21.5 –
EU)
Panel Report, United States – Measures Affecting Trade in Large Civil Aircraft
(Second Complaint) – Recourse to Article 21.5 of the DSU by the European Union,
WT/DS353/RW and Add.1, circulated to WTO Members 9 June 2017
US – OCTG (Korea) Panel Report, United States – Anti-Dumping Measures on Certain Oil Country
Tubular Goods from Korea, WT/DS488/R and Add.1, adopted 12 January 2018
US – Oil Country Tubular
Goods Sunset Reviews
Appellate Body Report, United States – Sunset Reviews of Anti -Dumping
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R,
adopted 17 December 2004, DSR 2004:VII, p. 3257
US – Section 301 Trade Act Panel Report, United States – Sections 301 -310 of the Trade Act of 1974 ,
WT/DS152/R, adopted 27 January 2000, DSR 2000:II, p. 815
US – Tuna II (Mexico)
(Article 22.6 – US)
Decision by the Arbitrator, United States – Measures Concerning the Importation,
Marketing and Sale of Tuna and Tuna Products – Recourse to Article 22.6 of the
DSU by the United States, WT/DS381/ARB, 25 April 2017
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton ,
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, p. 3
US – Upland Cotton Panel Report, United States – Subsidies on Upland Cotton, WT/DS267/R, Add.1
to Add.3 and Corr.1, adopted 21 March 2005, as modified by Appellate Body
Report WT/DS267/AB/R, DSR 2005:II, p. 299
US – Upland Cotton (Article
21.5 – Brazil)
Panel Report, United States – Subsidies on Upland Cotton – Recourse to Article
21.5 of the DSU by Brazil, WT/DS267/RW and Corr.1, adopted 20 June 2008, as
modified by Appellate Body Report WT/DS267/AB/RW, DSR 2008:III, p. 997
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, adopted 23 May 1997, and
Corr.1, DSR 1997:I, p. 323
US – Wool Shirts and
Blouses
Panel Report, United States – Measure Affecting Imports of Woven Wool Shirts
and Blouses from India, WT/DS33/R, adopted 23 May 1997, upheld by Appellate
Body Report WT/DS33/AB/R, DSR 1997:I, p. 343
US – Zeroing (Japan)
(Article 21.5 – Japan)
Appellate Body Report, United States – Measures Relating to Zeroing and Sunset
Reviews – Recourse to Article 21.5 of the DSU by Japan , WT/DS322/AB/RW,
adopted 31 August 2009, DSR 2009:VIII, p. 3441

LIST OF EXHIBITS FREQUENTLY REFERRED TO IN THIS REPORT
Exhibit No. Short Title Title
USA-7 China's Working Party
Report
Report on the Working Party on the Accession of China
WT/ACC/CHN/49 (October 1, 2001).
USA-10/CHN-10B 2004 Grain Opinion State Council Opinion on the Further Deepening the Reform
of Grain Circulation, (State Council Guo Fa [2004] No. 17,
issued May 23, 2004). (English Translation)
USA-12/CHN-9B 2004 Grain Distribution
Regulation
Regulation on the Administration of Grain Distribution (Order
of the State Council No. 407, adopted at the 50th executive
meeting of the State Council on May 19, 2004, issued May
26, 2004, first amended July 18, 2013, by Order of the State
Council No. 638, further amended on February 6, 2016, by
Order of the State Council No. 666). (English Translation)
USA-18 China's Statistical
Yearbook, Table 12-10,
(2016)
National Bureau of Statistics of China, China 's Statistical
Yearbook (2016), Table 12-10:Output of Major Farm Products
(publishing 2015 data), available:
http://www.stats.gov.cn/tjsj/ndsj/2016/indexeh.htm.
USA-20/CHN-18B 2012 Wheat Annual
Notice
Notice on Raising the Wheat Minimum Procurement Price for
2012 (Fa Gai Dian [2011] No. 250), 28 September 2011 .
(English translation)
USA-21/CHN-93B 2013 Wheat Annual Notice Notice on Raising the Wheat Minimum Purchase Price for 2013
(National Development and Reform Commission, Ministry of
Finance, Ministry of Agriculture, State Administration of
Grain, Agricultural Development Bank of China, Fa Gai Jia Ge
[2012] No. 3171, issued October 16, 2012). (English
Translation)
USA-22/CHN-20B 2014 Wheat Annual Notice Notice on Raising the Wheat Minimum Procurement Price for
2014 (Fa Gai Dian [2013] No. 205), 12 October 2013 .
(English translation)
USA-23/CHN-21B 2015 Wheat Annual Notice Notice on Announcing the Minimum Procurement Price for
Wheat for 2015 (Fa Gai Jia Ge [2014] No. 2302), 16 October
2014 (English translation) (hereinafter "2015 Wheat MPP
Announcement").
USA-24/CHN-29B
Revised
2012 Wheat
Implementation Plan
Notice on Issuing the Wheat Minimum Procurement Price
Implementation Plan for 2012 (Fa Gai Jing Mao [2012] No.
1494), 21 May 2012. (English translation)
USA-25/CHN-19B
Revised
2013 Wheat
Implementation Plan
Notice on Issuing the Wheat Minimum Procure ment Price
Implementation Plan for 2013 (Fa Gai Jing Mao [2013] No.
947), 20 May 2013. (English translation)
USA-26/CHN-30B
Revised
2014 Wheat and Early -
Season Indica Rice
Implementation Plan
Notice on Issuing the Wheat and Early -season Indica Rice
Minimum Procurement Price Implementation Plan for 2014
(Fa Gai Jing Mao [2014] No. 1026), 20 May 2014 (English
translation) (hereinafter "2014 Wheat & Early -season Indica
Rice Implementation Plan").
USA-27/CHN-28B
Revised
2015 Wheat and Rice
Implementation Plan
Notice on Issuing the Wheat and Rice Minimum Procurement
Price Implementation Plan for 2015 (Guo Liang Tiao [2015]
No. 80), 18 May 2015. (English translation)
USA-35 Funing, et al., Alternative
Approach to Measure
Comparative Advantage
in China's Grain Sector
(2001)
Zhong Funing, Xu Zhigang, Fu Longbo, An Alternative
Approach to Measure Regional Comparative Advantage in
China's Grain Sector , Conference of Australian Agricultural
and Resource Economics Society (January 22-25, 2001).
USA-36 Chen, Current Situation
and Trends in Production
of Japonica Rice in China
(2006)
Chen Wen-fu, Pan Wen-bo, Xu Zheng -jin, Current Situation
and Trends in Production of Japonica Rice in China, Journal of
Shenyang Agricultural University, 2006-12, 37(6): 801-805.

USA-39/CHN-23B 2012 Rice Annual Notice Notice on Raising the Rice Minimum Procurement Price for
2012 (Fa Gai Dian [2012] No. 17), 2 February 2012. (English
translation)

Exhibit No. Short Title Title
USA-40/CHN-24B 2013 Rice Annual Notice Notice on Raising the Rice Minimum Procurement Price f or
2013 (Fa Gai Jia Ge [2013] No. 193), 30 January 2013 .
(English translation)
USA-41/CHN-25B 2014 Rice Annual Notice Notice on Raising the Rice Minimum Procurement Price for
2014 (Fa Gai Dian [2014] No. 34), 11 February 2014. (English
translation)
USA-42/CHN-26B 2015 Rice Annual Notice Notice on Announcing the Rice Minimum Procurement Price
for 2015 (Fa Gai Jia Ge [2015] No. 225), 3 February 2015 .
(English translation)
USA-43 WT/ACC/CHN/38/Rev.3 Communication from China, WT/ACC/CHN/38/Rev.3 (July 19,
2001).
USA-44/CHN-34B
Revised
2012 Early-Season Indica
Rice Implementation Plan
Notice on Issuing the Early -Season Indica Rice Minimum
Procurement Price Implementation Plan for 2012 (Fa Gai Jing
Mao [2012] No. 1943, Article 2), 2 July 2012 . (English
translation)
USA-45/CHN-36B
Revised
2012 Mid- to Late-Season
Rice Implementation Plan
Notice on Issuing the Mid - to Late -Season Rice Minimum
Procurement Price Implementation Plan for 2012 (Fa Gai Jing
Mao [2012] No. 2726), 28 August 2012 (English translation)
(hereinafter "2012 Mid -to Late-season Rice Implementation
Plan").
USA-46/CHN-35B
Revised
2013 Early-Season Indica
Rice Implementation Plan
Notice on Issuing the Early -Season Indica Rice Minimum
Procurement Price Implementation Plan for 2013 (Fa Gai Jing
Mao [2013] No. 1281), 2 July 2013 (English translation)
(hereinafter "2013 Early-season Indica Rice Implementation
Plan").
USA-47/CHN-37B
Revised
2013 Mid- to Late-Season
Rice Implementation Plan
Notice on Issuing the Mid - to Late -Season Rice Minimum
Procurement Price Implementation Plan for 2013 (Fa Gai Jing
Mao [2013] No. 1836), 18 September 2013 . (English
translation)
USA-48/CHN-31B
Revised
2014 Mid- to Late-Season
Rice Implementation Plan
Notice on Issuing the Mid - to Late -Season Rice Minimum
Procurement Price Implementation Plan for 2014 (Fa Gai Jing
Mao [2014] No. 2104, Article 2, 15 September 2014. (English
translation)
USA-52/CHN-69B 2012 TPRP Notice Notice on Issues Relating to National Temporary Reserve
Purchases of Corn for 2012 (State Administration of Grain and
Other Departments, Guo Liang Tiao [2012] No. 212, issued
November 15, 2012). (English Translation)
USA-53/CHN-70B 2013 TPRP Notice Notice on Issues Relating to National Temporary Reserve
Purchases of Corn and Soybeans in the Northeast Region for
2013 (National Development and Reform Commission, State
Administration of Grain, Ministry of Finance, Agricultural
Development Bank of China, Guo Liang Tiao [2013] No. 265,
issued November 22, 2013). (English Translation)
USA-54/CHN-71B 2014 TPRP Notice Notice on Issues Relating to National Temporary Reserve
Purchases of Corn in the Northeast Region for 2014 (National
Development and Reform Commission, State Administration
of Grain, Ministry of Finance, Agricultural Development Bank
of China, Guo Liang Tiao [2014] No. 254, issued November
25, 2014). (English Translation)
USA-55/CHN-72B 2015 TPRP Notice Notice on Issues Relating to National Temporary Reserve
Purchases of Corn in the Northeast Region for 2015 (National
Development and Reform Commission, State Administration
of Grain, Ministry of Finance, Agricultural Development Bank
of China, Guo Liang Tiao. (English Translation)
USA-72 2014 China Yearbook of
Agricultural Price Survey
China National Bureau of Statistics, China Yearboo k of
Agricultural Price Survey (2015).
USA-73 China's Statistical
Yearbook, Table 12-10
(2015)
National Bureau of Statistics of China, China's Statistical
Yearbook (2015), Table 12 -10: Output of Major Farm
Products (publishing 2014 data), available:
http://www.stats.gov.cn/tjsj/ndsj/2015/indexeh.htm.

Exhibit No. Short Title Title
USA-74 China's Statistical
Yearbook, Table 12-10
(2014)
National Bureau of Statistics of China, China's Statistical
Yearbook (2014), Table 12 -10: Output of Major Farm
Products (publishing 2013 data), available:
http://www.stats.gov.cn/tjsj/ndsj/2014/indexeh.htm.
USA-75 China's Statistical
Yearbook, Table 13-15
(2013)
National Bureau of Statistics of China, China's Statistical
Yearbook (2013), Table 13 -15: Output of Major Farm
Products (publishing 2012 data), available:
http://www.stats.gov.cn/tjsj/ndsj/2013/indexeh.htm.
USA-76/CHN-33 China's Rural Statistical
Yearbook (2016)
National Bureau of Statistics of China, China's Rural
Statistical Yearbook (2016).
USA-77 China Agricultural
Statistical Reports (2011-
2014)
Ministry of Agriculture, PRC, China Agricultural Statistical
Reports (2011-2014).
USA-78 Yuzhu, Basic Knowledge
about Japonica Rice
(2011)
Pan Yuzhu and Li Jia, Basic Knowledge about Japonica Rice ,
Research and Consulting Department, C hangjiang Futures
(2011).
USA-79 China's Farm Gate Prices
1995 to 2015
Compilation of China's Farm Gate Prices 1995 to 2015.
USA-80 2014 Compilation of
Materials on Agricultural
Product Cost and Returns
China National Development and Reform Commission,
Compilation of Materials on Agricultural Product Cost and
Returns (2014).
USA-81/CHN-67 2016 Compilation of
Materials on Agricultural
Product Cost and Returns
China National Development and Reform Commission,
Compilation of Materials on Agricultural Product Cost and
Returns (2016).
USA-87/CHN-80B 2016 Corn Notice Notice on Proper Handling of Corn Purchase Work in
Northeast China This Year (2016) (Guo Liang Tiao [2016] No.
210), 19 September 2016. (English translation)
USA-94 Corn Prices 2012-2017 Corn Prices 2012-2017.
USA-101/CHN-
107B
2016 Sinograin Corn Price
Announcement
Price Announcement for Corn Purchase (October 16, 2016) .
(English Translation)
USA-102 2017 Jilin Corn Notice Jilin Notice on Further Proper Handling of Corn Purchase and
Sales Work (February 3, 2017).
USA-104 2016 Heilongjiang Corn
Purchase Notice
2016 Heilongjiang Corn Purchase Notice (November 10,
2016).
CHN-43B Revised 2010 National Standards
of Grain Quality Notice
Notice on Issuing the Rules on Matters Related to
Implementing National Standards of Grain and Oil Quality
(Guo Liang Fa [2010] No. 178), 9 November 2010 . (English
Translation)
CHN-49 China's Rural Statistical
Yearbook (2013)
National Bureau of Statistics of China, China's Rural
Statistical Yearbook (2013).
CHN-50 China's Rural Statistical
Yearbook (2015)
National Bureau of Statistics of China, China's Rural
Statistical Yearbook (2015).
CHN-52 China's Total AMS
Commitments
Schedule CLII, People's Republic of China, Part IV Section I:
Domestic Support: Total AMS Commitments.
CHN-65 OECD 2016 Document on
Compositional
Considerations for New
Varieties of Rice
OECD Environment Directorate, Revised Consensus
Document on Compositional Considerations for New Varieties
of Rice (Oryza sativa): Key Food and Feed Nutrients, Anti-
nutrients and Other Constituents, Paris, 2016.
CHN-84 April 2017 USDA GAIN
Report
USDA, Foreign Agricultural Service, "Wheat and Rice
Supplants Corn Area", GAIN Report Number: CH 17017, 4
April 2017.
CHN-86B 2016 Heilongjiang Corn
Purchase and Sale Work
Notice
Notice on Proper Handling of the Corn Purchase and Sale
Work in Heilongjiang Province by the General Office of the
People's Government of Heilongjiang Province (Hei Zheng
Ban Fa [2016] No. 119), 25 October 2016 . (English
translation)

1 INTRODUCTION
1.1 Complaint by the United States
1.1. On 13 September 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), Article 19 of the Agreement on Agriculture , 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 20 October 2016.
1.2 Panel establishment and composition
1.3. On 5 December 2016, 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 25 January 2017, the
Dispute Settlement Body (DSB) established a panel pursuant to the request of the United States in
document WT/DS511/8, 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 mat ter referred to the DSB by the United States in
document WT/DS511/8 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 24 June 2017, the parties agreed that the Panel would be composed as follows:
Chairperson: Mr Gudmundur Helgason

Members: Mr Juan Antonio Dorantes Sánchez
Ms Elaine Feldman

1.6. Australia, Brazil, Canada, Colombia, Ecuador, Egypt, El Salvador, the European Union,
Guatemala, India, Indonesia, Israel, Ja pan, Kazakhstan, the Republic of Korea, Norway, Pakistan,
Paraguay, the Philippines, the Russian Federation, the Kingdom of Saudi Arabia, Singapore, Chinese
Taipei, Thailand, Turkey, Ukraine, and Viet Nam notified their interest in participating in the Pan el
proceedings as third parties.
1.3 Panel proceedings
1.3.1 General
1.7. After consultation with the parties, the Panel adopted its Working Procedures 5 and timetable
on 11 August 2017.
1.8. The Panel held a first substantive meeting with the parties on 22 -24 January 2018. A session
with the third parties was held on 23 January 2018. The Panel held a second substantive meeting
with the parties on 24-25 April 2018. On 21 June 2018, the Panel issued the descriptive part of its
Report to the parties. The Panel issued its Interim Report to the parties on 2 November 2018. The
Panel issued its Final Report to the parties on 12 December 2018.
1.3.2 United States' request for partially open meetings
1.9. At the Panel's organizational meeting held on 25 July 2017, the United States enquired with
China whether it would agree to Panel meetings being open to observation by other WTO Members

1 See WT/DS511/1.
2 WT/DS511/8.
3 See WT/DSB/M/391.
4 WT/DS511/9.
5 See the Panel's Working Procedures in Annex A.

and the public, either in full or in part. China disagreed with this request. The United States submitted
a written request that panel meetings be partially opened to the public.6 On 5 September 2017, the
Panel declined the United States' request.7 In its communication, the Panel informed the parties that
the reasoning supporting the Panel's decision would be communicated to the parties in due course,
and in any case, no later than the issuance of the Interim Report.
1.3.3 Terms of reference
1.10. China asserted in its first written submission that one of the measures which it understood
the United States was challenging, the Temporary Purchase and Reserve Policy for corn, fell outside
the Panel's terms of reference within the meaning of Article 7.1 of the DSU, because it allegedly
expired before the United States requested the establishment of the Panel.8 China did not request a
preliminary ruling to be made on this issue.
1.11. In light of this assertion, on 7 November 2017, the Panel invited the United States to provide
written comments on the issue by 14 November 2017. China was invited to comment on the United
States' comments by 21 November 2017. Additionally, the Panel invited the third parties to present
their views, by 14 November 2017.9
1.12. Following an extension of the deadline, the United States provided its comments on 12
December 2017.10 China provided its own comments on the United States' comments on 12 January
2018.11 The parties continued to address this issue in subsequent communications. No specific action
was taken by the Panel regarding this issue prior to the issuance of the Interim Report.
2 FACTUAL ASPECTS
2.1 Measures at issue
2.1. In its panel request, the United States challenged China's provision of domestic support in
excess of its product -specific de minimis level, provided through market price support (MPS) for
producers of each of wheat, Indica rice, Japonica rice and corn in 2012, 2013, 2014, and 2015, as
reflected in, but not limited to, the legal instruments listed in the panel request.12
2.2. The precise characterization of the measures at issue in this dispute was subject to
disagreement between the parties in the context of a discussion of the Panel's terms of reference.
We will, therefore, address the nature of the measures in more det ail as part of our Findings in
Section 7 of this Report.
3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1. The United States requests that the Panel find th at China has acted inconsistently with its
obligations under Articles 3.2 and 6.3 of the Agreement on Agriculture because the level of domestic
support provided by China exceeds China's commitment level of "nil" specified in Section I of Part
IV of China's Schedule CLII. In particular, the United States asserts that China's domestic support
in favour of agricultural producers, expressed in terms of its Current Total Aggregate Measurement
of Support, exceeds China's final bound commitment level in 2012, 2013 , 2014, and 2015 on the
basis of domestic support provided through market price support programmes to producers of, inter
alia, wheat, Indica rice, Japonica rice, and corn.13 In the alternative, the United States requests that
to the extent China's commitment level of "nil" was understood as not setting out any commitment,
the Panel find that these measures are inconsistent with China's obligation under Article 7.2(b) of

6 United States' comments on the draft timetable and working procedures, para. 5-6.
7 Letter from the Panel to the parties, 5 September 2017.
8 China's first written submission, paras. 278-342.
9 Letter from the Panel to the parties, 7 November 2017.
10 Letter from the United States to the Panel, 12 December 2017.
11 Letter from the China to the Panel, 12 January 2018.
12 United States' request for the establishment of a panel, pp. 1-6. See the United States' request for
the establishment of a panel.
13 United States' first written submission, para. 137. See also United States' request for the
establishment of a panel, p.6.

the Agreement on Agriculture, because, in 2012, 2013, 2014, and 2015, China provided dom estic
support for wheat, Indica rice, Japonica rice, and corn in excess of its product -specific de minimis
level of 8.5% for each product. 14 The United States thus requests, pursuant to Article 19.1 of the
DSU, that the Panel recommend that China bring its measures into conformity with its obligations
under the Agreement on Agriculture.15
3.2. China requests the Panel to find that since the measure relating to corn, as identified by China,
expired prior to the United States' request for the establishment of the Pa nel, it falls outside the
Panel's terms of reference. China also requests that the Panel reject the United States' claims in this
dispute regarding measures concerning wheat, Indica rice and Japonica rice, in their entirety.16
4 ARGUMENTS OF THE PARTIES
4.1. The a rguments of the parties are reflected in their executive summaries, provided to the
Panel in accordance with paragraph 19 of the Working Proce dures adopted by the Panel
(see Annexes B-1 and B-2).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Australia, B razil, Canada, Colombia, Ecuador, the European Union, India,
Indonesia, Japan, Kazakhstan, and the Russian Federation are reflected in their executive
summaries, provided in accordance with paragraph 20 of the Working Procedures adopted by the
Panel (see A nnexes C-1, C-2, C-3, C-4, C-5, C-6, C-7, C-8, C-9, C-10, C-11). Indonesia, Japan,
Kazakhstan, and the Russian Federation did not submit written arguments to the Panel. Colombia
and Ecuador did not submit oral arguments to the Panel. Egypt, El Salvador, Guatemala, Israel, the
Republic of Korea, Norway, Pakistan, Paraguay, the Philippines, the Kingdom of Saudi Arabia,
Singapore, Chinese Taipei, Thailand, Turkey, Ukraine, and Viet Nam submitted neither written nor
oral arguments to the Panel.
6 INTERIM REVIEW
6.1. On 2 November 2018, the Panel issued its Interim Report to the parties. On 16 November
2018, China and the United States each submitted written requests for the Panel to review aspects
of the Interim Report. 17 On 30 November 2018 , each party submitted comments on the other 's
requests for review.18 Neither party requested an interim review meeting.
6.2. In accordance with Article 15.3 of the DSU, this section of the Panel's Report addresses the
parties' requests for review made at the interim review stage. We discuss the parties' requests for
substantive modifications below, in sequence according to the sections and paragraphs to which the
requests pertain. The Panel modified aspects of its Report in the light of the parties' comments where
it considered it appropri ate, as explained below. In addition to the substantive requests discussed
below, various editorial and non-substantive revisions were made to the Report, including those
identified by the parties. This section of the Panel's Report constitutes an integral part of the Panel's
findings.
6.3. In addressing the parties' requests for substantive modifications below, we are mindful of the
specific scope, nature and purpose of interim review. With respect to the scope of our review, we
observe that Article 15.2 of the DSU, and paragraph 21 of the Panel's Working Procedures, provide
parties with an opportunity to request the Panel "to review precise aspects of the interim report". In
light of the considerations stated above, we will review our Interim Report only in light of the parties'
requests that relate to its "precise aspects". We will not accept requests amounting to a party's
attempt to re-argue its case.

14 United States' first written submission, fn 251.
15 United States' first written submission, para. 138.
16 China's first written submission, para. 343.
17 China's comments on the Interim Report of the Panel; United States' comments on the Interim Report
of the Panel.
18 China's comments on the United States' comments on the Interim Report of the Panel; United States'
comments on China's comments on the Interim Report of the Panel.

6.4. As an additional observation of a general nature, we would like to note that, in the "Findings"
section of t he Report, we summarize the parties' arguments in the manner and to the extent
necessary and appropriate to capture our understanding for the purposes of our own assessment
and reasoning. We underline that we have done this on the basis of a comprehensive and holistic
reading of the parties' submissions. The parties' arguments are summarized in their own words in
the executive summaries annexed to the Final Report.
6.5. The numbering of some of the paragraphs and footnotes in the Final Report may have changed
from the numbering in the Interim Report. The discussion below refers to the numbering in the
Interim Report.
6.6. The United States requests that heading 7.2 be changed to reflect that China's Temporary
Purchase and Reserve Policy (TPRP) for corn is "at the heart of the dispute between the parties".
China objects to this request and considers the text in the heading to be accurate. The Panel has
decided to keep the original wording, as the Panel's conclusions on the nature and characterization
of the measures at issue follow later on in the Report.
6.7. The United States requests to amend the wording of para graph 7.32 to describe more
accurately the United States' views on the measures at issue in this dispute. China submits that the
United States' arguments are reflected accurately in the report and that such modifications are not
necessary. The Panel has made textual clarifications aligning the content of the paragraph more
closely with the language of the United States' submission referenced in this paragraph.
6.8. The United States asks the Panel to indicate in para graph 7.33 that, in light of the findings
regarding a breach of China's AMS commitments, "it is not necessary for the Panel to examine
whether support for corn provided a further basis to conclude that Chin a breached its AMS
commitment." China objects to the request by the United States. The Panel has rejected this request,
as the reasoning provided by the United States does not correspond with the Panel's rationale for
refraining from ruling on the corn measure. The Panel's reasoning is set out in section 7.2.2 of the
Report.
6.9. The United States requests that citations to further panel and Appellate Body reports be added
in para. 7.46 to reflect the United States' position more accurately. China opposes the United States'
request. The Panel has rejected this request on the grounds that paragraph 7.46 contains the Panel's
reasoning rather than a restatement of the partie s' arguments. The Panel has also clarified in the
last three sentences of that paragraph its reasoning with regard to one Appellate Body report relied
on by the United States.
6.10. China seeks to remove the references in paragraphs 7.66, 7.90 and 7.95 to the so-called No.
1 Documents being implemented by more specific legal instruments. China explains that No. 1
Documents "provide only general guidance on a broad range of many hundreds of policy issues". In
a similar vein, China seeks to remove a reference in paragraphs 7.90 and 7.95 suggesting that the
2004 Grain Opinion and the 2004 Grain Distribution Regulation contain an authorization for adoption
or maintenance of the TPRP for corn. The United States opposes China's request. The Panel has
made textual modifications in these paragraphs and the related footnotes to clarify its understanding
of the relevant regulatory framework and, in particular, the relation between No. 1 Documents, the
2004 Grain Opinion and the 2004 Grain Distribution Regulation on the one hand, and more specific
legal instruments, on the other hand.
6.11. Further to the United States' request, the Panel has clarified in footnote 155 to paragraph
7.67 its understanding of the word "decoupling" used in Exhibit CHN-79B.
6.12. China requests the Panel to mo dify the wording of the first sentence of para graph 7.69 and
delete the second sentence of that paragraph, because Exhibit USA-102 cited in that paragraph does
not support, in China's view, the finding that China continued purchases of corn at significant levels
for stock reserve purposes past 2016. The United States objects to China's request. The Panel's
findings in paragraph 7.69 are not based solely on exhibit USA -102, but rather on the totality of
evidence on the record. Therefore, the Panel has modified the language of these two sentences and
added a footnote to reflect that understanding more clearly.

6.13. The Panel has made clarifying modifications to the language of footnote 188 to paragraph
7.78 and corrected references in that paragraph , following China's request. However, in line with
the United States' request, the Panel has rejected China's suggestion to remove the last sentence
in that footnote.
6.14. Following China's request, the Panel has added in paragraph 7.88 a reference to statements
mentioned in China's submissions and concerning the risk of reintroduction of the corn measure.
With regard to the same paragraph, the Panel has rejected the United States' request to refer to the
lack of formal termination of the TPRP for corn, as, in the Panel's view, this argument concerns the
expiry of the corn measure, rather than the risk of its reintroduction.
6.15. Regarding paragraph 7.102, China requests that the Panel combine items c. and d. such that
the combined item would be read as follows: "c. Mid- to late-season Indica rice and Japonica rice:
Liaoning, Jilin, Heilongjiang, Jiangsu, Anhui, Jiangxi, Henan, Hubei, Hunan, Guangxi, Sichuan. " We
have accepted China's suggested revision.
6.16. Regarding paragraphs 7.130 and 7.132, the United States notes that Article 1 of the
Agreement on Agriculture contains a number of definitions, many of which are unrelated to the
present dispute. Consequently, the United States requests a more specific reference to Article 1(a)
and 1(h) be utilized in the mentioned paragraphs. We agree and have introduced the mentioned
revisions. China notes that the concurrent application of Annex 3 and the CDM in the tables of
supporting material is not limited to Article 1(a) and 1(h) and discusses some examples. For China,
the Panel is correct in making a general reference to Article 1 in both instances and for this reason,
it requests that the Panel reject the proposed change. After assessing both parties' comments, the
Panel decided to deny the United States' request for paragraph 7.130, but grant it for paragraph
7.132.
6.17. Regarding paragraph 7.157, the United States note s that the language used appear s to
identify the two-step calculation process established by Article 1(a) and 1(h) of the Agreement on
Agriculture in an imprecise manner and , therefore, suggests revising it. China argues that as the
Panel noted in paragraph 7.157, Article 1(a)(ii) concerns the calculation of Current AMS, while Article
1(h)(ii) defines Current Total AMS. For this reason, China submits that the United States' suggestion
is imprecise, and proposes a different language. The Panel introduced some modifications to improve
the overall clarity of the paragraph.
6.18. Regarding paragraph 7.193, the United States requests modification in order to clarify that
the Panel is comparing the external reference price used to calculate the AMS or value of market
price support in the base period and the FERP used in subsequent calculations. We note that. in this
paragraph, particularly in small romans (i), the Panel is drawing a comparison between the base
period and the FERP. We have introduced some revisions to enhance the clarity of the paragraph.
6.19. Regarding paragraph 7.204, China suggests that the Panel replace "construct" with "source"
in the last sentence of this paragraph, as China's FERP based on an average of the period 1996 -
1998 can be sourced from China's tables of supporting materials, and need not be constructed from
them. We have accepted this suggestion, and modified the wording accordingly.
6.20. Regarding paragraph 7.213, the United States suggests deleting a particular sentence
regarding the base periods used by Members. We agree with the U nited States and have removed
the sentence. Consequently, there is no need to address China's comment on the same sentence.
6.21. Regarding paragraph 7.219, China suggests the deletion of the entirety of this paragraph as
it considers it repetitive. The Panel n otes that this paragraph is meant to provide a brief summary
of the parties' arguments and it serves as an introduction before entering into the Panel's analysis.
For this reason, we decline China's suggestion.
6.22. Regarding paragraph 7.220, the United States suggests revisions to clarify the Panel's
assessment of the connection between CDM and the calculations made during the base period. Since
the Panel's statement regarding Article 1(a)(i) is correct, according to China, China requests that
the Panel not accept the United States' suggestion. We have introduced some modifications to the
mentioned paragraph.

6.23. Regarding paragraph 7.248, China suggest s changing the word "interpreted" in the first
sentence of this paragraph, with "considered". We agree with China's suggestion. China also
requests that the Panel modifies the text of the fo urth sentence by replacing "China's do mestic
support commitment level" with "a WTO Member's domestic support commitment level". We observe
that the proposed modification would have the effect of turning the Panel's analysis into a general
statement, not necessarily limited to the case at hand. For this reason, we decline China's
suggestion. Finally, China suggests that some revisions are introduced to the last sentence of this
paragraph to improve its clarity. The United States objects to China's request that the Panel delete
the final sentence as it is helpful to retain this language. The Panel introduced some modifications
to this sentence.
6.24. Regarding paragraph 7.249, China sug gests a correction for what appears to be a
typographical error in the first sentence of this paragraph 7.249. Specifically, China suggest deleting
the term "figure" at the end of line 3. The United States made no comments on this request. We
note that the term "figure" is not a typographical error. It is meant to replace the term "the side of
the hypothetical equation representing the Base Total AMS" in the first part of this sentence, which
is a numerical value and not a mathematical expression. For this reason, we decline China's
suggestion.
6.25. Regarding paragraph 7.299, China requests that the Panel replace "state-owned enterprises"
with "designated enterprises ". The United States objects to China 's proposed change to this
paragraph. The original phrase is, in fact, a quotation from the United States and the relevant
sentence has been modified to reflect this.
6.26. Regarding paragraphs 7.349 and 7.350, the United States requested the inclusion of a
footnote in order to more accurately reflect the arguments of the parties, particularly its own. China
does not consider it necessary that the Panel insert the new footnote proposed by the United States.
Should the Panel wish to consider the United States' request, China opposes the change proposed
by the United States. We agree with the United States that additional information regarding its
arguments was appropriate and have therefore included the relevant information in the text of
paragraph 7.349 and in a footnote within paragraph 7.350.
6.27. Regarding paragraphs 7.385, 7.394, 7.395 and 7.400, China believes that it is inaccurate to
state that certain data regarding the volume of production of various types of rice nationally, and in
the covered provinces, is "provided exclusively by the United States". China thus requests the Panel
revise the relevant sentences to remove references to data "provided exclusively by the United
States". We have declined to do so. The data being used by the Panel in those particular contexts
was in fact provided exclusively by the United Stat es, as China did not present its own data which
the Panel could use in this regard, as an alternative. Additionally, the fact that only the United States
presented such data resulted in the calculation of separate MPS values for rice, based on each party's
separate breakdown – a fact which is clearly stated before each relevant table.
6.28. Regarding paragraphs 7.412, 7.413 and 8.1, the United States requests that the Panel's
articulations of its legal conclusions reflect the findings that show that China exceede d its
commitment level of "nil" with respect to each of the three products for which the Panel has made
findings. China made no comments on this request. We have introduced some modifications to reflect
this request, except when dealing with Current Total AMS as this calculation is not product-specific.
7 FINDINGS
7.1 United States' request for partially open Panel meetings with the parties
7.1.1 Procedural background
7.1. At the Panel's organizational meeting, the United States enquired with China whether it would
agree to the Panel meetings being open to observation by other WTO Members and the public, either
in full or in part. China disagreed with this request, resulting in the United States submitting a written
request that the Panel meetings be partially open.19 The parties submitted written comments on this
request and on 5 September 2017, the Panel declined the United States' request. In its

19 United States' comments on the draft timetable and working procedures, paras. 5-6.

communication, the Panel informed the parties that the reasoning supporting the Panel's decision
would be communicated to the parties in due course, and in any case, no later than the issuance of
the Interim Report.
7.1.2 Introduction
7.2. The United States argues that, under Article 18.2 of the DSU, it has the right to disclose its
own statements to the public. 20 As a result, the United Stat es suggests that the Panel adopt
procedures to allow WTO Members and the public access to United States' statements made during
the Panel meetings. 21 Additionally, the United States argues, on the basis of the reasoning in
previous disputes 22, that parties who wish to disclose their statements made during the Panel
meetings may do so, regardless of the opposing party's decision to keep its own statements
confidential, and that the right of confidentiality of other parties would not be prejudic ed by the
United States' decision to disclose its own statements.23
7.3. The United States asserts that the Appellate Body had previously decided it could grant each
party or third party's request to disclose its own statements and answers at the oral hearing an d
that it would not affect the rights of others to maintain the confidentiality of their statements. 24
Thus, the United States argues that the Panel in this dispute is able to grant the United States'
request to disclose its own statements at the Panel meet ing without affecting China's right to
maintain the confidentiality of its submissions. 25 The United States notes that three recent
proceedings "have assisted one party requesting to make its statements publicly by partially opening
the relevant meeting": US – OCTG (Korea); US – Tuna II (Mexico) (Article 22.6 – US) and US – Tuna
II (Mexico) (Article 21.5 – Mexico).26
7.4. China asks that the Panel reject the United States' request for a partial opening to the public
of the Panel meetings with the parties and thir d parties in these proceedings. 27 To support its
request, China argues that under the DSU, the general rule is that submissions to panels and the
Appellate Body are confidential and that their meetings with the parties and third parties are closed
to the public.28 Despite these general rules, China notes that panels and the Appellate Body have at
times considered and granted requests to open their meetings with the parties and third parties
where both parties waived their right to confidentiality and requeste d that a WTO adjudicator's
meeting be open to the public.29 China discusses a number of cases where adjudicators have refused
to open, or partially open, meetings where one party has opposed such opening. 30 For China, the
correct approach to a WTO adjudicator's disposition of requests to open its meeting to the public is
to agree to such openings only where both parties agree that a meeting should be opened, and to
provide for appropriate protection for the statements and interventions of third parties that i nvoke

20 United States' comments on the draft timetable and working procedures, para. 6.
21 United States' comments on the draft timetable and working procedures, para. 6.
22 United States' comments on the draft timetable and working procedures, para. 6
(referring to Appellate Body Report, US – Continued Suspension, Annex IV, para. 6).
23 United States' comments on the draft timetable and working procedures, para. 7.
24 United States' comments on the draft timetable and working procedures, para. 6
(referring to Appellate Body Report, US – Continued Suspension, Annex IV, para. 6).
25 United States' comments on the draft timetable and working procedures, para. 7.
26 United States' comments on the draft timetable and working procedures, para. 7.
27 China's comments on the United States' comments on the draft timetable and working procedures,
para. 65.
28 China's comments on the United States' comments on the draft timetable and working procedures,
para. 25.
29 China's comments on the United States' comments on the draft timetable and working procedures,
para. 34.
30 China's comments on the United States' comments on the draft timetable and working procedures,
para. 36 (referring to Appellate Body Report, EU – Biodiesel (Argentina), Annex D-2, paras. 2-3, 7; Decision by
the Arbitrator, US – Gambling (Article 22.6 – US), para. 2.29 and; Panel Report, US – Upland Cotton
(Article 21.5 – Brazil), paras. 8.16-8.20).

their right to preserve the confidentiality of their statements and observations .31 Exceptions to this
general approach should, if allowed at all, be limited to very particular circumstances.32
7.5. In addition, China contends that the Appellate Body has pr eviously considered "whether the
request of the participants to forego confidentiality protection satisfies the requirements of fairness
and integrity that are the essential attributes of the appellate process and define the relationship
between the Appellate Body and the participants".33 China refers to US – Tuna II (Mexico) and argues
that the arbitrator in that dispute recognized potential due process implications. 34 Finally, China
argues that partially open meetings in these proceedings would have to be l imited not only to the
United States' statements of its own positions that do not disclose China's position, but it would also
likely have to be limited by the existence of certain information that is designated as confidential.
China contends that in these circumstances, it is likely that there would be very little of the United
States' statements and interventions that could be shown to the public in a partially open meeting,
and that what little there is may not be comprehensible. China thus claims that the complexity of
the factual questions involved, and the fact that certain information would likely have to be
designated as confidential, means that there would be very little by way of enhanced transparency
from a partially open meeting.
7.6. For China, bal ancing the requirements for confidentiality and the integrity of the dispute
settlement process against any enhanced transparency, therefore, strongly suggests that the Panel
should decline the United States' request for a partially open meeting. 35 Finally, China claims that
none of the special considerations that have exceptionally supported a request by only one party for
a partial opening to the public of a WTO adjudicator's meeting is present in these proceedings.36
7.1.3 Panel's analysis
7.1.3.1 Introduction
7.7. The United States' request is based on two main components: (i) the proposition that under
Article 18.2 of the DSU, the United States has the right to disclose its statements to the public 37,
and (ii) the proposition that, in previous instances, panels and the Appellate Body have agreed to
hold open meetings, either in full or in part. This last component, in turn, is divided in to two
arguments: the "underlying rationale" for previous decisions by panels and the Appellate Body to
open their meetings to observati on by other WTO Members and the public 38 and the claim that in
three recent proceedings , the adjudicators have "assisted one party requesting to make its
statements publicly by partially opening the relevant meeting", namely, the panel in US – OCTG
(Korea), the arbitrator in the DSU Article 22.6 proceedings in US – Tuna II (Mexico) and the
compliance panels in the same dispute.39
7.1.3.2 Article 18.2 of the DSU
7.8. We begin by noting that the United States contends that Article 18.2 of the DSU confers a right
on the Uni ted States, as a party to the dispute, to disclose statements of its own position to the
public.40 The United States suggests that the Panel adopt procedures to allow WTO Members and

31 China's comments on the United States' comments on the draft timetable and working procedures,
para. 38.
32 China's comments on the United States' comments on the draft timetable and working procedures,
para. 39.
33 China's comments on the United States' comments on the draft timetable and working procedures,
para. 32 (referring to Appellate Body Report, US – Continued Suspension/Canada – Continued Suspension,
Annex IV, para. 6 (emphasis and underlining added)).
34 China's comments on the United States' comments on the draft timetable and working procedures,
para. 33 (referring to Decision by the Arbitrator, US – Tuna II Mexico (Article 22.6 – US), para. 2.26).
35 China's comments on the United States' comments on the draft timetable and working procedures,
para. 53.
36 China's comments on the United States' comments on the draft timetable and working procedures,
para. 56.
37 United States' comments on the draft timetable and working procedures, para. 6.
38 United States' comments on the draft timetable and working procedures, para. 6.
39 United States' comments on the draft timetable and working procedures, para. 7.
40 United States' comments on the draft timetable and working procedures, para. 6.

the public access to the United States' statements during the Panel meetin gs.41 China argues that
under the DSU, the general rule is that submissions to panels and the Appellate Body are
confidential, that their meetings with the parties and third parties are closed to the public, and that
this general rule should be upheld in this case.42 China also contends that the particularly sensitive
matters that will arise in this dispute make it imperative that the Panel apply the general rule that
meetings are opened to the public only where there is agreement by both parties.43
7.9. We observe that in principle there is nothing in the text of the DSU establishing an explicit right
for WTO Members to have fully or partially open meetings. On the contrary, the Working Procedures
in Appendix 3 of the DSU foresee that panels meet in closed session 44, suggesting that the default
situation is that panel meetings are closed to the public. We are nonetheless mindful that pursuant
to Article 12.1 of the DSU, a panel may depart from the Working Procedures in Appendix 3, provided
that the panel consults the parties to the dispute. In our view, this provision grants panels the power
to adopt procedural rules that depart from or complement those already contained in Appendix 3.
Thus, a panel can depart from the default situation where panel meetings are held in closed session
and consequently grant a request from a party to hold an open meeting, in full or in part. However,
the text of the DSU leaves this decision to the discretion of the panel and does not present it as an
absolute right of the parties to a dispute.
7.10. Article 18.2 provides as follows:
Article 18
Communications with the Panel or Appellate Body
…
2. Written submissions to the panel or th e Appellate Body shall be treated as
confidential, but shall be made available to the parties to the dispute. Nothing in this
Understanding shall preclude a party to a dispute from disclosing statements of its own
positions to the public. Members shall tre at as confidential information submitted by
another Member to the panel or the Appellate Body which that Member has designated
as confidential. A party to a dispute shall also, upon request of a Member, provide a
non-confidential summary of the information contained in its written submissions that
could be disclosed to the public.
7.11. We agree with the United States that this provision sets out that nothing in the DSU "shall
preclude a party to a dispute from disclosing statements of its own positions to the public". However,
it does not follow that because a Member has this right, a panel is compelled to open its meetings
to the public, in full or in part. In our view, by denying this request the Panel would not be prohibiting
the United States from disclosing statements of its own positions to the public. Neither is the Panel
depriving the United States of the right conferred in the second sentence of Article 18.2. We do not
see how, by declining this request, the Panel would be unreasonably impinging on the me ntioned
right as the United States would remain free to exercise its right in a variety of ways.
7.12. In this connection, we observe that statements of the United States' position made in Panel
meetings could be disclosed by the United States in ways that do not require the Panel to take an
active role.45 Indeed, we do not read the second sentence of Article 18.2 of the DSU as necessarily
involving panels in a Member's exercise of this right or directing panels to assist Members in

41 United States' comments on the draft timetable and working procedures, para. 6.
42 China's comments on the United States' comments on the draft timetable and working procedures,
para. 25.
43 China's comments on the United States' comments on the draft timetable and working procedures,
para. 49.
44 Appendix 3 to the DSU, para. 2 states that: "The panel shall meet in closed session. The parties to
the dispute, and interested parties, shall be present at the meetings only when invited by the panel to appear
before it."
45 We note that the arbitrator in US – Tuna II (Mexico) (Article 22.6 – US) reached a similar conclusion
in this regard: "Indeed, we recall in this respect that even if we were to deny the United States' request, the
United States could still exercise its right to disclose statements of its own positions in a different form or on a
different occasion". Decision by the Arbitrator, US – Tuna II (Mexico) (Article 22.6 – US), fn 28.

disclosing their position to t he public. In addition, we observe that as a matter of practice, some
Members in certain disputes use the right set forth in Article 18.2 and routinely publish submissions
made to panels, including their oral statements, on publicly available sites, regard less of whether
the meetings were open to the public. 46 Thus, we do not perceive Article 18.2 of the DSU to be
dispositive of our assessment of the United States' request. In this vein, to the extent that the United
States argues that Article 18.2 of the DS U indicates that the Panel should grant the mentioned
request, we find the United States' reliance on this provision to be misplaced.
7.1.3.3 Prior disputes addressing open or partially open hearings
7.13. We now move to assess the United States' arguments regarding pre vious instances where
WTO adjudicators have authorized open or partially open hearings. The United States contends that
when the Appellate Body in US – Continued Suspension was presented with a request by the parties
to open the meeting to viewing by the public, it had concluded that each party has a right to maintain
confidentiality of its own statements, and therefore also the ability to request that the confidentiality
of the proceeding be lifted for its statements.47 Further, the United States submits that the Appellate
Body went on to reason that such a request by one party does not affect another Member's right to
confidentiality.48 According to the United States, the Appellate Body in that dispute held that "oral
statements and responses to questions by third participants wishing to maintain the confidentiality
of their submissions will not be subject to public observation". 49 For the United States, as the
Appellate Body decided it could grant each party or third party's request to disclose its own
statements and answers at the oral hearing and that it would not affect the rights of others to
maintain the confidentiality of their statements, the Panel here can grant the United States' request.
7.14. China submits that the Appellate Body in that case considered that, as a general matter, WTO
adjudicators would require requests from both parties to open to the public their meetings with the
parties or third parties because the relationship of confidentiality concerns both parties collectively.
China thus submits t hat the United States is wrong when it implies that the Appellate Body's
reasoning provided for a party-by-party and third party-by-third party assessment.50 Regarding the
integrity of the dispute settlement proceedings, China contends that the Appellate Body considered
"whether the request of the participants to forego confidentiality protection satisfies the
requirements of fairness and integrity that are the essential attributes of the appellate process and
define the relationship between the Appellate Bo dy and the participants".51 China also refers to US
– COOL, and submits that the panel opened its meeting with the parties to the public following a
joint request by the United States and Canada, a request to which Mexico, as a co-complainant, did
not object.52 China further refers to the compliance panel in US – Large Civil Aircraft (2nd complaint)
(Article 21.5 – EU), which according to China adopted, at the request of both parties, procedures for
viewing by the public of those parts of its meetings with the parties and third parties that did not
concern confidential information.53
7.15. We begin by noting that in US – Continued Suspension, all three participants in the appeal,
namely, Canada, the European Communities and the United States, presented a request t o allow
public observation of the oral hearing and only some of the third participants opposed this request.
In other words, there was agreement among all of the parties to the original panel proceedings –
the participants in the appeal process – to have a fully open hearing. This stands in stark contrast

46 The Panel does not express any view on the consistency of this practice with the DSU.
47 United States' comments on the draft timetable and working procedures, para. 6 (referring to
Appellate Body Report, US – Continued Suspension, Annex IV, para. 6).
48 United States' comments on the draft timetable and working procedures, para. 6.
49 United States' comments on the draft timetable and working procedures, para. 6 (referring to
Appellate Body Report, US – Continued Suspension, Annex IV, para. 11(b)).
50 China's comments on the United States' comments on the draft timetable and working procedures,
para. 29.
51 China's comments on the United States' comments on the draft timetable and working procedures,
para. 32 (referring to Appellate Body Report, US – Continued Suspension/Canada – Continued Suspension,
Annex IV, para. 6 (emphasis and underlining added)).
52 China's comments on the United States' comments on the draft timetable and working procedures,
para. 35 (referring to Panel Report, US – COOL, paras. 1.11-13).
53 China's comments on the United States' comments on the draft timetable and working procedures,
para. 35 (referring to Panel Report, US – Large Civil Aircraft (Article 21.5 – EU), para. 1.20 and Annex A-3,
para. 6. See similarly Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan), paras. 17-19, Annex
II, paras. 1, 4, 6-8).

to the present case where there is no agreement between the two parties to the dispute to open the
meetings to the public. In our view, this difference is significant. It goes to the nature of the request
itself: in US _ Continued Suspension the Appellate Body was facing a request to have a fully open
meeting while in this case we are confronted with a request for partially open meetings. While the
issue before the Appellate Body there was how to accom modate such request in the light of the
opposition of some third participants, in this case the issue is whether to grant a similar request
when one party does not consent to opening the meetings even partially. Indeed, the Appellate Body
emphasized the fa ct that it was a joint request of the participants that led to the request being
granted.54
7.16. The Appellate Body stated there that the confidentiality requirement in Article 17.10 of the
DSU is more properly understood as operating in a relational manner as there are different sets of
relationships that are implicated in appellate proceedings, including (i) a relationship between the
participants and the Appellate Body and (ii) a relationship between the third participants and the
Appellate Body.55 The Appellate Body reasoned that the confidentiality requirement was intended to
foster the system of dispute settlement under conditions of fairness, impartiality, independence and
integrity and that in that case, as the participants had jointly requested authorizat ion to forego
confidentiality protection for their communications with the Appellate Body at the oral hearing, such
request did not extend to any communications, nor touch upon the relationship, between the third
participants and the Appellate Body, and thus, the right to confidentiality of third participants vis-à-
vis the Appellate Body was not implicated by the joint request. 56 The Appellate Body ultimately
concluded that it had the power to exercise control over the conduct of the oral hearing, including
authorizing the lifting of confidentiality at the joint request of the participants as long as this did not
adversely affect the rights and interests of the third participants or the integrity of the appellate
process.57
7.17. We thus do not agree with the United States' interpretation of the Appellate Body's
statements. Unlike this dispute, the request before the Appellate Body was a joint request. We
therefore fail to see how the cited precedent lends the support the United States claims it does. To
us, the Appe llate Body's assessment in that case can also be interpreted as buttressing China's
argument that meetings have been opened to the public whenever the request was accepted by all
parties.
7.18. In any event, the Appellate Body concluded that it had the power to authorize such a request,
a conclusion that, by analogy, goes in line with our reading of Article 12.1 of the DSU. In our view,
this provision similarly grants us the power to depart from the default situation where panel meetings
are held in closed sessi on and consequently allows us to grant a request from a party to hold an
open meeting, in full or in part. However, and importantly, the Appellate Body did not conclude that
it was or could be compelled to grant such a request by virtue of the parties' rig ht to disclose
statements of their own position.
7.19. We now move to assess the United States' arguments regarding previous instances where
partially open hearings have been authorized. The United States argues that three recent
proceedings have "assisted one party requesting to make its statements publicly by partially opening
the relevant meeting", namely, the panel in US – OCTG (Korea), the arbitrator in the DSU Article
22.6 proceedings in US – Tuna II (Mexico) and the compliance panels in the same dispute.58 In US
– OCTG (Korea), the United States argues that the panel agreed that it may open its meetings with

54 "In this case, the participants have jointly requested authorization to forego confidentiality protection
for their communications with the appellate body at the oral hearing"; "Thus, the Appellate Body has the power
to exercise control over the conduct of the oral hearing, including authorizing the lifting of confidentiality at the
joint request of the participants as long as this does not adversely affect the rights and interests of the third
participants or the integrity of the appellate process"; and "The request for public observation of the oral
hearing has been made jointly by the three participants, Canada, the European Communities, and the United
States. As we explained earlier, the Appellate Body has the power to authorize a joint request by the
participants to lift confidentiality, provided that this does not affect the confidentiality of the relationship
between the third participants and the Appellate Body, or impair the integrity of the appellate process."
Appellate Body Report, US – Continued Suspension, Annex IV, paras 6, 7 and 10 (emphasis added).
55 Appellate Body Report, US – Continued Suspension, Annex IV, para. 6.
56 Appellate Body Report, US – Continued Suspension, Annex IV, para. 6.
57 Appellate Body Report, US – Continued Suspension, Annex IV, para. 7.
58 United States' comments on the draft timetable and working procedures, para. 7.

the parties and third parties to the public, either in whole or in part, subject to appropriate
procedures to be adopted by the panel after consulting with the parties and third parties.59 In US –
Tuna II (Mexico) (Article 22.6 – US), the United States asserts that the arbitrator held that it "may,
upon request by a party, authorize that party to lift the confidentiality, by way of delayed viewing,
of its own statements made during the Arbitrator's meeting with the parties". 60 Finally, the United
States refers to the compliance panels in the US – Tuna II (Mexico) (Article 21.5 - Mexico) and US
– Tuna II (Mexico) (Article 21.5 – United States) proceedings, where the United States notes that it
was agreed that panels "may, upon request by a party or third party, authorize that party, or third
party, to lift the confidentiality [of the proceedings], by way of delayed viewing, of its own
statements made during t he Panel's meeting with the parties, or the special session for third
parties".61
7.20. China, on the other hand, refers to several cases in which, it alleges, panels and the Appellate
Body have generally rejected the open hearing requests where only one party requested the opening
of a meeting to the public, and the other party objected to t hat request. China argues that in EU –
Biodiesel (Argentina) , the Appellate Body rejected an EU request to open its meeting with the
participants and third participants, inter alia, because the other participant, Argentina, had objected
to the request.62 Similarly, China contends that in US – Gambling (Article 22.6 – US), the arbitrator
declined a request by the United States to open its meeting with the parties, because Antigua, the
other party to those proceedings, had opposed opening the meeting. 63 China also refers to US –
Upland Cotton (Article 21.5 – Brazil) noting that the compliance panel rejected a US request that
only those parts of the panel meeting be open to the public during which the United States presented
its position.64 These disputes, their reasoning and their findings have been taken into consideration
by the Panel, and have helped to formulate the conclusions below.
7.21. When the United States submitted its request for a partially open meeting, and the Panel took
its decision to deny the United S tates' request, two of three of the panel reports the United States
relies on, i.e. the panel report in US – OCTG (Korea) and the second compliance panel reports in US
– Tuna II (Mexico) , had not yet been circulated to Members. In this regard, we note Chin a's
contention that for these reasons, it was not in a position to address the reasoning of those panels.65
We had similar difficulties because of the confidential nature of those disputes at the time we took
our decision. In this connection, we find it pro blematic that a party refers to proceedings in which
reports are still confidential and to which that party may have access but neither the other party nor
the Panel has. This hampers the other party's, in this case China's, right of defence and the Panel's
ability to conduct an objective assessment of the matter. Consequently, our decision to deny the
United States' request was not informed by the United States' arguments regarding these disputes.66
7.22. According to the United States, the arbitrator in US – Tuna II (Mexico) (Article 22.6 – US)
held that it "may, upon request by a party, authorize that party to lift the confidentiality, by way of
delayed viewing, of its own statements made during the Arbitrator's meeting with the parties".67 We

59 United States' comments on the draft timetable and working procedures, para. 7.
60 United States' comments on the draft timetable and working procedures, para. 7 (referring to US –
Tuna II (Mexico) (Article 22.6 – US) Annex A-1 para. 3).
61 United States' comments on the draft timetable and working procedures, para. 7.
62 China's comments on the United States' comments on the draft timetable and working procedures,
para. 36 (referring to Appellate Body Report, EU – Biodiesel (Argentina), Annex D-2, paras. 2-3, 7).
63 China's comments on the United States' comments on the draft timetable and working procedures,
para. 36 (referring to Decision by the Arbitrator, US – Gambling (Article 22.6 – US), para. 2.29).
64 China's comments on the United States' comments on the draft timetable and working procedures,
para. 36 (referring to Panel Report, US – Upland Cotton (Article 21.5 – Brazil), paras. 8.16-8.20).
65 China's comments on the United States' comments on the draft timetable and working procedures,
para. 57.
66 We do note, however, in issuing our supporting reasoning to the parties in this Report, that the
reports in those proceedings have now been circulated to Members. In reviewing them, we were able to
confirm our reasoning as they did not, in our view, support the United States' contentions. In particular, we
observe that the panel in US – OCTG (Korea) did not grant the United States' request to hold a partially open
meeting, contrary to what the United States' seemed to have suggested. Thus, at the time we took our
decision to the decline the United States' request, there had only been one dispute in which a partially open
meeting had been authorized: US – Tuna II (Mexico) (Article 22.6 – US) and the second compliance panels in
this same dispute.
67 United States' comments on the draft timetable and working procedures, para. 7 (referring to
Decision by the Arbitrator, US – Tuna II (Mexico) (Article 22.6 – US) Annex A-1 para. 3).

note that these were the first proceedings where a partially open meeting has ever been authorized,
as before, panels only agreed to open their meetings to the public whenever there was consent by
all the parties, or at least, no opposition to such request.68 In its reasoning, the arbitrator considered
that in principle, it had the power to authorize the United States to disclose statements of its own
positions (but not those of Mexico) to the public through a partially open arbitrator's meeting, even
if Mexico opposed the Un ited States' request. The arbitrator elaborated and stated that one party
cannot simply veto another party's request that it be authorized to disclose statements of its own
positions.69 However, we also observe that the arbitrator stated that it did not fol low that it must
automatically grant the United States' request.70 Notably, it stated that although the United States
has an autonomous right to disclose statements of its own positions to the public, that right is not
absolute. Rather, that right found lim itation in Mexico's right not to have statements of its own
positions disclosed by the United States during any public parts of the arbitrator's meeting.
7.23. From the above statements, we observe that the arbitrator's reasoning gave an important
role to the r ight that each Member has to disclose statements of its own position pursuant to
Article 18.2 of the DSU. By framing the legal question as one predominantly dealing with the right
of the United States to disclose statements of its own position, the arbitra tor was able to address
the fact that Mexico expressly opposed such request being granted. Accord ing to the arbitrator, a
party cannot "simply veto another party's request that it be authorized to disclose statements of its
own positions".71 However, and as we explained in paragraph 7.11 above, we do not find that a
party's right to disclose statements of its own position is dispositive for our decision not to open our
meetings to the public. This is even more so in a situation where one party directly opposes the
request. In our view, this right can be exercised autonomously by each Member and should not be
confused or conflated with the question of whether a panel should hold an open meeting, in full or
in part. Consent from the parties whose statements could be made public if a panel decides to hold
open meetings may well be a necessary condition to do so, but it may not be a sufficient condition,
as it remains within the discretion of the panel to grant such a request.
7.24. In this vein, we agree with the arbitrator that a party cannot simply veto another party's
decision to disclose statements of its own position to the public. Article 18.2 of the DSU does not
condition a Member's right to disclose its statements on the approval of another Member. However,
we do not fully understand why the arbitrator framed this issue as being about whether a party can
veto another party seeking authorization from the panel to disclose statements of its own position.
As discussed earlier, Article 18.2 of the DSU does not require that a party seek authorization from a
panel to disclose its statements. To us, the nature of the United States' request in that case was
that of a partial opening of the arbitrator's meeting, a decision which required authorization from
the arbitrator. We see this as different from merely requesting that it be allowed to disclose its own
statements, a matter that did not need the arbitrator's authorization. For these reasons, we are
unable to fully agree with the arbitrator's approach in current assessment of the United States'
request.
7.25. We are nonetheless mindful that Members' rights to confidentiality and to disclose statements
of their own position under the DSU play an important role in our assessment of the United States'
request. However, this is merely a part of the legal issue before us. The overarching issu e we face
is whether a panel should use its discretion and open its meeting for public observation, even
partially, in the light of one party opposing such opening.
7.1.3.4 Concluding considerations
7.26. We recall that the Appellate Body in US – Continued Suspension stated that the confidentiality
requirement was intended to foster the system of dispute settlement under conditions of fairness,

68 In this regard, we recall US – Continued Suspension/Canada – Continued Suspension, at both the
Panel and Appellate Body stage, the panel in US – COOL, and the US – Large Civil Aircraft (Article 21.5 – EU)
compliance panel, where meetings were opened with the consent of both parties. In contrast, the Appellate
Body in EU – Biodiesel (Argentina), the compliance panel in US – Upland Cotton (Article 21.5 – Brazil), the
arbitrator in US – Gambling (Article 22.6 US) and the panel in US – OCTG (Korea) all rejected the request for
open hearings where one party did not consent.
69 Decision by the Arbitrator, US – Tuna II (Mexico) (Article 22.6 – US), para. 2.21.
70 Decision by the Arbitrator, US – Tuna II (Mexico) (Article 22.6 – US), para. 2.24.
71 Decision by the Arbitrator, US – Tuna II (Mexico) (Article 22.6 – US), para. 2.21.

impartiality, independence and integrity72, and that it had the power to authorize requests for holding
fully open hearings, prov ided that this does not affect the confidentiality in the relations between
the third participants and the Appellate Body, or impair the integrity of the appellate process. 73 We
thus are of the view that in the process of exercising our discretion and deciding whether to grant
or not the United States' request we should weigh and balance several factors, including fairness,
independence, due process, the rights and interests of the parties to the dispute, and the integrity
of the panel process.74
7.27. In this connection, we note that the United States argues that the opening of panel meetings
to observation serves both to heighten public confidence in the WTO and to build familiarity in those
Members that do not participate often in the dispute settlement system by letting them observe the
high-quality work of panels. According to the United States, numerous WTO panels have opened
their proceedings to the public and those experiences have been beneficial for Members and the
public, and thus ultimately for the WTO.75 It thus seems that the United States has a general interest
in the transparency of the dispute settlement mechanism so as to heighten the public confidence in
the WTO system and to help other Members build familiarity with it.
7.28. On the other hand, China subm its that a proper balancing of the requirements for
confidentiality and the integrity of the dispute settlement process, against any potential enhanced
transparency, strongly suggests that the Panel should decline the United States' request for a
partially open meeting.76 For China, this dispute involves complex factual questions, and China states
that it anticipates that certain of the evidence it provides will have to be designated confidential.
China contends that in these circumstances, it is likely that there would be very little of the United
States' statements and interventions that could be shown to the public in a partially open meeting,
and that what little there is may not be comprehensible.77
7.29. We are thus required to balance the possible enhanced transparency of the dispute settlement
mechanism that could heighten public confidence in the WTO system and help other Members build
familiarity with it, on the one hand, and China's confidentiality rights and the integrity of the panel
process, on the other. In this connection, we are mindful of China's arguments that the complexity
of the factual questions involved, and the fact that certain information would likely have to be
designated confidential, may mean that any transparency resulting from partially open meetings
might actually be limited.78
7.30. Regarding the integrity of the panel process, and, in particular, the due process considerations
arising from the divergent interests of the parties, we believe that not having consent from all the
parties is a factor that should be heavily weighed by the Panel. Although we are well aware that
partially open meetings might be an option in situations where one party does not agree to hold a

72 Appellate Body Report, US – Continued Suspension, Annex IV, para. 6.
73 Appellate Body Report, US – Continued Suspension, Annex IV, para. 7.
74 We note that the arbitrator in US – Tuna II (Mexico) (Article 22.6 – US) also mentioned some similar
factors that may be of use in this process: namely (i) a non-disclosing party's right to confidentiality protection
of statements of its own position; (ii) due process; (iii) the prompt settlement of disputes; (iv) and the careful
and efficient discharge, or the integrity, of the adjudicative function. Decision by the Arbitrator, US – Tuna II
(Mexico) (Article 22.6 – US), para. 2.31.
75 United States' comments on the draft timetable and working procedures, para. 5.
76 China's comments on the United States' comments on the draft timetable and working procedures,
para. 53.
77 China's comments on the United States' comments on the draft timetable and working procedures,
para. 52. We note that during the organizational meeting, the United States expressed its opinion that it does
not agree with China's characterization that this matter is particularly complex.
78 We understand that this is so because if the Panel decides to partially open its meetings, it would
most likely have to follow an approach similar to that chosen by the arbitrator in US – Tuna II (Mexico)
(Article 22.6 – US) and adopt procedures that guarantee that China's confidentiality rights are duly protected.
In particular, we note that those procedures would most likely envisage having a delayed public broadcast of
the Panel's meeting so as to be able to perform a redaction process of the United States' statements to avoid
any inadvertent disclosure of China's arguments and position. We are mindful that in implementing such
redaction procedures, the possibility exists that the resulting recording which is to be shown to the public may
be fragmented and discontinuous. This result could make the arguments of the United States difficult to follow
and ultimately defeat the purpose of opening the hearing to the public. In other words, guaranteeing China's
confidentiality rights might require a redaction process following which the United States' interventions at the
meetings could be difficult for the public audience to understand. We can thus see that, in practice, a partially
open meeting may not be conducive to enhance the transparency of the dispute settlement mechanism.

fully open meeting, as was signalled by the arbitrator in US – Tuna II (Mexico) (Article 22.6 – US),
we do not necessarily agree with the reasoning presented by the arbitrator in those proceedings, as
discussed previously.79 In our view, if the Panel is going to exercise its discretionary powers to adopt
procedural rules, consent by the parties involved in the dispute should be an important factor to
weigh in its decision.
7.31. For the foregoing reasons, and especially (i) because the potential enhanced transparency
resulting from the Panel opening its meeting partially to the public might be limited in practice, and
(ii) due to China's express opposition to such request, we find that the balance weighs against
granting the United States' request. We thus decline to exercise our discretion to grant the request
to deviate from the stand ard working procedures in order to hold partially open meetings in th is
dispute.
7.2 The measures challenged in this dispute and China's claim relating to the expiry of
one of the measures
7.32. In its first written submission, China asserts that one of the measures which China understood
the United States was challenging – the Temporary Purchase and Reserve Policy (TPRP) for corn –
expired prior to the panel request and, as a result, it falls outside the Panel's terms of reference. 80
The United States disputes that the measure expired and argues, among other things, that China
incorrectly identified the TPRP for corn as one of the measures challenged in this dispute. 81 The
United States maintains that it "has challenged in its panel request the domestic support provided
to agricultural producers in China during the years 2012, 2013, 2014 and 2015, including support
provided to producers of wheat, Indica rice, Japonica rice and corn. "82 The United States considers
the TPRP for corn to constitute a series of legal instruments, rather than a measure. 83 As a result,
in the United States' view, a modification or expiry of the TPRP for corn "would not necessarily bring
a Member's domestic support in conformity with its commitments", if the level of domestic support
exceeds the commitment level. 84 In addition, the United States maintains that, in any event, the
corn measure did not expire and that the Panel should make findings and recommendations with
regard to that measure.
7.33. As a result, a disagreement ensued between the p arties on the nature and characterization
of the measures challenged by the United States and the alleged expiry of the measure relating to
corn. These are two preliminary issues which the Panel must address before turning to the substance
of the United States' claims. Accordingly, we will first consider the parties' arguments relating to the
measures at issue in this dispute. Depending on the outcome of this analysis, we will turn to the
question of whether the Panel should refrain from ruling on any of th e challenged measures. We
then outline the main characteristics of the measures that will be subject to the Panel's assessment.
7.2.1 The measures challenged by the United States
7.34. The United States refers to its panel request, arguing that it "describes four measures at
issue: the 'domestic support provided by China' (or 'China's domestic support in favour of agricultural
producers') in each of the years 2012, 2013, 2014 and 2015". 85 In that regard, the United States
distinguishes between the measures it is cha llenging and the arguments it makes to support its
claims.86 The United States explains that the reference to "China's domestic support in favour of
agricultural producers" in the panel request relates to the challenged measures and the reference to

79 See paragraph 1.22. above.
80 China's first written submission, paras. 278-282.
81 United States' opening statement at the first meeting of the Panel, para. 48; United States' comments
on China's challenge to the Panel's terms of reference, para. 15.
82 United States' comments on China's challenge to the Panel's terms of reference, para. 8.
83 United States' opening statement at the first meeting of the Panel, para. 50; United States' comments
on China's challenge to the Panel's terms of reference, para. 26.
84 United States' opening statement at the first meeting of the Panel, para. 50; United States' comments
on China's challenge to the Panel's terms of reference, para. 26.
85 United States' comments on China's challenge to the Panel's terms of reference, para. 14; United
86 United States' second written submission, paras. 15-16. United States' response to Panel question
No. 23, paras. 95-99.

"domestic support provided to producers of, inter alia, wheat, Indica rice, Japonica rice and corn" is
a preview of the United States' arguments.87
7.35. China submits that the United States' challenge in this dispute is limited to the provision of
market price support to wheat, rice and the TPRP for corn.88 China refers in that regard to the United
States' panel request listing legal instruments which establish market price support for wheat, Indica
rice, Japonica rice and corn. 89 China also quotes the United States' firs t written submission, which
mentions market price support program mes in the context of the challenged measures and the
object of the dispute.90
7.36. China further contends that the United States' characterization of the measures at issue as
the "level of domestic support" or "China's provision of domestic support" to agricultural producers,
is contradicted by the language of the panel request.91 In addition, China claims that if the measures
were indeed identified by the United States in such broad terms, it would fail to meet the specificity
requirement in Article 6.2 of the DSU.92 In China's view, the term "provision of domestic support to
Chinese agricultural producers" would cover various types of measures that constitute domestic
support, such as "amber box", "blue box" and "green box" measures, with regard to which the United
States has not presented substantive arguments.93 This, according to China, would raise serious due
process concerns, as China considers itself unable to defend domestic support measures for products
other than those covered by the United States' panel request and arguments put forward by the
United States.94 China also states that, under these circumstances, it would be inappropriate for the
Panel to issue recommendations with regard to such broadly defined measures, because the
responding Member would not know what steps to take in order to bring them into compliance.95
7.37. In response to China's arguments alleging lack of precision in the identification of the
measures at issue, the United State s maintains that it identified a specific measure challenged in
the dispute, which meets the requirement of an act or an omission of a Member.96 The United States
further explains its characterization of the measure at issue with the fact that the Agreement on
Agriculture seeks to limit the amount of domestic support a Member may provide, without prohibiting
any specific form of domestic support.97
7.38. Article 11 of the DSU requires a panel to make an objective assessment of the matter referred
to it for adjudication by the DSB.98 This matter consists of two elements: the specific measures at
issue and the legal basis of a complaint, both of which have to be identified in the request for the
establishment of a panel. 99 It is the panel request that must sufficiently precisely identify the

87 United States' second written submission, paras. 18-19 (quoting United Sates' request for the
establishment of a panel, p. 6).
88 China's first written submission, paras. 62 and 281; China's comments on the United States'
comments on China's challenge to the Panel's terms of reference, para. 28.
89 China's comments on the United States' comments on China's challenge to the Panel's terms of
reference, paras. 15-21; China's second written submission, paras. 26-33.
90 China's comments on the United States' comments on China's challenge to the Panel's terms of
reference, paras. 8-12; China's second written submission, paras. 34-37.
91 China's comments on the United States' comments on China's challenge to the Panel's terms of
reference, paras. 13-14.
92 China's comments on the United States' comments on China's challenge to the Panel's terms of
reference, para. 24 (citing Appellate Body Reports, US – Zeroing (Japan) (Article 21.5 – Japan), para. 116; and
EC and certain member States – Large Civil Aircraft, para. 645); China's opening statement at the first meeting
93 China's comments on the United States' comments on China's challenge to the Panel's terms of
reference, para. 24; China's comments on the United States' response to Panel question No. 59 (second
substantive meeting). Due to an anomaly in the numbering of the Panel's questions to the parties at the
Panel's second substantive meeting with the parties (where a small number of questions inadvertently
overlapped those of the first meeting), references to question Nos. 52-74 will include a reference to the
substantive meeting at which they were put to the parties, as demonstrated above.
94 China's second written submission, para. 65.
95 China's second written submission, para. 66.
96 United States' second written submission, paras. 23-24.
97 United States' second written submission, para. 25; United States' response to Panel question No. 1.
98 See also Article 7.1 of the DSU.
99 Article 6.2 of the DSU. Appellate Body Report, Guatemala – Cement I, para. 72.

measure at issue in a dispute. 100 Without an adequate identification in a panel request, a measure
will not form part of the matter covered by the panel's terms of reference.101
7.39. The panel request, and the identification of the challenged measures in particular, fulfil an
important due process role. As the Appellate Body noted in EC – Selected Customs Matters, "[t]he
word 'specific' in Article 6.2 establishes a specificity requirement regarding the identification of the
measures that serves the due process objective of notifying the parties and the third parties of the
measure(s) that constitute the object of the complaint. "102 The content of a panel request should
thus allow the respondent to discern the matter that is referred for adjudication.103
7.40. In light of the parties' disagreement over the measures at issue in this dispute, the Panel has
to examine the content of the panel request and determine the measures identified therein. In doing
so, the Panel has to carefully analyse the language of the panel request read as a whole and taking
into account the attendant circumstances. 104 We recall in this connection that while a party's
subsequent submissions during the panel proceedings cannot cure a defect in a panel request, they
may be consulted to confirm or clarify the meaning of the words used in the panel request.105
7.41. The United States' panel request reads, in relevant part:
China provides domestic support in favor of its agricultural producers. The level of
domestic support China provides is in excess of its commitment level of "nil" specified
in Section I of Part IV of its Schedule CLII because, for example, China provides
domestic support in excess of its product -specific de minimis level of 8.5 percent for
each of wheat, Indica rice, Japonica rice, and corn.106
7.42. The request goes on to list a number of legal instruments "through which China provides
domestic support in favour of agricultural producers, including support in favour of producers of
wheat, Indica rice, Japonica rice, and corn, operating collectively or separately." 107 The listed
instruments are grouped in five categories: general legal instruments concerning China's gra in
policies and those relating more specifically to market price support for producers of wheat, Indica
rice, Japonica rice and corn.108 The panel request further reads that such legal instruments "include
but [are] not limited to" the ones listed in the request.109
7.43. Finally, following a reference to Articles 3.2 and 6.3 Agreement on Agriculture, the panel
request contains the following statement:
In particular, China's domestic support in favor of agricultural producers, expressed in
terms of its current Total Aggregate Measurement of Support ( "Total AMS"), exceeds
China's final bound commitment level in 2012, 2013, 2014, and 2015 on the basis of
domestic support provided to producers of, inter alia, wheat, Indica rice, Japonica rice,
and corn. The United States further considers that, to the extent applicable, these
measures are inconsistent with China's obligation under Article 7.2(b) of the Agriculture
Agreement, because in 2012, 2013, 2014 and 2015, China provides domestic support

100 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes, para. 120; Panel Report,
Canada – Wheat Exports and Grain Imports, para. 6.10.
101 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes, para. 120.
102 Appellate Body Reports, EC – Selected Customs Matters, para. 152; and US – Carbon Steel,
para. 126.
103 Appellate Body Report, US – Continued Zeroing, para. 168.
104 Appellate Body Reports, China – HP-SSST (Japan), para. 5.13; EC and certain member States –
Large Civil Aircraft, para. 787; US – Carbon Steel, para. 127; US – Oil Country Tubular Goods Sunset Reviews,
paras. 164 and 169; US – Continued Zeroing, para. 161; and US – Zeroing (Japan) (Article 21.5 – Japan),
para. 108.
105 Appellate Body Reports US – Carbon Steel, para. 127; China – Raw Materials, para. 220; US –
Countervailing and Anti-Dumping Measures (China), para. 4.9; US – Countervailing Measures (China),
para. 4.20.
106 United States' request for the establishment of a panel, p. 1. (footnote omitted)
107 United States' request for the establishment of a panel, p. 1.
108 United States' request for the establishment of a panel, pp. 1-6.
109 United States' request for the establishment of a panel, p. 1.

for wheat, Indica rice, Japonica rice, and corn in excess of its product-specific de minimis
level of 8.5 per cent for each product.110
7.44. Looking at the above relevant excerpts of the United States' panel request, we note the claim
that China's provision of domestic support exceeds China's 8.5% de minimis level and, as a result,
China's commitment level of nil, relates to four separate produ cts, namely wheat, Indica rice,
Japonica rice and corn. While the panel request contains the terms "for example" and "inter alia" in
describing the product scope of the United States claims, the request is silent on any other products
for which China might have provided domestic support and whether the level of such support
exceeded the de minimis limit with regard to those products. In a similar vein, we find the reference
to "any amendments, or successor, or replacement, or implementing measures" vague an d not
allowing the identification of other specific measures that could be challenged in this dispute .111 As
a result, an objective reading of the panel request suggests that the United States was not
challenging China's provision of domestic support with re gard to agricultural products other than
wheat, Indica rice, Japonica rice and corn.
7.45. Further, with the exception of six general policy documents, the panel request refers
exclusively to legal instruments concerning China's market price support for producer s of wheat,
Indica rice, Japonica rice and corn. We note in that regard that market price support is only one type
of mechanism , which a Member can avail itself of to provide domestic support to agricultural
producers, another being, for example, direct pa yments. Yet, the United States does not refer to
any other kind of domestic support. This is in stark contrast to the total of 40 specific legal
instruments listed in the panel request concerning market price support and excluding the numerous
implementing regulations mentioned in the footnotes.
7.46. Against that backdrop, we are not persuaded by the United States' argument that the
references in the panel request to legal instruments concerning market price support for wheat,
Indica rice, Japonica rice and corn merely "preview" the United States' arguments, rather than
identify the measures at issue. We agree with the United States that a panel request may include
anticipation of complainant's arguments and that such arguments should not be interpreted to
narrow the scope of the measures or claims. 112 However, whether references to legal instruments
could be read as a preview of the complainant's arguments largely depends on the language of the
panel request and the context in which they are mentioned. In particular, we bear in mind that the
parties' disagreement pertains to the fundamental question of the measures at issue in the dispute.
In this sense, the question before us is different from the one raised in EC – Selected Customs
Matters and relied on b y the United States .113 In that case, the findings relied on by the United
States did not relate to the identification of the measures at issue. 114 Rather, they addressed the
respondent's argument that listing certain areas of application of the measures resul ted in limiting
the matter to only such areas.115
7.47. In our view, the specific legal instruments listed in the panel request do not merely constitute
an anticipation of the United States' arguments, but inform the nature and content of the challenged
measures. This is because, taken together, these legal instruments contain essential elements of
the measures and inform other parties to the dispute of the specific type of domestic support that
the United States challenges. An objective reading of the panel request thus suggests that the United
States' challenge is centred on a single means of domestic support, namely market price support,
for producers of four agricultural products – wheat, Indica rice, Japonica rice and corn.
7.48. Our reading of the panel request fin ds confirmation in the United States' first written
submission, which starts with the following words:
Each year, the People 's Republic of China ( "China") provides a significant level of
domestic support to its agricultural producers through a variety of s ubsidy programs

110 United States' request for the establishment of a panel, p. 6.
111 See Appellate Body Report, EC – Selected Customs Matters, para. 152, fn 369.
112 United States' second written submission, para. 19 (quoting Appellate Body Report, EC – Selected
Customs Matters, para. 153)
113 United States' second written submission, para. 19.
114 Appellate Body Report, EC – Selected Customs Matters, paras. 151-152.
115 Appellate Body Report, EC – Selected Customs Matters, para. 153.

and other measures. This dispute addresses a single means of agricultural support,
"market price support," which China utilizes to support farmer incomes and increase
production for basic agricultural products, including wheat, Indica rice, Japonica rice,
and corn.116
7.49. Later, in the same submission the United States explains that:
This dispute focuses on a single form of agricultural domestic support – market price
support – which China provides to basic agricultural products including wheat, I ndica
rice, Japonica rice, and corn.117
7.50. Similarly to the panel request, while the use of the word "including" in the two paragraphs of
the United States' first written submission cited above might suggest that the United States' claims
could be challenging support provided to other products, the United States uses language that
excludes such an interpretation. In particular, the United States' first written submission reads that:
The United States demonstrates that China has acted inconsistently with its obligations
pursuant to Articles 3.2 and 6.3 of the Agriculture Agreement on the basis of the level
of domestic support provided through China 's market price support measures in favor
of wheat, Indica rice, Japonica rice, and corn, viewed separately or collectively.118
7.51. China's "market price support measures" referred to in the above statement are described in
more detail in three sections of the United States' first written submission, entitled "China's Wheat
Market Price Support Program", "China's Indica Rice and Japonica Rice Market Price Support
Measures" and "China's Corn Market Price Support Measures". The above unambiguous statements
confirm our reading of the panel request as addressing four separate measures, namely domestic
support in the form of market price support for each of wheat, Indica rice, Japonica rice and corn.119
These are thus the measures at issue in this dispute. In the light of this conclusion, the Panel does
not need to address China's alternative arguments relating to the alleged lack of specificity of the
measure at issue, if it was identified as provision by China of domestic support to agricultural
producers.
7.52. The United States is challenging China's measures relating to wheat, Indica rice, Japonica rice
and corn on the basis of evidence provided for years 2012, 2013, 2014 , and 2015. 120 We will,
therefore, conduct our assessment with regard to domestic support provided through market price
support to producers of the relevant products in China.121
7.2.2 China's terms of reference claim raised with regard to the corn measure
7.53. China claims that the corn measure identified in the panel request by the United States
expired prior to the request for the establishment of the Panel, and thus cannot be a measure at
issue in this dispute.122 China maintains that it first announced the termination of the TPRP for corn
in March 2016 and put in place new measures consisting of direct payments to farmers and market-

116 United States' first written submission, para. 1. (footnote omitted) (emphasis added)
117 United States' first written submission, para. 14.
118 United States' first written submission, para. 10.
119 We note that in its submissions subsequent to the first written submission, the United States refers
to a different measure, namely China's domestic support to agricultural producers. However, such references
may have been influenced by China's claim relating to the expiry of the measure relating to corn, raised in
China's first written submission. The Panel thus approaches such references with caution, in line with the
Appellate Body's guidance that a panel may consult "in particular the first written submission of the
complaining party […] in order to confirm the meaning of the words used in the panel request". Appellate Body
120 The data serving as the basis for our assessment can be found in Annex D.
121 China submits that it would be appropriate for the Panel to consider the 2016 data in the assessment
of consistency of China's measures. However, the United States' claims relate to years 2012, 2013, 2014 and
2015, for which the evidence was available at the time of the request for the establishment of a panel. We will
thus limit our assessment to the operation of the measures during these years.
122 China's first written submission, paras. 337-338.

based purchases of corn shortly thereafter.123 China contends that the TPRP for corn was last applied
during the 2015 harvest season and has not been reintroduced since.124
7.54. Relying on the Appellate Body report in EC – Chicken Cuts, China goes on to argue that
Article 6.2 requires that for a measure to fall within the panel's terms of reference, it must exist at
the time of the establishment of the panel. 125 According to China, such a temporal limitation is
consistent with Article 3.7 of the DSU, mentioning withdrawal of the measure concerned as "the first
objective of the [WTO] dispute settlement system."126 China further cites several panel and Appellate
Body reports, with a view to demonstrating that a panel can only exceptionally make findings on a
measure that had expired prior to its establishment and none of these exceptions applies in the case
at hand.127 China also relies on the Appellate Body report in US – Certain EC Products to argue that
a panel cannot make a recommendation on an expired measure.128
7.55. As regards the new measures, allegedly introduced in 2016, China argues that they
substantially differ from the TPRP for corn in several important aspects: (i) the direct payments to
farmers operate in a fundamentally different manner compared to the TPRP for corn; (ii) they
encourage limiting the production of corn; (iii) they do not involve an AAP and do not interfere with
price discovery in the market for corn.129 In particular, the absence of the AAP constitutes, according
to China, an essential difference between the TPRP for corn on the one hand and the subsequently
introduced subsidies for Chinese farmers and purchases of corn, on the other hand.130 China further
points to fluctuations in the corn market price in China following the alleged termination of the TPRP
for corn, as proof that China had ceased to provide market price support to corn farmers.131
7.56. In response to China's claim, the United States primarily argues that the TPRP for corn is not
the measure identified in the panel request and that its alleged expiry does not affect the United
States' case against China. 132 We have already concluded that the United S tates' panel request
identifies four measures, relating to the provision of domestic support in the form of a market price
support to producers of each of wheat, Indica rice, Japonica rice and corn. In light of this conclusion,
we will focus in this section on the arguments concerning the alleged expiry of the measure related
to corn.
7.57. The United States submits that it is for China to demonstrate that the challenged measure
ceased to exist and that China failed to do so. 133 In addition, the United States puts forward a
number of arguments, to support its contention that the measure relating to corn did not expire.
The United States points out that the overarching legal framework authorizing purchases of corn at
administered prices, in particular the 2004 Grain Distribution Regulation and the 2004 Grain Opinion,
continue to exist.134 According to the United States, this general legal framework reflects an intention
by the Chinese Government to protect interests of domestic farmers and provides for an explicit
legal authority to adopt measures relating to market price support for China's agricultural
producers.135
7.58. Further, the United States contends that the documents submitted by China and relating to
China's policy of corn purchases adopted in 2016 "do not state that the TPRP has been terminated
or that China will no longer engage in purchase and temporary storage of corn."136 The United States
argues that China continues to store and auction corn purchased under the 2012, 2013, 2014 and

123 China's first written submission, paras. 290-295; China's comments on the United States' comments
on China's challenge to the Panel's terms of reference, paras. 68-75; China's response to Panel question No. 1.
124 China's first written submission, para. 296.
125 China's first written submission, paras. 324-327; second written submission, paras. 74-77.
126 China's first written submission, para. 328 (quoting Article 3.7 of the DSU).
127 China's first written submission, paras. 330-335.
128 China's second written submission, para. 97.
129 China's first written submission, paras. 298-322.
130 China's comments on the United States' comments on China's challenge to the Panel's terms of
reference, paras. 62-65. China's response to Panel question No. 1.
131 China's second written submission, paras. 127; China's responses to Panel question Nos. 1 and 2.
132 See section 7.2.1 above.
133 United States' second written submission, para. 48.
134 United States' comments on China's challenge to the Panel's terms of reference, paras. 36-37.
135 United States' first written submission, paras. 17-20, second written submission, paras. 42-43;
United States' responses to Panel question Nos. 1, 24, 70.
136 United States' comments on China's challenge to the Panel's terms of reference, paras. 39-41.

2015 TPRP.137 For the United States, this shows that the corn measure continues to be applied. The
United States also points to the similarities between the objectives and structure of the legal
instruments implementing the TPRP policy and the new Chinese measures, as well as the fact that
China continues to purchase corn at quantities similar to those in years prior to the alleged expiry
of the corn measure.138 Additionally, the United States contests the market -based nature of corn
prices in China, as these have remained above the international prices.139
7.59. Moreover, the United States submits evidence allegedly reflecting government -administered
purchase prices, at which the China Grain Reserve Corporation (Sinograin) and Chinatex procured
corn in the Inner Mongolia province in October 2016.140 In the United States' view, Exhibits USA -
101 and USA-104, read in the light of other evidence reflecting Sinograin's substantial role on the
grain market, show that Sinograin, and possibly other Chinese state -owned enterprises, conducted
purchases of corn at administered prices on behalf of the government. 141 The United States points
to the similarity between the corn purchases taking place prior to and after the alleged expiry of the
corn measure. These similarities include the entities in volved, the purchasing and pricing
requirements, policy objectives, announcement and display requirements, lending and storage
requirements.142 According, to the United States, this evidence, considered together, shows that
China has not terminated its provi sion of domestic support in the form of market price support to
corn producers.143
7.60. In reaction to the evidence produced by the United States, China maintains that the prices
listed in Exhibits USA-101 and USA-104 were communicated internally within the structures of the
enterprises, based on market data published by the State Administration of Grain and adjusted in
line with fluctuations of the market price.144 With respect to Sinograin more specifically, China argues
that the company has been given no mandate by the government to purchase corn at government-
determined prices and that other, private actors active on the Chinese corn market issue similar
documents.145 To that end, China submits a number of notices by Sinograin and other grain -
purchasing companies, which, in China's view, show that passing on pricing information by a
company to its local branches is a common business practice.146

137 United States' comments on China's challenge to the Panel's terms of reference, para. 38.
138 United States' comments on China's challenge to the Panel's terms of reference, paras. 42-48;
United States' second written submission, paras. 50-52; United States' response to Panel question No. 2
139 United States' second written submission, para. 54.
140 2016 Sinograin Corn Price Announcement, (Exhibit USA-101/CHN-107B); 2016 Heilongjiang Corn
Purchase Notice, (Exhibit USA-104).
141 United States' comments on China's responses to Panel question Nos. 52 and 56 (second substantive
meeting).
142 United States' response to Panel question No. 55 (second substantive meeting).
143 United States' opening statement at the first meeting of the Panel, paras. 59-62; United States'
response to Panel question No. 52 (second substantive meeting).
144 China's response to Panel question No. 52 (second substantive meeting).
145 China's response to Panel question No. 52 (second substantive meeting).
146 2016 New Corn Purchase Guidance Price Notice, by SinoGrain headquarter, 3 November 2016
(English translation), (Exhibit CHN-111B); 2016 New Corn Purchase Guidance Price Notice, by SinoGrain
headquarter, 15 November 2016 (English translation), (Exhibit CHN-112B); 2016 New Corn Purchase Guidance
Price Notice, by SinoGrain headquarter, 16 November 2016 (English translation), (Exhibit CHN-113B); 2016
New Corn Purchase Guidance Price Notice, by SinoGrain headquarter, 22 November 2016 (English translation),
(Exhibit CHN-114B); 2016 New Corn Purchase Guidance Price Notice, by SinoGrain headquarter, 30 November
2016 (English translation), (Exhibit CHN-115B); 2016 New Corn Purchase Guidance Price Notice, by SinoGrain
headquarter, 7 December 2016 (English translation), (Exhibit CHN-116B); 2016 New Corn Purchase Guidance
Price Notice, by SinoGrain headquarter, 14 December 2016 (English translation), (Exhibit CHN-117B); 2016
New Corn Purchase Guidance Price Notice, by SinoGrain headquarter, 21 December 2016 (English translation),
(Exhibit CHN-118B); 2016 New Corn Purchase Guidance Price Notice, by SinoGrain headquarter, 28 December
2016 (English translation), (Exhibit 119B); 2016 New Corn Purchase Guidance Price Notice, by SinoGrain Inner
Mongolia branch, 16 November 2016 (English translation), (Exhibit CHN-120B); 2016 New Corn Purchase
Guidance Price Notice, by SinoGrain Inner Mongolia branch, 22 November 2016 (English translation), (Exhibit
CHN-121B); 2016 New Corn Purchase Guidance Price Notice, by SinoGrain Inner Mongolia branch, 30
November 2016 (English translation), (Exhibit CHN-122B); 2016 New Corn Purchase Guidance Price Notice, by
SinoGrain Heilongjiang branch, 7 December 2016 (English translation), (Exhibit CHN-123B); 2016 New Corn
Purchase Guidance Price Notice, by SinoGrain Heilongjiang branch, 14 December 2016 (English translation),
(Exhibit CHN-124B); 2016 New Corn Purchase Guidance Price Notice, by SinoGrain Heilongjiang branch, 21
December 2016 (English translation), (Exhibit CHN-125B); 2016 New Corn Purchase Guidance Price Notice, by
SinoGrain Heilongjiang branch, 29 December 2016 (English translation), (Exhibit CHN-126B); 2016 New Corn

7.61. Additionally, the United States argues that China's claim regarding the expiry of the corn
measure overlooks the context of a dispute involving calculation of the AMS. This is because an
assessment of Members' compliance with domestic support commitments involves a retrospective
examination of the levels of support. 147 According to the United States, a panel considering such
claims should focus its assessment on the operation of the measures during the period for which the
measures were challenged and for which the relevant data is available.148 Otherwise a dispute over
domestic support would turn into a constantly moving target, wh ere a panel would need to update
its assessment with the most recent numbers becoming available.149 The United States relies in that
regard on the report in Korea – Various Measures on Beef, in which the panel and the Appellate Body
addressed domestic support provided prior to the establishment of the panel. 150 In a similar vein,
the United States relies on the Appellate Body report in China – Raw Materials to argue that a panel
should make findings on a recurring measure evidenced in annual legal instruments t hat may have
ceased to exist prior to the establishment of a panel.151
7.62. Finally, the United States submits that, in any event, the alleged expiry of the corn measure
should not prevent the panel from making findings and recommendations with regard to that
measure. This is because the measure has been identified in the panel request and, as such, forms
part of the matter referred to the Panel by the DSB for adjudication.152 All the more so, as domestic
support claims are necessarily based on historical data and findings with regard to such information
are necessary in order to fulfil the objective of securing a positive solution to a dispute, as enshrined
in Article 3.7 of the DSU.153
7.63. In their arguments, the parties raise two distinct, albeit related, issues. First, the parties
disagree on the factual question of whether the corn measure expired in 2016, as claimed by China.
Second, they have different views on whether the Panel should make findings and recommendations
with regard to a measure that has ceased to exist. We will, therefore, start by addressing the factual
question relating to the alleged expiry of the corn measure. Should we find that the measure did
indeed expire, we will then determine whether to make findings and, eventually, a recommendation
on that measure.
7.2.2.1 Whether the corn measure has expired
7.64. Both parties have submitted extensive facts and arguments relating to the alleged expiry of
the corn measure. Under these circumstances, our task will essentially be to balance all evidence on
record and decide whether the said measure has expired, as claimed by China, recalling that the
original burden of establishing inconsistency of a measure rests on the United States.154 In particular,
we will compare China's new corn policy with the challenged corn measure to determine whether
they have the same essence and, by implication, whether we can address the new measure in our
findings.
7.65. Our review of the record evidence suppor ts China's assertion that it reformed its corn policy
by terminating the provision of market price support to corn producers following the 2015 corn
harvest and replacing it with direct payments and purchases that do not involve an AAP. The reform

Purchase Guidance Price Notice, by SinoGrain headquarter, 26 October 2016 (English translation), (Exhibit
CHN-127B); Corn Purchase Price of Cargill Biochemical Limited, 12 December 2016 (English translation),
(Exhibit CHN-128B); Corn Purchase Price of Cargill Biochemical Limited, 14 December 2016 (English
translation), (Exhibit CHN-129B); Corn Purchase Price of Cargill Biochemical Limited, 19 December 2016
(English translation), (Exhibit CHN-130B); Corn Purchase Price of Cargill Biochemical Limited, 20 December
2016 (English translation), (Exhibit CHN-131B).
147 United States' comments on China's challenge to the Panel's terms of reference, paras. 17-29;
United States' second written submission, paras. 30-32; United States' responses to Panel questions Nos. 4, 5
and 7.
148 United States' second written submission, para. 31.
149 United States' response to Panel question No. 10.
150 United States' second written submission, para. 33; United States' response to Panel question No. 4.
151 United States' second written submission, paras. 39-45; United States' response to Panel question
No. 4.
152 United States' responses to Panel question Nos. 5 and 11.
153 United States' response to Panel question No. 11.
154 Panel Report, US – Section 301 Trade Act, para. 7.14.

was announced in the 2016 No. 1 Document setting forth the priorities for China's agricultural policy
in 2016. According to this document, the reform of support for corn farmers would follow:
[T]he principle of letting the market determine prices and delinking subsidies from
prices, reform in an active yet prudent way the system of corn purchase and storage;
while allowing corn prices to reflect the relationship between market supply and
demand, comprehensively take into account factors including adequate income s for
farmers, fiscal carrying capacity, and the coordinated development of the industry
supply chain, and establish a corn producer subsidy system.155
7.66. A press release dated 28 March 2016 further reports that the corn procurement and reserve
system would be reformed in that the "price [would be] formed by the market and decoupling of
price and subsidy."156 China's Ministry of Finance Opinions on Establishing the Subsidy System for
Corn Producers, a document which was adopted "following the requirements" of the 2016 No. 1
Document, also refers to the reform of the corn purchase and reserve system, according to which it
is for "the market to form the corn price."157
7.67. We further note that a 2016 notice on implementing the corn policy in the Heilongjiang
province states expressly that the "temporary purchase and reserve system has been removed, and
the new mechanism of 'market -oriented purchase' plus 'direct subsidy' is established". 158 The
departure from corn procurement based on AAP is also reflected in a document from the Chinese
Ministry of Finance, dated 20 May 2016.159
7.68. The United States Department of Agriculture (USDA) GAIN Reports also provide evidence of
a fundamental change in China's policy of supporting corn producers. The documents, which do not
necessarily reflect the position of the United States Government, state that in 2016, China's
"government announced an end to the floor price for corn"160 and that "China removed price support
for corn producers". 161 They also summarize the new forms of support measures, which replaced
the market price support for corn.162 While it is true that one of the GAIN reports, dated April 2016,
expressed some uncertainty about how the reform would unfold163, none of the documents question
China's efforts to move away from AAP-based purchases of corn. In particular, and contrary to the
United States' assertion, the April 2017 GAIN Report does not seem to suggest a "significant
uncertainty regarding China's continued provision of corn support prices".164 The document refers to
interventions by local, provincial , and central government s to compensate for, among others,
"support prices".165 We do not read this language as implying that purchases at minimum prices
continued. To the contrary, the document seems to be referring to the difficulties in the agricultural

155 Communist Party of China Central Committee and State Council Several Opinions on Strengthening
Reform and Innovation and Accelerating Agricultural Modernization (Communist Party of China Central
Committee, State Council, Zhong Fa [2015] No. 1, issued February 1, 2015), (Exhibit USA-91), p. 15.
156 The State Council, News Report "Corn Temporary Purchase and Reserve System will be Shifted to a
'Market-oriented Purchase' and 'Direct Subsidies'", available at: http://www.gov.cn/xinwen/2016-
03/28/content_5059171.htm (last viewed 26 October 2017) (English translation), (Exhibit CHN-74B), p. 1.
157 Ministry of Finance Opinions on Establishing the Subsidy System for Corn Producers (Cai Jian [2016]
No. 278), 20 May 2016 (English translation), (Exhibit CHN-73B), p. 3.
158 2016 Heilongjiang Corn Purchase and Sale Work Notice, (Exhibit CHN-86B), p. 1.
159 The document refers to the same "Price formed by market and decoupling of price and subsidy" and
states that "it is required to actively and steadily pursue the corn purchase and reserve system reform, and let
the market to form the corn price." Notice on Issuing the Implementation Plan for the Establishment of Subsidy
System for Corn Producers in Liaoning Province (Liao Cai Liu [2016] No.476), 1 August 2016 (English
translation), (Exhibit CHN-79), p. 3. The Panel does not understand the term "decoupling" used in the
document to connote the concept of decoupling within the meaning of Annex 2 of the Agreement on
Agriculture.
160 USDA, Foreign Agricultural Service, "China's Decision to End Corn Floor Price Shakes Grain and Feed
Market", China Grain and Feed Update, GAIN Report Number: CH16027, 8 April 2016, (Exhibit CHN-83), p. 1.
161 April 2017 USDA GAIN Report, (Exhibit CHN-84), p. 1.
162 United States Department of Agriculture, Foreign Agricultural Service, "Everything Must Go, State
Corn Reserves Begin Liquidation", China Grain and Feed Update GAIN Report Number: CH16058, 12 November
2016, (Exhibit CHN-75), pp. 4-5.
163 See United States' response to Panel question No. 60 (second substantive meeting).
164 See United States' response to Panel question No. 60 (second substantive meeting).
165 April 2017 USDA GAIN Report, (Exhibit CHN-84), p. 2.

sector resulting from the elimination of the market price support for corn. 166 We conclude on this
basis that the GAIN Reports corroborate the evidence submitted by China.
7.69. This is not to say that state-owned and private entities ceased to buy corn under the guidance
of Chinese authorities.167 In fact, the data available to the Panel shows that corn purchases reached
significant levels in 2016 and 2017.168 Fundamentally, however, the evidence reviewed by the Panel
indicates that such purchases were not made at an AAP.169 The 2016 Notice on Proper Handling of
Corn Purchase Work in Northeast China This Year, which sets forth the objectives and modalities of
the new corn policy , refers to the market nature of corn purchases.170 This document encourages
both state and private actors to engage in corn purchases at the prevailing prices.171
7.70. It is true that many of the above -referenced documents do not expressly mention the
"termination" of China's provision of marke t price support to corn producers. 172 However, the
covered agreements do not contain a requirement that measures be expressly terminated for them
to be deemed to have expired. We note in this regard that prior adjudicators emphasi zed the
importance of making such a determination by looking at "the content and substance of the
instrument" to consider whether it constitutes a measure "and not merely […] its form or
nomenclature."173 In our view, s imilar logic applies to claims concerning expiry of a measure –
instead of assessing whether the underlying legal instruments were formally terminated, a panel has
to examine whether the challenged measure still affects the operation of the covered agreements.
In any event, the content of the official documents put on the record by the parties reflects efforts
of the Chinese authorities to modify the corn purchase policy, so as to abolish the AAP.
7.71. Regarding the structure and content of the documents relating to the new corn measure, we
note that they resemble, in some aspects, the annual TPRP Notices issued in years 2012-2015, i.e.
under the old corn policy. In particular, the 2016 Corn Notice is addressed to a similar set of entities,
including the local authorities of the major corn producing provinces, the Agricultural Development
Bank of China (ADBC) and its local branches, Sinograin, COFCO, Chinatex and Aviation Industry
Corporation of China.174 Similarly to the TPRP Notices, the document requires the relevant entities
to secure appropriate financing and storage space for corn purchases.175 Fundamentally, however,
unlike the TPRP Notices, the 2016 Corn Notice refers to the reform of China's corn purchase and
reserve system, based on "market -oriented purchase" and the fact that "the price of corn will be

166 The document states, among others, that "In 2016, China removed price support for corn producers"
and that "China's corn producers struggle to respond to the elimination of the temporary reserve program."
April 2017 USDA GAIN Report, (Exhibit CHN-84), pp. 1 and 19.
167 The 2016 Corn Notice requires the relevant regions "to take effective measures and coordinate and
organize the branches of central and major local grain enterprises within the areas to actively purchase the
corn, encourage and guide the multiple market players to enter the market". The Panel understands that
among the main enterprises that should "carry out the market-oriented purchase" were Sinograin, COFCO and
Aviation Industry Corporation of China. 2016 Corn Notice, (Exhibit USA-87/CHN-80B), pp. 1-2.
168 For instance, in the Jilin province 31.4 billion jin of corn had been purchased up until spring 2017.
2017 Jilin Corn Notice, (Exhibit USA-102), p.1.
169 The Notice of Further Proper Handling of Corn Purchase and Sales Work refers to such purchases
being made at market prices, which had been decreasing immediately prior to the release of the document.
2017 Jilin Corn Notice, (Exhibit USA-102), p.1.
170 2016 Corn Notice, (Exhibit USA-87/CHN-80B). The Panel is not assessing the extent to which market
mechanisms determine corn prices prevailing in China, but rather notes that Chinese authorities did not set an
AAP for corn.
171 In the relevant part, the document reads that "Associated central enterprises […] shall make full use
of their own advantages and channels to carry out the market-oriented purchase, work harder to ensure the
purchase volume no less than that of the policy-based purchase last year and play a leading role." 2016 Corn
Notice, (Exhibit USA-87/CHN-80B), p. 2.
172 We recall, however, that the 2016 notice on implementing the corn policy in the Heilongjiang
province states expressly that the "temporary purchase and reserve system has been removed". 2016
Heilongjiang Corn Purchase and Sale Work Notice, (Exhibit CHN-86B), p. 1.
173 Panel Report, EC – IT Products, para. 7.1167; and Appellate Body Report, US – Corrosion-Resistant
Steel Sunset Review, fn 87.
174 2016 Corn Notice, (Exhibit USA-87/CHN-80B), p. 1; 2012 TPRP Notice, (Exhibit USA-52/CHN-69B),
p. 1; 2013 TPRP Notice, (Exhibit USA-53/CHN-70B), p. 1; 2014 TPRP Notice, (Exhibit USA-54/CHN-71B), p. 1;
and 2015 TPRP Notice, (Exhibit USA-55/CHN-72B), p.1.
175 2016 Corn Notice, (Exhibit USA-87/CHN-80B), pp. 2-3; 2012 TPRP Notice, (Exhibit USA-52/CHN-
69B), pp. 2-3; 2013 TPRP Notice, (Exhibit USA-53/CHN-70B), pp. 2-5; 2014 TPRP Notice, (Exhibit USA-
54/CHN-71B), pp. 4-6; 2015 TPRP Notice, (Exhibit USA-55/CHN-72B), pp. 2-7.

formed by the market and reflects the supply and demand relation in the market". 176 In a similar
vein, other official documents state that "the corn price will be formed by the market" or that "corn
prices are based on the market".177 The relevant documents do not mention thus any price imposed
by the central or local governments. This is in stark contrast to the content of the legal instruments
implementing China's policy of supporting corn price during the years 2012 -2015, which invoke
"stabilizing market prices" and set forth in detail the AAP.178
7.72. In that connection, the United States argues that China does not publish the AAP and, as a
result of this lack of transparency, the United States is not in a position to identify it.179 At the same
time, the United States submits two documents, one issued by Sinograin and the other one by
Chinatex, which, in the United States' view, reveal the AAP and, read together with other evidence180,
constitute proof of China's continuing provision of market price support to corn farmers.181
7.73. Looking at the content of these documents, we note that the Notice on Activating 2016
Autumn Grains Corn Purchase Work directs all affiliated depots of the Inner Mongolia branch of
Sinograin to purchase corn offered for sale by farmers. The document states that "in order to better
serve grain-selling farmers and to safeguard the smooth execution of 2016 autumn grains corn
purchase work" the depots will advertise and "activate autumn grains corn purchases". 182 The
document further lists different purchase prices, ranging from 0.65 to 0.71 yuan per jin, depending
on the region.183 Similar information can be found in an analogous notice issued by the Heilongjiang
branch of Chinatex.184
7.74. We note that the prices listed in the two documents submitted by the United States broadly
correspond to the level of prices issued by other players on the corn market in China, such as Cargill,
Jilin Boda Biochemical and Liaoning Yihai Kerry Starch Factory.185 They also seem to be in line with
or slightly lower than the average prices prevailing during the relevant time -period and in the
relevant provinces, submitted by China in response to a question from the Panel. 186 Because the
prices mentioned in the two documents do not differ significantly from the prices used by other
market players and the average prices prevailing in the relevant Chinese provinces, these
documents, read in the light of other record evidence, do not allow a conclusion that the figures
listed therein constitute government-administered prices.
7.75. As regards the average corn prices provided by China, t he United States contests their
reliability, arguing that China's exhibits do not identify the sources of the data nor which entities
provided the data, and that the documents contained very limited amounts of information, were not
available online or to the public and did not contain any official seal, letterhead or other marking
reflecting their status or nature. 187 The United States also explains that it was unable to provide
such information due to China's lack of transparency.188 Yet, we note that certain publicly available

176 2016 Corn Notice, (Exhibit USA-87/CHN-80B), p. 1.
177 2016 Heilongjiang Corn Purchase and Sale Work Notice, (Exhibit CHN-86B), p. 1; National
Development and Reform Commission, News Release, "The Reform of the Corn Purchase and Reserve System
Achieved Remarkable Effect", 23 June 2016 (English translation), (Exhibit CHN-87), p. 1.
178 "In order to conscientiously protect the interest of farmers, stabilize market prices and promote
stable development of grain production, the State will implement national temporary reserve purchase of
corn". 2012 TPRP Notice, (Exhibit USA-52/CHN-69B), p. 1. See also 2013 TPRP Notice, (Exhibit USA-53/CHN-
70B), p. 1; 2014 TPRP Notice, (Exhibit USA-54/CHN-71B), p. 1; and 2015 TPRP Notice, (Exhibit USA-55/CHN-
72B), p.1.
179 United States' responses to Panel questions Nos. 2 and 3.
180 United States' response to Panel question No. 52 (second substantive meeting).
181 United States' opening statement at the second meeting of the Panel, paras. 59-62; United States'
response to Panel question No. 52 (second substantive meeting); United States' comments on China's
response to Panel question No. 52 (second substantive meeting).
182 2016 Sinograin Corn Price Announcement, (Exhibit USA-101/CHN-107B), p. 1.
183 2016 Sinograin Corn Price Announcement, (Exhibit USA-101 CHN-107B), p. 1.
184 2016 Heilongjiang Corn Purchase Notice, (Exhibit USA-104), p. 1.
185 The prices differ based on the origin (province and region), quality grade and moisture level. Corn
Purchase Price of Cargill Biochemical Limited, 12 December 2016, (Exhibit CHN-128B), p.1; Purchase
Information of Jilin Boda Biochemical Limited, 13 December 2016 (English translation and original), (Exhibit
CHN-133), p. 1; Yihai Kerry Starch, "Liaoning Yihai Kerry Starch Factory Will Lower the New Corn Purchase
Price by 20 yuan/ton at 11 a.m., October 29", 29 October 2017 (English translation), (Exhibit CHN-134), p. 1.
186 China's response to Panel question No. 53 (second substantive meeting).
187 United States' comments on China's responses to Panel question Nos. 52 and 53.
188 United States' response to Panel question No. 53 (second substantive meeting).

documents contain corn spot prices for the relevant period of time , even if it is not a complete
average monthly data for particular provinces. For example, the November 2016 GAIN Report by
the USDA states that "30-day average spot prices in early December 2016 are at 1,681 RMB per
ton".189 This document shows not only that foreign actors have access to pricing data in China, but
also that the prices specified in Exhibit USA -101 generally correspond to corn prices prevailing in
the major corn-producing provinces.
7.76. Turning to the corn price itself, the record evidence shows a significant price drop coinciding
with the alleged expiry of the measure relating to corn.190 As demonstrated in Figures 1 and 2, one
submitted by China and the other by the United States, the average price of corn significantly
decreased in China in early 2016 and then fluctuated between 65 and 82 yuan per jin, depending
on the province.
Figure 1: Corn prices, January 2012 – February 2018

 Source: China's second written submission, Figure 1.

Figure 2: Corn prices, 2012 – 2017

 Source: Corn Prices 2012-2017, (Exhibit USA-94).

7.77. In the Panel's view, the significant drop in corn price following the harvest period of the 2015
corn, as shown in Fig ure 2, would support the view that past that period, central or local
governments, or other entities affiliated with the government, no longer set the AAP for corn in the

189 United States Department of Agriculture, Foreign Agricultural Service, "Everything Must Go, State
Corn Reserves Begin Liquidation", China Grain and Feed Update GAIN Report Number: CH16058, 12 November
2016, (Exhibit CHN-75), p. 11. We note that the United States refers to the price information provided in the
GAIN reports in its second written submission, para. 54.
190 China's second written submission, paras. 132-133; China's response to Panel question No. 2; Corn
Prices 2012-2017, (Exhibit USA-94), p.1.

major corn-producing Chinese provinces. If such a practice had been maintained, one w ould have
expected the price of corn not to fall so significantly.
7.78. According to the United States, higher domestic corn prices, compared to international prices,
indicate that "the lack of an applied administered price communicated to private market actors and
farmers does not mean that the domestic price is market -based, or that the purchases made by
state-owned enterprises were not done at support prices." 191 We recall, however, that this dispute
is not about the price of corn in China being free from any type of government intervention, or higher
than international prices. As the United States notes in its first written submission, this dispute
focuses on a single form of domestic support, namely market price support. 192 Where a measure
takes the form of a market price support, the AAP is a constituent element of that measure.193 Many
factors other than a government setting specific prices can influence a product price in a specific
market, including customs tariffs, quantitative restrictions, as well as other non-tariff measures and
other factors.194 Therefore, showing a difference between domestic and international prices is, in
light of the claims raised by the United States in this case, not enough to conclude that China
continued to purchase corn at an AAP.
7.79. Turning to the United States' argument that China continues to store and auction corn
purchased as part of the 2012, 2013, 2014 and 2015 TPRP, we fail to see the relation between these
activities and the alleged violations of Articles 3.2 and 6.3 of the Agreement on Agriculture. 195 The
United States' claims under these provisions relate to China providing domestic support in the form
of market price support to producers of corn. In light of Paragraph 8 of Annex 3 to the Agreement
on Agriculture, this specific form of domestic support consists of purchases of agricultural products
at an AAP. This provision does not seem to attach any legal relevance to auctioning and storing of
previously purchased corn. Indeed, the last sentence of Paragraph 8 expressly excludes from its
scope payments relating to, among others, buying in or storage of agricultural products.
7.80. Therefore, based on the totality of evidence before the Panel, we conclude that the reform of
China's corn policy removed an essential element of the challenged corn measure, the AAP. To us,
this reform thus marks the expiry of China's domestic support provided to the producers of corn in
years 2012 through 2015 in t he form of market price support. We base our conclusion on the
documentary evidence, which reflect s China's departure from the market price support policy
through purchases of corn at an AAP, as well as record evidence of corn prices prevailing in China.
In particular, the balance of the evidence does not support the United States' contention that China
continued to purchase corn at an AAP following the expiry of the 2015 TPRP Notice and the
announcement of the new corn policy. As a result, we find that the measure relating to corn expired
prior to the initiation of the dispute by the United States, including its request for consultations and
the request for the establishment of a panel.
7.2.2.2 Whether the Panel should make findings on the otherwise expired corn measure
7.81. Having concluded that the measure relating to corn expired, we will now address China's
assertion that, due to its termination, the measure falls outside the Panel's terms of reference and
the Panel should not make findings and issue recommendations with regard to that measure.
7.82. Pursuant to Article 7.1 of the DSU, a panel has to examine, in the light of the relevant
provisions of the covered agreements cited by the parties to the dispute, the matter referred to it
by the complainant. This matter consists of the claims and the specific measures at issue identified
in a panel request.196 It is the same matter that a panel "should make an objective assessment of"
pursuant to Article 11 of the DSU. In EU – PET (Pakistan), the Appellate Body explained that in the
exercise of its inherent adjudicative powers, a panel has the authority "to assess objectively whether

191 United States' second written submission, para. 54.
192 United States' first written submission, para. 14.
194 Indeed, the continued efforts by Chinese state and private actors to purchase corn, as well as other
measures that China may have in place, may have resulted in corn prices in China being higher than
international prices. Both parties produced documents reflecting these efforts. See paras 7.68, 7.69 and 7.71
above.
195 United States' comments on China's challenge to the Panel's terms of reference, para. 38; United
States' response to Panel question No. 8.
196 Appellate Body Report, Guatemala – Cement I, para. 72.

the 'matter' before it, within the meaning of Article 7.1 and Article 11 of the DSU, has been fully
resolved or still requires to be examined follo wing the expiry of the measure at issue ".197 China
argues that this rationale does not apply in the case at hand, because the measure falls outside the
Panel's jurisdiction as a result of its expiry prior to the request for the establishment of a panel. 198
We disagree. The distinction between measures that expired prior to the establishment of a panel
and those that expired after that date is a factor relevant for a panel's decision whether to rule on
an expired measure or not. It does not, however, determine the jurisdiction of a panel with regard
to that measure.199 We find further contextual support for the proposition that measures that expired
prior to the establishment of a panel are not a priori excluded from the scope of the term "measures
at issue" in Art icle 3.3 of the DSU, which refers to "measures taken" and not, for example, to
measures in force.200
7.83. For similar reasons, we also find unconvincing China's reliance on the Appellate Body report
in EC – Chicken Cuts as support for the proposition that panels are precluded from ruling on
measures that did not exist at the time when the establishment of a panel was requested.201 In that
case, the Appellate Body addressed subsequent measures not mentioned in the panel request, which
amended the original measures. 202 In this case however, the measure relating to market price
support for corn was identified in the United States' panel request. 203 Therefore, the due process
considerations that underpinned the Appellate Body findings in EC – Chicken Cuts do not arise in the
case at hand. In addition, China's reading of the report in EC – Chicken Cuts would be inconsistent
with the Appellate Body ruling that whether or not a measure is still in force "is not , however,
dispositive of the preliminary questio n whether a panel can address claims in respect of that
measure."204
7.84. China also submits that the expiry of the measure relating to corn achieves the first objective
of WTO dispute settlement, i.e. securing a positive resolution to the dispute, and ruling on such
measure would be but an advisory opinion of the Panel.205 We thus move on to assess whether the
expiry of the market price support measure relating to corn has fully resolved the dispute between
the parties with regard to that measure, or whether it still requires examination.
7.85. Article 3.7 of the DSU sets as the aim of the dispute settlement mechanism "securing a
positive resolution to the dispute". The same provision also states that: "[i]n the absence of a
mutually agreed solution, the first objective of the dispute settlement mechanism is usually to secure
the withdrawal of the measures concerned if these are found to be inconsistent with the provisions
of any of the covered agreements." We note in that regard that neither panels nor the Appellate
Body should "'make law' by clarifying existing provisions of the WTO Agreement outside the context
of resolving a particular dispute."206 Guided by Article 3.7 of the DSU, prior panels looked at specific
circumstances of a given case to determine whether it was appropriate to address claims relating to
expired measures.207 These circumstances included, among others, the timing of the expiry of a
measure208, whether a measure is included in the terms of reference 209, the possibility of

197 Appellate Body Report, EU – PET (Pakistan), para. 5.19.
198 China's comments on United States' response to Panel question No. 70 (second substantive
meeting), fn 167 (citing Appellate Body Report, EU – PET (Pakistan), para. 5.38).
199 As noted by the Appellate Body, "the DSU nowhere provides that the jurisdiction of a panel
terminates or is limited by the expiry of the measure at issue". Appellate Body Report, EC – Bananas III
(Article 21.5 – Ecuador II)/EC – Bananas III (Article 21.5 – US), para. 270; See also Panel Reports, EC –
Approval and Marketing of Biotech Products, para. 7.1650; and Chile – Price Band System para. 7.514, fn 683.
200 See Appellate Body Report, EU – Fatty Alcohols (Indonesia), para. 5.182.
201 China's first written submission, paras. 324-327; second written submission, paras. 74-77, citing the
Appellate Body Report, EC – Chicken Cuts, para. 156.
202 Appellate Body Report, EC – Chicken Cuts, para. 151; Panel Report, EC – Chicken Cuts, para. 7.25.
203 See section 7.2.1 above.
204 Appellate Body Report, US – Upland Cotton, para. 272.
205 China's response to Panel question No. 22.
206 Appellate Body Report, US – Wool Shirts and Blouses, p. 19.
207 Panel Report, China – Electronic Payment Services, para. 7.224.
208 Panel Report, EU – PET (Pakistan), para. 7.13 and fn 35.
209 Panel Reports, Turkey – Rice, para. 7.180; US – Wool Shirts and Blouses, para. 6.2; and Indonesia –
Autos, para. 14.9.

reintroducing a measure210, whether the effects of a measure continued to impair the benefits for a
Member under a covered agreement.211
7.86. We should read the dispute settlement system's objective of "securing a positive resolution
to the dispute" in light of other provisions of the DSU. In that c onnection, we agree with the panel
in EC – Bananas III (Article 21.5 – United States) that a particular solution to a WTO dispute "can
lead to a positive resolution of a dispute only if the solution provides an overall satisfactory and
effective settlement to the dispute in question in the sense of Article 3.4 of the DSU."212 In addition,
we note that Article 4.2 of the DSU, governing DSU consultations, refers to measures "affecting the
operation of any covered agreement". Therefore, in considering whether to rule on an expired
measure, we need to examine whether that measure affects the operation of the covered
agreements, despite its termination.213
7.87. Turning to the facts of this case, we note that the measure relating to corn expired prior to
the United States' request for the establishment of a panel and the United States' request for
consultations.214 In the absence of circumstances weighing in favour of making findings, past panels
declined to address measures that had expired before the complainant requested the establishment
of a panel.215
7.88. As regards the risk of reintroducing the market price support for corn, the United States
contends that "there is no impediment to China continuing to maintain a market price support […]
program for corn".216 However, apart from mentioning the general authority to provide market price
support to grain producers, the United States does not point to any evidence supporting this
contention. China, on the other hand, refers to official statements underscoring the need to move
away from the TPRP for corn and, by implication, limiting the probability of its reintroduction.217 We
consider, therefore, that there is no compelling evidence showing that the market price support for
corn might be reintroduced.218
7.89. We now turn to the United States' argument that the Panel should rule on the measure relating
to corn, due to the retrospective nature of a panel's analysis under Articles 3.2 and 6.3 of the
Agreement on Agriculture. The United States points out that "a breach of a domestic support
commitment must include the presentation of evidence comparing the product -specific AMS for a
basic agricultural product to the total value of production for that agricultural product in a given
year".219 We agree with the United States that demonstrating a violation of a domestic support
commitment requires presenting evidence, which would typically consist of historical data. However,
one has to draw a distinction between measures and evidence produced in support of a claim of
inconsistency. The evidence reflects the operation of the measures within a given time -period. It
does not, however, necessarily suggest that the matter remains unsolved despite expiry of a
measure and the panel needs to rule on that measure. It follows that the fact that a panel may need
to look at historical evidence, does not imply, without more, that it must rule on measures that have

210 Panel Reports, India – Additional Import Duties, paras. 7.69-7.70; Argentina – Textiles and Apparel,
212 Panel Report, EC – Bananas III (Article 21.5 – United States), para. 7.105.
213 Appellate Body Report, US – Upland Cotton, paras. 261-262.
214 As noted in section 7.2.2.1 above, the measure relating to provision of domestic support in form of
market price support for producers of corn expired following the last day of application of the 2015 TPRP
notice, i.e. on 1 May 2016. The United States requested consultations with China on 13 September 2016 and
filed a request for the establishment of a panel on 5 December 2016.
215 Panel Reports, US – Gasoline, para. 6.19; Argentina – Textiles and Apparel, paras. 6.4 and 6.13; EC
– Approval and Marketing of Biotech Products, para. 7.1653; China – Electronic Payment Services, para.
216 United States' response to Panel question No. 1. The United States argues that the market price
support for corn was adopted on a temporary or ad hoc basis and no new regulation could limit that possibility.
The United States also points out that Article 27 of the 2004 Grain Distribution Regulation authorizes the
implementation of a market price support for corn.
217 China's comments on the United States' comments on China's challenge to the Panel's terms of
reference, para. 70; China's response to Panel question No. 1.
218 We find support for our conclusion in Argentina – Textiles and Apparel, where the panel found that
"in the absence of clear evidence to the contrary" it could not assume that Argentina would reintroduce the
terminated measure. Panel Report, Argentina – Textiles and Apparel, para. 6.14.
219 United States' comments on China's challenge to the Panel's terms of reference, para. 24.

expired.220 We note in that regard that the panel in Korea – Various Measures on Beef, while looking
at evidence dating from before the establishment of the panel, ruled on a measure which had been
identified as Korea's " current domestic support for its beef industry in the context of Korea's
scheduled commitment levels of domestic support".221
7.90. In a similar vein, we are not persuaded by the United States' reliance on the panel and
Appellate Body reports in China – Raw Materials. In that case, the Appellate Body found that the
expiry of annually renewed legal instruments did not affect the panel's power to make findings and
recommendations, because they formed part of a group or a series of measures, comprised of basic
framework legislation and implementing regulations.222 Similarly, China's policy of providing market
price support to producers of corn was also reflected in the general legal framework, includin g the
2004 Grain Distribution Regulation, the 2004 Grain Opinion and No. 1 Documents and the TPRP
Notices, taken together.223 However, unlike in China – Raw Materials, it is not the expiry of the 2015
TPRP Notice alone, but rather the policy of providing mar ket price support for producers of corn,
implemented through TPRP Notices, that marks the expiry of the corn measure.224
7.91. Finally, as noted above, the price of corn fell sharply in China following the decision to
discontinue the market price support for corn, and have fluctuated ever since. 225 To us, this is an
indication that upon its expiry, the measure relating to corn ceased to produce effects on the market
that could impact the operation of the provisions of the Agreement on Agriculture invoked by the
United States. This is not to say that China does not have in place other measures that could affect
the operation of the same provisions of the Agreement on Agriculture. We recall, however, that
these measures have not been challenged by the United States in this dispute and the Panel has no
mandate to address them. This applies, in particular, to the new corn policy, which has a different
essence compared to the corn measure challenged by the United States. In sum, we do not see how
the measure relating to corn, despite its expiry, could continue to affect the operation of Articles 3.2
and 6.3 of the Agreement on Agriculture, as argued by the United States.
7.92. In light of the above, and given the Panel's jurisdiction over the corn measure, we consider
that the essential element of that measure – the AAP – has been removed, as the government no
longer sets the purchase price in this way. The challenged corn measure has thus expired. Having
analysed considerations that could potentially weigh in favour of making findings with regard to the

220 The Appellate Body has recognized a distinction between measures and evidence presented to
substantiate of a claim in the context of temporal limitations. See Appellate Body Reports, EC – Selected
Customs Matters, para. 188; and US – Large Civil Aircraft (2nd Complaint), paras. 7.685-7.686.
221 Panel Report, Korea – Various Measures on Beef, paras. 800, 845 (i) and (j). (emphasis added)
222 Appellate Body Report, China – Raw Materials, para. 264.
223 See paras. 7.94-7.95 below. The Panel notes that the 2004 Grain Opinion and the 2004 Grain
Distribution Regulation instruct the relevant Chinese authorities to "implement minimum purchase prices in the
main grain producing regions", while Article 2 of the 2004 Grain Distribution Regulation defines grain as,
among others, "wheat, rice, corn". See 2004 Grain Opinion, (Exhibit USA-10/CHN-10B), p. 2; Articles 2, 24
and 26-27, 2004 Grain Distribution Regulation, (Exhibit USA-12/CHN-9B), pp. 1 and 5. As regards the 2012-
2015 No. 1 Documents, the Panel notes that they contained, among its numerous objectives "initiat[ing]
temporary purchasing and storage for [products including] corn". See Communist Party of China Central
Committee and State Council Several Opinions on Accelerating the Promotion of Agricultural Science and
Technology Innovation and Continuing to Strengthen the Capacity to Guarantee Agricultural Product Supplies
(Communist Party of China Central Committee, State Council, Zhong Fa [2012] No. 1, issued December 31,
2011), (Exhibit USA-13), p. 14; Communist Party of China Central Committee and State Council Several
Opinions on Accelerating Development of Modern Agriculture and Further Increasing Rural Development
Dynamism (Communist Party of China Central Committee, State Council, Zhong Fa [2013] No. 1, issued
December 31, 2012), (Exhibit USA-14), p. 4; Communist Party of China Central Committee and State Council
Publication of "Several Opinions on Comprehensively Deepening Rural Reform and Accelerating the Promotion
of Agricultural Modernization" (Communist Party of China Central Committee, State Council, Zhong Fa [2014]
No. 1, issued January 19, 2014), (Exhibit USA-15), p. 3; Communist Party of China Central Committee and
State Council Several Opinions on Strengthening Reform and Innovation and Accelerating Agricultural
Modernization (Communist Party of China Central Committee, State Council, Zhong Fa [2015] No. 1, issued
February 1, 2015), (Exhibit USA-16), p. 7.
224 In a response to a question from the Panel, the United States noted that while support to agricultural
producers, such as market price support, is typically provided on a yearly basis, "it would be accurate to
characterize the measures challenged by the United States as continuing policies applied through annual legal
instruments." United States' response to Panel question No. 71 (second substantive meeting).
225 See para. 7.76 above.

expired corn measure, we did not find that any of them require the Panel to rule on that measure.
We therefore decline to do so.
7.2.3 Main characteristics of the wheat and rice measures
7.93. Having discerned the relevant measures identified in the United States' panel request, we will
briefly summarize their main characteristics and how they operate . In light of our decision not to
rule on the corn measure, we will only address the wheat and rice measures.
7.2.3.1 General framework
7.94. The overarching instruments establishing China's market price support policy for various types
of grain are the 2004 Grain Opinion and the 2004 Grain Distribution Regulation.226 Both documents
invoke the objectives of liberalizing and reforming the grain market in China.227 They also empower
the State Council, China's highest executive body, to implement the minimum procurement price
policy "in the main grain producing regions for the key grain varieties that are in short supply".228
7.95. The objective of raising the minimum procurement price for wheat and rice is also expressed
in several Opinions of the Central Committee of the Chinese Communist Party and the State Council
(so-called "No. 1 Document s").229 These documents indicate that while China may have been
envisaging transitioning its agricultural policies with respect to wheat and rice to more market-based
mechanisms, the highest Chinese authorities endorsed maintaining a minimum procurement price
for these products during the years 2012 -2015. While the No. 1 Documents cover a wide array of
agricultural policy is sues, the evidence shows that Chinese authorities were "following the
requirements of the No. 1 Central Document" 230 and sought to "effectively implement" such
documents when adopting more specific legal instruments.231 Within this general framework, various
bodies adopted more specific annual instruments establishing minimum procurement price
requirements, as discussed below.
7.2.3.2 Market price support programmes for wheat and rice
7.96. Pursuant to the 2004 Grain Opinion and the 2004 Grain Distribution Regulation, China' s
National Development and Reform Commission (NDRC), the Ministry of Finance, the Ministry of
Agriculture and the State Administration of Grain (SAG) adopt jointly Annual Notices setting forth or
increasing the minimum procurement price for wheat and rice in a given year. 232 While the 2004
Grain Distribution Regulation appears to limit the State Council's discretion in implementing the
minimum procurement price policy to cases when such actions are "necessary", 233 the Chinese

226 2004 Grain Opinion, (Exhibit USA-10/CHN-10B); 2004 Grain Distribution Regulation, (Exhibit USA-
12/CHN-9B).
227 2004 Grain Opinion, (Exhibit USA-10/CHN-10B), p. 2; Article 4, 2004 Grain Distribution Regulation,
(Exhibit USA-12/CHN-9B), p. 1.
228 2004 Grain Opinion, (Exhibit USA-10/CHN-10B), para. 5. See also Articles 24 and 26-27, 2004 Grain
Distribution Regulation, (Exhibit USA-12/CHN-9B), p. 5.
229 Communist Party of China Central Committee and State Council Several Opinions on Accelerating the
Promotion of Agricultural Science and Technology Innovation and Continuing to Strengthen the Capacity to
Guarantee Agricultural Product Supplies (Communist Party of China Central Committee, State Council, Zhong
Fa [2012] No. 1, issued December 31, 2011), (Exhibit USA-13), p. 14; Communist Party of China Central
Committee and State Council Several Opinions on Accelerating Development of Modern Agriculture and Further
Increasing Rural Development Dynamism (Communist Party of China Central Committee, State Council, Zhong
Fa [2013] No. 1, issued December 31, 2012), (Exhibit USA-14), p. 4; Communist Party of China Central
Committee and State Council Publication of "Several Opinions on Comprehensively Deepening Rural Reform
and Accelerating the Promotion of Agricultural Modernization" (Communist Party of China Central Committee,
State Council, Zhong Fa [2014] No. 1, issued January 19, 2014), (Exhibit USA-15), p. 3; Communist Party of
China Central Committee and State Council Several Opinions on Strengthening Reform and Innovation and
Accelerating Agricultural Modernization (Communist Party of China Central Committee, State Council, Zhong Fa
[2015] No. 1, issued February 1, 2015), (Exhibit USA-16), p. 7.
230 Ministry of Finance Opinions on Establishing the Subsidy System for Corn Producers (Cai Jian [2016]
No. 278), 20 May 2016 (English translation) (hereinafter "MOF Opinions, May 2016"), (Exhibit CHN-73B), p. 1.
231 2016 Corn Notice, (Exhibit USA-87/CHN-80B), p. 1.
232 China's first written submission, para. 66.
233 Article 27, 2004 Grain Distribution Regulation, (Exhibit USA-12/CHN-9B), p. 5.

authorities issued the Annual Notices on a yearly basis between 2012 and 2015.234 This suggests a
degree of continuity in China's policy of providing market price support to producers of wheat and
rice. The references in Annual Notices to prices announced in previous years could also suggest a
degree of continuity in the operation of the measures.235
7.97. The Annual Notices set the minimum procurement price applicable to a particular grain type
in a given year in the "major producing regions". The minimum procurement price is defined in
China's legal instruments as "the price offered at the purchasing and storage depots responsible for
purchasing grain directly from farmers according to the minimum procurement price policy."236 Table
2 in section 7.4.5.1 below lists the minimum procurement prices for each of the relevant product s
in years 2012-2015.
7.98. The minimum procurement prices are typically announced in advance of the harvesting year
and prior to the planting season. For wheat, this is typically October of the year preceding the
harvest; for rice, it is January or February of the harvest year. 237 The competent authorities are
required to publici ze information about the minimum procurement price, to "raise the farmers'
enthusiasm for production" 238 and "guide the farmers to plan their sowing reasonably in order to
propel stable development of grain production".239 This or similar language is repeated across notices
for different years and types of grain. We thus understand that each of the measures relating to
wheat, Indica rice and Japonica rice endeavours to make the minimum purchase price known to
farmers prior to the planting season.
7.99. Further details of the measures relating to wheat, Indica rice and Japonica rice – such as the
exact periods of operation, the competent entities and modalities of the administrative purchase of
agricultural products – are set forth in the Implementation Plans. 240 The Implementation Plans are
adopted annually around the time of the harvesting season by the same entities that adopt t he
Annual Notices.241 The Implementation Plans relating to wheat, Indica rice and Japonica rice follow

234 2012 Wheat Annual Notice, (Exhibit USA-20/CHN-18B); 2012 Rice Annual Notice, (Exhibit USA-
39/CHN-23B); 2013 Rice Annual Notice (USA-40/CHN-24B); 2013 Wheat Annual Notice (Exhibit USA-21/CHN-
93B); 2014 Wheat Annual Notice, (Exhibit USA-22/CHN-20B); 2014 Rice Annual Notice, (Exhibit USA-41/CHN-
25B); 2015 Wheat Annual Notice (Exhibit USA-23/CHN-21B); 2015 Rice Annual Notice (Exhibit USA-42/CHN-
26B).
235 While some notices refer in the title to "announcing" the minimum price for a certain year, others
mention "raising". See 2012 Wheat Annual Notice (Exhibit USA-20/CHN-18B), p.1; 2014 Wheat Annual Notice,
(Exhibit USA-22/CHN-20B), p. 1; 2012 Rice Annual Notice (Exhibit USA-39/CHN-23B), p.1; 2013 Rice Annual
Notice, (Exhibit USA-40/CHN-24B), p. 1; 2014 Rice Annual Notice, (Exhibit USA-41/CHN-25B), p.1.
236 Article 3, 2012 Early-Season Indica Rice Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p.
2; Article 3, 2012 Wheat Implementation Plan, (Exhibit USA-24/CHN-29B Revised), p. 2; Article 3, 2013 Wheat
Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p. 2; Article 3, 2014 Mid- to Late-Season Rice
Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 3; Article 4, 2015 Wheat and Rice
Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 3; Article 3, 2014 Wheat and Early-Season Indica
Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised); pp. 3 and 11.
237 2014 Wheat Annual Notice, (Exhibit USA-22/CHN-20B); 2015 Wheat Annual Notice, (Exhibit USA-
23/CHN-21B); 2012 Rice Annual Notice, (Exhibit USA-39/CHN-23B); 2013 Rice Annual Notice, (Exhibit USA-
40/CHN-24B); 2014 Rice Annual Notice, (Exhibit USA-41/CHN-25B); 2015 Rice Annual Notice, (Exhibit USA-
42/CHN-26B).
238 2012 Wheat Annual Notice, (Exhibit USA-20/CHN-18B), p. 1; 2014 Wheat Annual Notice, (Exhibit
USA-22/CHN-20B), p. 1; 2012 Rice Annual Notice, (Exhibit USA-39/CHN-23B), p. 1; 2013 Rice Annual Notice,
(Exhibit USA-40/CHN-24B), p. 1; 2014 Rice Annual Notice, (Exhibit USA-41/CHN-25B), p. 1.
239 2015 Rice Annual Notice, (Exhibit USA-42/CHN-26B), p. 1; 2015 Wheat Annual Notice, (Exhibit USA-
23/CHN-21B), p. 1.
240 2012 Wheat Implementation Plan (Exhibit USA-24/CHN-29B Revised); 2012 Early-Season Indica Rice
Implementation Plan, (Exhibit USA-44/CHN-34B Revised); 2012 Mid- to Late-Season Rice Implementation
Plan, (Exhibit USA-45/CHN-36B Revised); 2013 Wheat Implementation Plan, (Exhibit USA-25/CHN-19B
Revised); 2013 Early-Season Indica Rice Implementation Plan, (Exhibit USA-46/CHN-35B Revised); 2013 Mid-
to Late-Season Rice Implementation Plan, (Exhibit USA-47/CHN-37B Revised); 2014 Wheat and Early-Season
Indica Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised); 2014 Mid- to Late-Season Rice
Implementation Plan, (Exhibit USA-48/CHN-31B Revised); 2015 Wheat and Rice Implementation Plan, (Exhibit
USA-27/CHN-28B Revised).
241 See 2012 Wheat Implementation Plan (Exhibit USA-24/CHN-29B Revised), p. 1; 2012 Early-Season
Indica Rice Implementation Plan, (Exhibit USA-45/CHN-36B Revised), p. 1; 2012 Mid- to Late-Season Rice
Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 1; 2013 Wheat Implementation Plan, (Exhibit
USA-25/CHN-19B Revised), p. 1; 2013 Early-Season Indica Rice Implementation Plan, (Exhibit USA-46/CHN-
35B Revised), p. 1; 2013 Mid- to Late-Season Rice Implementation Plan, (Exhibit USA-47/CHN-37B Revised),

a similar structure and use a similar language, allowing analogous conclusions about the operation
of the wheat and rice measures. Therefore, we consider b elow jointly various aspects of the
measures relating to these two products.
7.2.3.3 Entities involved
7.100. The Implementation Plans are addressed to the regional branches and departments of
Sinograin and the ADBC, which, in turn, designate the appropriate local depots responsible for
purchase and storage of grain. 242 Such depots must have sufficient capacity to accommodate "the
expected amount of grain purchased at the minimum procurement price." 243 In addition, local
authorities are instructed to "guide and encourage vari ous grain operation, and processing
enterprises to actively enter the market and purchase new grains." 244 We, therefore, understand
that the entities implementing the minimum procurement price policy are either part of the state
administration or act under g uidance and direction of the state administration , which was not
disputed by the parties.
7.101. The purchase of wheat, Indica rice and Japonica rice is financed through loans issued to the
entities responsible for grain purchase "in full amount … pursuant to the minimum purchase price".245
The legal instruments cited by China and the United States do not refer to any limitations on the
amount of funds available to finance the purchase of grain. In fact, China confirmed during the first
substantive meeting with the Panel that there are no limitations on the amounts of loans that the
ADBC can issue to finance the purchase of wheat, Indica rice and Japonica rice under the market
price support programmes. 246 Likewise, the Implementation Plans do not explicitly mention any
limits on the amount of grain that the designated entities should purchase, if the market price falls
below the minimum level. Indeed, the Implementation Plans require storage capacity to "match with
the expected amount of grain purchased at the minimum p rice."247 They further instruct Sinograin

p. 1; 2014 Wheat and Early-Season Indica Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), p. 1;
2014 Mid- to Late-Season Rice Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 1; 2015 Wheat
and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 1.
242 Article 5, 2015 Wheat and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 3;
Article 5, 2012 Wheat Implementation Plan (Exhibit USA-24/CHN-29B Revised), p. 3; Article 5, 2013 Wheat
Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p. 3; Article 5, 2014 Mid- to Late-Season Rice
Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 4; Article 5, 2014 Wheat and Early-Season Indica
Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), p. 4; Article 5, 2012 Early -Season Indica Rice
Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 3.
243 Article 5, 2014 Wheat and Early-Season Indica Rice Implementation Plan, (Exhibit USA-26/CHN-30B
Revised), p. 4; Article 5, 2012 Early -Season Indica Rice Implementation Plan, (Exhibit USA-44/CHN-34B
Revised), p. 3; Article 5, 2012 Wheat Implementation Plan (Exhibit USA-24/CHN-29B Revised), p. 3; Article 5,
2013 Wheat Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p. 3; Article 5, 2014 Mid- to Late-
Season Rice Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 4; Article 5, 2015 Wheat and Rice
Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 4; Article 5, 2014 Wheat and Early-Season Indica
Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), pp. 4 and 12.
244 Article 9, 2012 Wheat Implementation Plan, (Exhibit USA-24/CHN-29B Revised), p. 5. See also
Article 9, 2015 Wheat and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 6; Article 9, 2013
Wheat Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p.5; Article 9, 2012 Early-Season Indica Rice
Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 5; Article 9, 2014 Wheat and Early-Season Indica
Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), p. 6; Article 9, 2014 Mid- to Late-Season Rice
Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 6.
245 Article 11, 2012 Early-Season Indica Rice Implementation Plan, (Exhibit USA-44/CHN-34B Revised),
p. 6; See also Article 10, 2012 Wheat Implementation Plan, (Exhibit USA-24/CHN-29B Revised), p. 6; Article
10, 2013 Wheat Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p. 6; Article 10, 2014 Mid- to Late-
Season Rice Implementation Plan, (Exhibit USA-48/CHN-31B Revised); Article 10, 2015 Wheat and Rice
Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 7; Article 10, 2014 Wheat and Early-Season
Indica Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), pp. 6-7.
246 See also China's response to Panel question No. 43.
247 Article 5, 2012 Wheat Implementation Plan, (Exhibit USA-24/CHN-29B Revised), p. 3; Article 5, 2015
Wheat and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 4; Article 5, 2013 Wheat
Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p. 3; Article 5, 2014 Mid- to Late-Season Rice
Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 4; Article 5, 2012 Early-Season Indica Rice
Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 3; Article 5, , 2014 Wheat and Early-Season
Indica Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), p. 4.

and local authorities to use the available storage space, or procure new space in order to "meet
farmer's needs for grain selling".248
7.2.3.4 Geographical scope
7.102. The geographical scope of the measures relating to wheat, Indica rice and Japonica rice is
essentially confined to "the major producing regions". These regions are further specified in the
Implementation Plans. In the years 2012-2015, they included:249
a. Wheat: Hebei, Jiangsu, Anhui, Shandong, Henan and Hubei.
b. Early-season Indica rice: Anhui, Jiangxi, Hubei, Hunan and Guangxi.
c. Mid- to late-season Indica and Japonica rice: Liaoning, Jilin, Heilongjiang, Jiangsu, Anhui,
Jiangxi, Henan, Hubei, Hunan, Guangxi, Sichuan.
7.103. Local governments in these regions have to implement the mi nimum procurement price
policy, while governments in other provinces can decide, at their discretion, whether to do so. This
follows from the imperative language of Article 2 of the Implementation Plan for a given year with
respect to the major producing regions, as opposed to the discretionary language used in respect of
other regions.250
7.2.3.5 Temporal scope
7.104. The Implementation Plans specify time -periods, during which the relevant entities have to
purchase grains at the specified minimum price, should the market price fall below that level.251 The
table below outlines the implementation periods for wheat and rice during the years 2012 through
2015.
Table 1: Implementation periods of minimum procurement price for wheat and rice
Year Wheat Early-season Indica
rice
Mid- and late-season Indica/Japonica
rice
2012 21/05/2012-
30/09/2012
16/07/2012-
30/09/2012
16/09/2012-31/12/2012 (8 provinces252);
16/11/2012-31/03/2013 (3 provinces253)
2013 21/05/2013-
30/09/2013
16/07/2013-
30/09/2013
18/09/2013-31/01/2014 (8 provinces);
16/11/2013-31/03/2014 (3 provinces)
2014 21/05/2014-
30/09/2014
16/07/2014-
30/09/2014
16/09/2014-31/01/2015 (8 provinces);
01/11/2014-31/03/2015 (3 provinces)
2015 21/05/2015-
30/09/2015
16/07/2015-
30/09/2015
16/09/2015-31/01/2016 (8 provinces);
10/10/2015-29/02/2016 (3 provinces)
7.105. Generally, these time-periods immediately follow the annual harvest in the major wheat and
rice producing provinces. 254 During that time, the relevant authorities have to supervise the
designated grain depots and encourag e other entities' involvement in implementing the minimum

248 Article 5, 2015 Wheat and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 5;
Article 5, 2012 Wheat Implementation Plan, (Exhibit USA-24/CHN-29B Revised), p. 3; Article 5, 2014 Wheat
and Early-Season Indica Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), pp. 5 and 13. See also
Article 5, 2012 Early-Season Indica Rice Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p.3
(referring to "actual needs").
249 See Article 2 of the Implementation Plan for a given year.
250 Article 2 of the Implementation Plans. We note in that regard that there is no disagreement between
the parties concerning the provinces covered by the challenged measures. See para. 7.301 below.
251 Article 6 of the Implementation Plans.
252 Jiangsu, Anhui, Jiangxi, Henan, Hubei, Hunan, Guangxi, Sichuan Provinces.
253 Liaoning, Jilin, Heilongjiang Provinces.
254 United States' first written submission, para. 54.

procurement price policy after the relevant type of grain enters the market .255 As such, the
implementation periods of the measures seem to coincide with the time period when the supply of
a particular type of grain is at its highest (as is the risk of the price falling below the desired minimum
level).
7.106. The purchases of wheat, Indica rice and Japonica rice at minimum prices are "activated"
when the market price of a particular type of grain drops below the minimum procurement price and
"deactivated" once the grain price climbs back above the minimum level. 256 The Implementation
Plans state that during the implementation periods, the relevant entities "shall actively enter the
market and purchase new grains for rotation, and the procurement price for grain rotation shall not
be lower than the national minimum procurement price."257 The measures thus ensure a price floor
for each type of grain, as intervention on the grain market depends on whether the market price
falls below the minimum procurement price.
7.2.3.6 Quality requirements
7.107. China maintains that only grain meeting specific national quality standards is eligible for
purchase under the measures relating to wheat, Indica rice and Japonica rice.258 These requirements
are specified in the Implementation Plans, which reference "National Standard No. 3 Grade" as the
standard quality product (with grain quality grades ranging from 1 to 5). 259 We understand from
these documents that grain of a lower or higher quality grade260 would still be subject to government
procurement, albeit at slightly different prices. 261 China would not procure inferior quality "out -of-
grade" grain at minimum prices set forth in the measures.262
7.3 Claims brought by the United States and Panel's order of analysis
7.108. As stated in Section 3, the United States requests the Panel to find that China has acted
inconsistently with its obligations pursuant to Articles 3.2 and 6.3 of the Agreement on Agriculture
because the level of domestic support provided by China exceeds China's commitment level of "nil"
specified in Section I of Part IV of China's Schedule CLII. In the alternative, and to the extent China's
commitment level of "nil" was understood as not setting out any commitment, the United States
requests the Panel to find that these measures are inconsistent with C hina's obligation under
Article 7.2(b) of the Agreement on Agriculture.263

255 Article 9, 2012 Wheat Implementation Plan, (Exhibit USA-24/CHN-29B Revised), p. 5; Article 9, 2014
Mid- to Late-Season Rice Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 6; Article 9, 2015 Wheat
and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 6; Article 9, 2013 Wheat
Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p.5; Article 9, 2012 Early-Season Indica Rice
Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 5; Article 9, 2014 Wheat and Early-Season Indica
Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), pp. 6 and 14.
256 China's first written submission, paras. 75 and 76.
257 Article 8 of the Implementation Plans. See for example the 2013 Wheat Implementation Plan,
(Exhibit USA-25/CHN-19B Revised), p. 5.
258 China's first written submission, para. 82.
259 Article 3, 2014 Wheat and Early-Season Indica Rice Implementation Plan, (Exhibit USA-26/CHN-30B
Revised), pp. 3 and 12; Article 3, 2012 Early-Season Indica Rice Implementation Plan, (Exhibit USA-44/CHN-
34B Revised), p. 2; Article 3, 2014 Mid- to Late-Season Rice Implementation Plan, (Exhibit USA-48/CHN-31B
Revised), p.3; Article 3, 2013 Wheat Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p. 2; Article 4,
2015 Wheat and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), pp. 2-3; Article 3, 2012 Wheat
Implementation Plan, (Exhibit USA-24/CHN-29B Revised), pp. 2-3.
260 2010 National Standards of Grain Quality Notice, (Exhibit CHN-43B Revised), p. 2.
261 China's response to Panel question No. 26. Article 3, 2014 Wheat and Early-Season Indica Rice
Implementation Plan, (Exhibit USA-26/CHN-30B Revised), pp. 3 and 11; Article 3, 2012 Early-Season Indica
Rice Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 2; Article 3, 2014 Mid- to Late-Season Rice
Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p.3; Article 3, 2013 Wheat Implementation Plan,
(Exhibit USA-25/CHN-19B Revised), p. 2; Article 4, 2015 Wheat and Rice Implementation Plan, (Exhibit USA-
27/CHN-28B Revised), p. 3; Article 3, 2012 Wheat Implementation Plan, (Exhibit USA-22/CHN-29B Revised),
p. 2.
262 China's response to Panel question No. 26.
263 United States' first written submission, para. 137 and fn 251.

7.109. We will thus begin by assessing the United States' claims under Articles 3.2 and 6.3 of the
Agreement on Agriculture and then proceed to the alternative claim under Article 7.2(b) of the
Agreement on Agriculture, if necessary.
7.4 Claims under Articles 6.3 and 3.2 of the Agreement on Agriculture
7.4.1 Introduction
7.110. As framed by the United States in its panel request and subsequent submissions, this dispute
relates to the assessment of China's compliance with its domestic support commitments in the form
of "a single means of agricultural support, 'market price support'". 264 The United States contends
that China has provided market price support to its agricultural producers of wheat and rice 265 in
excess of its commitments under the Agreement on Agriculture.
7.111. The United States claims that the level of domestic support China provided in 2012, 2013,
2014, and 2015, the most recent years for which, according to the United States, full annual
production and pricing data is available, is in excess of China's de minimis level of 8.5% for each of
the products at issue and thus of its commitment level of "nil". According to the United States, China
is breaching its WTO commitments solely through its market price support program mes for wheat,
Indica rice, and Japonica rice, when calculated in accordance with the provisions of the Agreement
on Agriculture.266
7.112. In response, China contends that its 2012-2015 market price support for both wheat and
rice was below China's negotiated de minimis commitment level of 8.5% of the total value of
production of these basic agricultural products and, a ccordingly, that there is no measurement of
support to be included in China's Current Total AMS.267 China submits that the calculations of China's
AMS presented by the United States suffer from various fundamental errors, in particular, because
they are based solely on what the United States terms the "methodology" established in Annex 3 of
the Agreement on Agriculture.268 China argues that the key methodologies at issue in this dispute
are those found in China's constituent data and methodology (CDM) used in the tables of supporting
material incorporated by reference in Part IV of China's Schedule.269
7.113. In what follows, we will address the parties' arguments regarding China's compliance with
its domestic support commitments und er the Agreement on Agriculture for the products at issue,
namely, wheat and rice, and in the years brought forward by the United States, namely 2012 to
2015.270 Our assessment will be organized as follows: We will first discuss China's domestic support
obligations as set out in the relevant provisions in the Agreement on Agriculture, and the method of
calculating the AMS for each product at issue, including the market price support formula. We then
move to an examination of the issues relating to the definition and calculation of the variables of the
market price support formula. This includes an examination of the AAP, the FERP and the QEP, as
well as a determination of the most appropriate adjustment rate to the processing level for certain
rice products. We will then perform the calculations based on the conclusions arrived at with respect
to each variable, and compare the results to China's de minimis level of 8.5%. Finally we address
the United States' claim under Article 7.2(b) of the Agreement on Agriculture.

264 United States' first written submission, para. 1.
265 We recall that as discussed in Section 7.2.2.2 above, the Panel has decided not to assess the corn
measures.
266 United States' first written submission, para. 9.
267 China's first written submission, para. 89.
268 China's first written submission, para. 89 (referring to United States' first written submission,
para. 93).
269 China's first written submission, para. 89.
270 We recall that China has requested that the Panel should additionally examine market price support
for these products for 2016 (even though support in 2016 was not challenged by the United States) alleging
that this will also be found to be below the 8.5% de minimis level (China's first written submission, para. 89).
For the reasons set out in paragraph 7.52 above, we will limit our analysis to the years 2012-2015.

7.4.2 Domestic support obligati ons as set out in Articles 3.2 and 6.3 of the Agreement
on Agriculture
7.114. At the outset, we note that there is no substantial disagreement between the parties on the
interpretation of Articles 3.2 and 6.3 of the Agreement on Agriculture. As will be seen below , the
parties seem largely to agree on the nature and scope of China's obligations. The main source of
disagreement relates to how to calculate China's domestic support provided through the challenged
measures.
7.115. The United States argues that the domestic support obligations set forth in Articles 3 and 6
of the Agreement on Agriculture are specifically tied to commitments made by each Member in Part
IV of their Schedule of Concessions. 271 The United States contends that under Article 3.2 of the
Agreement on Agriculture, China shall not provide support in favour of domestic producers in excess
of the commitment levels specified in Section I of Part IV of its Schedule and that to evaluate China's
compliance with its domestic support obligations in 2012, 2013, 2014 , and 2015, it is necessary to
determine whether China's Current Total AMS for each year exceeded "nil".272
7.116. The United States expands on its arguments and submits that pursuant to Articles 3 and 6
of the Agreement on Agriculture , each Member commits to limit its domestic support to the
"commitment levels specified in Section I of Par t IV of [the Member's] Schedule" 273 and that
Members individually specify their commitments in the form of "Annual and Final Bound Commitment
Levels" in Part IV of their Schedules of Concessions on Goods. 274 For the United States, it is to this
commitment that a Member's Current Total AMS is compared for a given year to determine whether
the Member's level of dom estic support is consistent with its WTO commitments. 275 The United
States also submits that under Articles 1(h) and 3.2 of the Agreement on Agriculture, Current Total
AMS is to be calculated "in accordance with the provisions of Article 6 " and "subject to Article 6".
The United States notes that Article 6.4 of the Agreement on Agriculture directs Members to exclude
de minimis levels of support from the calculation of Current Total AMS and that product-specific
domestic support that is less than or equal to the de minimis level is excluded from the calculation
of a Member's Current Total AMS.276 The United States submits that, conversely, when a Member's
product-specific support for a basic agricultural product exceeds the de minimis level, then the total
value of that support must be included in the Member's Current Total AMS calculation.277
7.117. Regarding the de minimis threshold, the United States maintains that China's Working Party
Report states that , in implementing Article 6.4 of the Agreement on Agriculture , China will "have
recourse to a de minimis exemption for product-specific support equivalent to 8.5 per cent of the
total value of production of a basic agricultural product duri ng the relevant year ".278 The United
States argues that thus, consistent with its accession commitment, China may provide support up
to a de minimis level for each basic agricultural product of 8.5% of the respective value of production
in each year without counting that product-specific support towards its Current Total AMS.
7.118. China submits that Article 3.2 of the Agreement on Agriculture contains Members ' core
obligations with respect to domestic support and that Article 6 elaborates on these obligations. For
China, Article 6.3 stipulates that compliance with the obligation in Article 3.2 is to be assessed on
the basis of an annual comparison between (i) negotiated, Member-specific commitment levels and
(ii) a calculation of that Member's annual levels of domestic support in the year at issue, expressed
"in terms of Current Total [Aggregate Measuremen t of Support or] AMS ".279 China also contends

271 United States' first written submission, para. 78.
272 United States' first written submission, para. 70.
273 United States' first written submission, para. 80 (referring to Agreement on Agriculture, Article 3.2).
274 United States' first written submission, para. 80 (referring to Agreement on Agriculture,
Article 1(h)(i)).
275 Agreement on Agriculture, Article 6.3.
276 Pursuant to Article 6.4, a similar calculation is completed for non-product specific domestic support.
In the event that non-product specific domestic support is less than or equal to a Member's de minimis level
when compared to the total value of agricultural production, is not required to be included in the Current Total
AMS calculation.
277 United States' first written submission, para. 82.
278 United States' first written submission, para. 83 (referring to China's Working Party Report,
paragraph 235, (Exhibit USA-7)).
279 China's first written submission, paras. 96-98.

that Part IV of China's Schedule establishes a Base Total AMS of "zero" and a final bound commitment
level of "nil"280 and that, i n these circumstances, Article 7.2(b) of the Agreement on Agriculture
applies. China argues that pursuant to Articles 3.2, 6.3 and 7.2(b), read together with Part IV of
China's Schedule, China may not provide non -exempt domestic support in excess of its applicable
de minimis commitment levels.281
7.119. Regarding the de minimis level, China refers to Article 6.4 and argues that it would have
permitted China, as a developing country, to provide product -specific domestic support that does
not exceed 10% of the total value of production of the basic agricultural product during the relevant
year. However, China explains that paragraph 235 of China's Working Party Report, which according
to China is incorporated into China's Accession Protocol pursuant to paragraph 1.2 of this Accession
Protocol and paragraph 342 of China's Working Party Report, limits China's de minimis level at only
"8.5 per cent of the total value of production of a basic agricultural product during the relevant
year".282 For China, as long as it provides product-specific domestic support for a basic agricultural
product equivalent to, or less than, 8.5% of the value of that product, China is not required to include
such support in its Current Total AMS under Articles 3.2 and 6.3.283
7.120. Having presented the parties' arguments in this respect, w e now set out our interpretation
of the mentioned provisions. We begin by noting the text of the provisions invoked by the United
States. Article 3.2 of the Agreement on Agriculture provides:
Article 3
Incorporation of Concessions and Commitments
2. Subject to the provisions of Article 6, a Member shall not provide support in favour
of domestic producers in excess of the commitment levels specified in Section I of
Part IV of its Schedule.
7.121. Article 6.3 of the Agreement on Agriculture provides:
Article 6
Domestic Support Commitments
A Member shall be considered to be in compliance with its domestic support reduction
commitments in any year in which its domestic support in favour of agricultural
producers expressed in terms of Current Total AMS does not exceed the corresponding
annual or final bound commitment level specified in Part IV of the Member's Schedule.
7.122. We also note that China's Base Total AMS is set at zero and that the "Final Bound
Commitment Level" is specified as "nil" in Section I of Part IV of Chin a's Schedule CLII, which
provides as follows:284
SECTION I - Domestic Support: Total AMS Commitments
BASE TOTAL AMS Final bound commitment levels
- 0 - Nil
7.123. From the above, we observe that pursuant to Article 3.2 of the Agreement on Agriculture,
Members can provide domestic support in favour of domestic producers as long as it is not in excess
of the commitments undertaken by each Member, as contained in Part IV of its Schedule. In turn,
Article 6.3 sets out that i n assessing a Member's compliance with its domestic support reduction

280 China's first written submission, para. 108 (referring to China's Total AMS Commitments, (Exhibit
CHN-52)).
281 China's first written submission, para. 100.
282 China's first written submission, para. 102 (referring to paragraph 1.2 of China's Accession Protocol).
283 China's first written submission, para. 102.
284 China's Total AMS Commitments, (Exhibit CHN-52).

commitments, it is necessary to compare the Current Total AMS and the corresponding domestic
support commitment. In the context of this particular dispute, these provisions indicate that, when
assessing China's compliance with its domestic support commitments, the Panel must calculate
China's Current Total AMS. The Panel is then called upon to compare the resulting values with China's
"nil" commitment.
7.124. We also observe that pursuant to Article 6.4 of the Agreement on Agriculture, a Member's
Current Total AMS does not include any product-specific AMS values that are below or equal to the
de minimis level of support, which, in China's case, is 8.5%. 285 In practical terms, this means that
China's compliance with its domestic support commitments will be contingent on whether the AMS
for each product and each of the years at issue remains below or equal to the 8.5% of the total
value of production of the product in question . Therefore, in assessing the obligations contained in
Article 3.2 and 6.3 of the Agreement on Agriculture, the Panel will need first to calculate China's
AMS in order to arrive at a calculation of China's Current Total AMS.
7.125. In this regard, Article 1 of the Agreement on Agriculture defines AMS and Total AMS. The
relevant part of Article 1(a) defines "Aggregate Measurement of Support" and "AMS" as:
[T]he annual level of support, expressed in monetary terms, provided for an agricultural
product in favour of the producers o f the basic agricultural product or non -product
specific support provided in favour of agricultural producers in general, other than
support provided under programmes that qualify as exempt from reduction under Annex
2 to this Agreement, which is:
…
(ii) with respect to support provided during any year of the implementation period
and thereafter, calculated in accordance with the provisions of Annex 3 of this
Agreement and taking into account the constituent data and methodology used
in the tables of suppo rting material incorporated by reference in Part IV of the
Member's Schedule
7.126. Similarly, Article 1(h) defines "Total Aggregate Measurement of Support" and "Total AMS"
as:
[T]he sum of all domestic support provided in favour of agricultural producers,
calculated as the sum of all aggregate measurements of support for basic agricultural
products, all non -product-specific aggregate measurements of support and all
equivalent measurements of support for agricultural products, and which is:
…
(ii) with respect to the level of support actually provided during any year of the
implementation period and thereafter (i.e. the " Current Total AMS"), calculated
in accordance with the provisions of this Agreement, including Article 6, and with
the constituent data and met hodology used in the tables of supporting material
incorporated by reference in Part IV of the Member's Schedule
7.127. From the above definitions, we note that both AMS and Total AMS relate to a monetary
value of the support granted to producers of basic agricultural products. AMS generally may be
product- or non-product specific and in this case refers to the amount of support provided to a
number of specified products , i.e. wheat and rice . Total AMS is the sum of all of the separate
product-specific AMS, as wel l as any non -product specific AMS and equivalent measurements of
support, using the exclusionary rules contained in Article 6.4 regarding AMS levels below the de
minimis level and in Article 6.5 regarding direct payments under production -limiting programmes.
When calculated for a specific year, it becomes the Current Total AMS.

285 China's Working Party Report, para. 235, incorporated into China's Accession Protocol by para. 342
(Exhibit USA-7).

7.128. We therefore note that in assessing China's compliance with the obligations contained in
Articles 3.2 and 6.3 of the Agreement on Agriculture, the Panel will need to calculate China's product-
specific AMS provided through market price support for rice and wheat for each year, as defined in
Article 1 of the Agreement on Agriculture, and compare it to China's de minimis level. If the amount
of any such product -specific AMS is above the 8.5% de minimis level, the Panel will include that
amount in China's Current Total AMS for that year. The Panel will then compare the resulting Current
Total AMS against China's final bound commitment of "nil". In this connection, the actual calculation
of the Current Total AMS is a crucial component of the Panel's assessment. We explore this notion
in the next section.
7.4.3 Calculation of AMS and Current Total AMS under the Agreement on Agriculture
7.129. As discussed in the previous section, Article 1 of the Agreement on Agriculture sets out the
definitions of AMS, Total AMS and Current Total AMS. This same provision also establishes the
manner in which these measurements of domestic support should be cal culated. In particular,
Article 1(a)(ii) states that AMS is to be "calculated in accordance with the provisions of Annex 3 of
this Agreement and taking into account the constituent data and methodology used in the tables of
supporting material incorporated by reference in Part IV of the Member's Schedule". Similarly, Article
1(h)(ii) establishes that Current Total AMS is to be " calculated in accordance with the provisions of
this Agreement, including Article 6, and with the constituent data and methodology used in the
tables of supporting material incorporated by reference in Part IV of the Member's Schedule". From
the text of Article 1, and as noted in paragraph 7.124 above, we note that the calculation of Current
Total AMS follows a sequential process where the AMS for each specific product needs to be
calculated before a corresponding Current Total AMS can be arrived at. We also observe that the
Agreement on Agriculture establishes other important rules to follow when calculating both AMS and
Current Total AMS.
7.130. As a starting point in our analysis, we note that Article 1 sets out that both the provisions of
Agreement on Agriculture, including Annex 3, and the CDM contained in the tables of supporting
material, have to be used when calculating AMS and Current Total AMS.
7.131. This understanding is also shared by the parties. In this connection, China argues that the
starting point to calculate AMS and Total AMS are Articles 1(a)(ii) and 1(h)(ii) and that the definitions
of AMS and Total AMS found in each of these Articles require the calculation of AMS on the basis of
two sources of input: (i) the provisions of Annex 3 and (ii) "the constituent data and methodology
used in the tables of supporting material incorporated by reference i n Part IV of the Member's
Schedule".286 For China, the CDM incorporated by reference in Part IV of a Member's Schedule is a
Member-specific additional source of treaty text that is relevant to the calculation of AMS, including
in the context of market price support under the general framework provided by Paragraphs 8 and
9 of Annex 3.287The United States argues that Article 1(a)(ii) specifies that AMS is to be "calculated
in accordance with the provisions of Annex 3 of this Agreement" , and that it is to be calc ulated
"taking into account the constituent data and methodology used in the tables of supporting material
incorporated by reference in Part IV of the Member's Schedule."288
7.132. We have established that Article 1 (a) and (h) direct us to use both the provisions o f the
Agreement on Agriculture, including Annex 3, and China's CDM, when calculating AMS and Current
Total AMS, and that AMS has to be calculated first . We now move to address the provisions of the
Agreement on Agriculture that are directly relevant for this task.
7.133. Annex 3289 elaborates on some essential parameters that inform the calculation of AMS from
domestic support provided through market price support.
7.134. First, Paragraph 1 sets out that AMS shall be calculated on a product-specific basis for each
basic agricultural product receiving market price support, non-exempt direct payments, or any other

286 China's first written submission, para. 112.
287 China's first written submission, para. 115.
288 United States' first written submission, para. 87 (referring to Article 1(a)(ii) of the Agreement on
Agriculture).
289 We note that this Annex is titled "Domestic support – Calculation of Aggregate Measurement of
Support".

subsidy not exempted from the reduction commitment. This provision also states that support which
is non-product specific shall be totalled into one non-product-specific AMS in total monetary terms.
7.135. Second, Paragraph 7 mandates that "AMS shall be calculated as close as practicable to the
point of first sale of the basic agricultural product concerned".
7.136. Third, Paragraph 8 provides the formula that is to be used when calculating AMS from market
price support (the MPS formula): "market price support shall be calculated using the gap between a
fixed external reference price and the applied administered price multiplied by the quantity of
production eligible to receive the applied administered price":
 𝑀𝑎𝑟𝑘𝑒𝑡 𝑃𝑟𝑖𝑐𝑒 𝑆𝑢𝑝𝑝𝑜𝑟𝑡 = (𝑃𝐴𝑝𝑝𝑙𝑖𝑒𝑑 𝐴𝑑𝑚𝑖𝑛𝑖𝑠𝑡𝑒𝑟𝑒𝑑 − 𝑃𝐹𝑖𝑥𝑒𝑑 𝐸𝑥𝑡𝑒𝑟𝑛𝑎𝑙 ) ∙ 𝑄𝐸𝑙𝑖𝑔𝑖𝑏𝑙𝑒 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛

Where:
𝑃𝐴𝑝𝑝𝑙𝑖𝑒𝑑 𝐴𝑑𝑚𝑖𝑛𝑖𝑠𝑡𝑒𝑟𝑒𝑑 = 𝐴𝑝𝑝𝑙𝑖𝑒𝑑 𝐴𝑑𝑚𝑖𝑛𝑖𝑠𝑡𝑒𝑟𝑒𝑑 𝑃𝑟𝑖𝑐𝑒

𝑃𝐹𝑖𝑥𝑒𝑑 𝐸𝑥𝑡𝑒𝑟𝑛𝑎𝑙 = 𝐹𝑖𝑥𝑒𝑑 𝐸𝑥𝑡𝑒𝑟𝑛𝑎𝑙 𝑅𝑒𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝑃𝑟𝑖𝑐𝑒

𝑄𝐸𝑙𝑖𝑔𝑖𝑏𝑙𝑒 𝑝𝑟𝑜𝑑𝑢𝑐𝑖𝑜𝑛 = 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑜𝑓 𝐸𝑙𝑖𝑔𝑖𝑏𝑙𝑒 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛

7.137. Fourth, Paragraph 9 states that the FERP "shall be based on the years 1986 to 1988 and
shall generally be the average f.o.b. unit value for the basic agricultural product concerned in a net
exporting country and the average c.i.f. unit value for the basic agricultural product concerned in a
net importing country in the base period".
7.138. Having noted the most important provisions in the Agreement on Agriculture that define how
AMS from market price support should be calculated, we move to discuss the second element tha t
is to be used in this calculation, namely, the CDM. In this regard, we recall that Articles 1(a)(ii) and
1(h)(ii) both direct the Panel to use " the constituent data and methodology used in the tables of
supporting material incorporated by reference in Part IV of the Member's Schedule". China's CDM is
found in the tables of supporting material contained in document WT/ACC/CHN/38/Rev.3 (Rev.3).290
We note, however, that the manner in which China's CDM should directly inform the Panel's
calculation of AMS is l ess clear. This is so mainly because (i ) the tables of supporting material do
not identify what comprises the constituent data and methodology that should be used to calculate
AMS, and (ii) the difference in language of Articles 1(a)(ii) and 1(h)(ii) when referring to the usage
of the CDM.
7.139. Regarding the first issue mentioned above, we must differentiate between the elements that
should inform the calculation of China's AMS, (i.e. the CDM), and where these elements are found,
(i.e. in the tables of supporting material incorporated by reference into Part IV of China's Schedule).
In this connection, we recall that the definitions contained in Article 1 of the Agreement on
Agriculture only direct the Panel to use the CDM, and not t he entirety of the tables of supporting
material, when calculating AMS and Current Total AMS . For this reason, although Rev.3 contains
China's tables of supporting material, and the mentioned tables contain the CDM, the Panel would
need to discern which of the elements contained in these tables are CDM. In other words, the text
of Article 1 suggests that not everything that is contained in the tables of supporting material and
Rev.3 should inform the calculation of AMS, but only the constituent data and methodology found in
those tables.
7.140. In this regard, we observe that the Agreement on Agriculture does not provide a precise
definition of "constituent data and methodology".
7.141. China argues that the phrase "constituent data and methodology", means "those data and
methodologies in a Member 's Supporting Tables that are characteristic, formative, essential, and
integral for the calculation of both Base and Current AMS and Base Total AMS and Current Total

290 WT/ACC/CHN/38/Rev.3, (Exhibit USA-43).

AMS."291 According to China, the dictionary meaning of "data" refers to "an item of information"292
and that i n the context of calculating AMS , Total AMS and market price support, the term "data"
encompasses any numbers and figures used and may include, for example, the numerical values of
the FERP, the AAP, and eligible production.293 China also argues that the dictionary meaning of
"methodology" refers to any "method or body of methods used in a particu lar field of study or
activity"294, and that in the context of calculating AMS and Total AMS, this term may include the
types of calculations to be performed in calculating AMS ( i.e. the relevant formula e), and the
methods to be used to determine relevant input data.295
7.142. The United States argues that the ordinary meaning of the terms "the constituent data and
methodology" includes the country -specific facts, information, modes, or procedures that are
characteristic of domestic support and the agriculture sector of the M ember at the time of
accession.296 For the United States, t his information is found in tables of supporting material used
to support or explain the basis for a Member's proposed Final Bound Commitment Level. The United
States also argues that "data" is defined as "[f]acts, esp. numerical facts, collected together for
reference or information …"297, "method," is defined as "[a] mode of procedure; a (defined or
systematic) way of doing things ;"298 "methodology" is defined as "[a] body of methods used in a
particular branch of study or activity;" and "constituent" is defined as "[t]hat makes a thing what it
is," or is "characteristic."299
7.143. We turn to the ordinary meaning of "constituent". As an adjective, it means "that constitutes
or makes a thing what it is ; formative, essential; characteristic". 300 "Data" is defined as "r elated
items of (chiefly numerical) informati on considered collectively … used for reference, analysis, or
calculation."301 Finally, "methodology" is defined generally as "a method or body of methods used in
a particular field of study or activity ".302 Similarly, a "method" is defined generally as " a mode of
procedure in any activity " or particularly as "a special form of procedure or characteristic set of
procedures employed (more or less systematically) in an intellectual discipline or field of study as a
mode of investigation and inquiry".303 We also understand that due to the grammatical construction
of the phrase, the adjective "constituent" modifies both the words "data" and "methodology" such
that the phrase can be said to refer to 'constituent data' and 'constituent methodology'. 304 This
implies that each of the relevant data and methodologies referred to must be in some way formative
or characteristic of the tables of supporting material.

291 China's response to Panel question No. 73 (second substantive meeting).
292 China's response to Panel question No. 73 (second substantive meeting) (referring to Oxford English
Dictionary, OED Online, "data, n", available at: http://www.oed.com/view/Entry/296948? (last viewed 26
October 2017) (Exhibit CHN-56)).
293 China's first written submission, para. 143; China's response to Panel question No. 73 (second
substantive meeting).
294 China's response to Panel question No. 73 (second substantive meeting) (referring to Oxford English
Dictionary, OED Online, "methodology, n", available at: http://www.oed.com/view/Entry/117578? (last viewed
26 October 2017) (Exhibit CHN-55)).
295 China's response to Panel question No. 73 (second substantive meeting).
296 United States' response to Panel question No. 73 (second substantive meeting).
297 United States' response to Panel question No. 73 (second substantive meeting) (referring to Shorter
Oxford English Dictionary, "data," vol. I, p. 594 (ed. 1993)).
298 United States' response to Panel question No. 73 (second substantive meeting) (referring to Shorter
Oxford English Dictionary, "method", "methodology," vol. I, p. 1759 (ed. 1993)).
299 United States' response to Panel question No. 73 (second substantive meeting) (referring to Shorter
Oxford English Dictionary, "constituent," vol. I, p. 488 (ed. 1993)).
300 Oxford English Dictionary Online, definition of "constituent", available at:
<http://www.oed.com/view/Entry/39840>, accessed 8 June 2018.
301 Oxford English Dictionary Online, definition of "data", available at:
<http://www.oed.com/view/Entry/296948>, accessed 8 June 2018.
302 Oxford English Dictionary Online, definition of "methodology", available at:
<http://www.oed.com/view/Entry/117578>, accessed 8 June 2018.
303 Oxford English Dictionary Online, definition of "method", available at:
<http://www.oed.com/view/Entry/117560>, accessed 8 June 2018.
304 The United States noted that, given the grammatical construction of the phrase, the adjective
"constituent" modifies both nouns, "data" and "methodology". United States' response to Panel question No. 73
(second substantive meeting). China similarly noted its understanding that the term "constituent" qualifies
both the terms "data" and "methodology". China's response to Panel question No. 73 (second substantive
meeting).

7.144. As a whole, taken in the context of Articles 1(a) and 1(h) of the Agreement on Agriculture,
the Panel understands t he phrase "constituent data and methodology" to mean those pieces of
(chiefly numerical) information and/or modes of procedure which are characteristic of and essential
for the understanding and calculation of a Member's AMS, as found in that Member's tabl es of
supporting material.
7.145. We now turn to the second issue, that is, the different language in Articles 1(a) (ii) and
1(h)(ii) when referring to the use of the CDM. We observe that the term CDM is mentioned three
times in the Agreement on Agriculture: in the definition of "AMS" of Article 1(a)(ii), in the definition
of "Equivalent Measurement of Support" of Article 1(d)(ii), and in the definition of "Current Total
AMS" of Article 1(h)(ii). In all three of these provisions, CDM is used in the context of how these
measurements of domestic support are to be calculated. We also note that while the first two
provisions use the language "calculated … taking into account the constituent data and methodology"
(emphasis added), the third provision uses different language: "calculated in accordance with … the
constituent data and methodology" (emphasis added).
7.146. The parties have also noted the different language of Articles 1(a) (ii) a nd 1( h)(ii),
particularly of the words "taking into account the [CDM]" and " calculated in accordance with … the
[CDM]".
7.147. Regarding Article 1(a)(ii), China contends that it uses the phrase "taking into account" when
referring to "the constituent data and methodology … incorporated by reference in Part IV of the
Member's Schedule". China submits that t he dictionary meaning of "to take into account " is "to
include something in an account or reckoning, to take into consideration, especially as a contributory
factor; to notice".305 According to China, similarly to Article 1(h)(ii), Article 1(a)(ii) emphasizes the
role of "the constituent data and methodology … incorporated by reference in Part IV of the Member's
Schedule" in calculating AMS.306 China, however, contends that the dictionary meanings of the terms
(i) "in accordance with" in Article 1(h)(ii); and (ii) "in accordance with" and "taking into account" in
Article 1(a)(ii) do not fully address the relationship between (i) the terms of Annex 3 and (ii) "the
constituent data and methodology … incorporated by reference in Part IV of the Member 's
Schedule".307
7.148. China claims that the context that Articles 1(a) and 1(h) provide for one another calls for
AMS and Current Total AMS calculations on the basis of an approach that gives meaning to both
Annex 3 and the CDM. For China, this is achieved by using a holistic approach and a harmonious
reading of (i) Annex 3 as providing the general framework for the calculation of AMS and (ii) a
Member's "[CDM] used in the tables of supporting material incorporated by reference in Part IV of
the Member's Schedule", as providing additional detail to fill in that framework for the calculation of
AMS.308
7.149. In this connection, China argues that Articles 1(a)(ii) and 1(h)(ii) provide relevan t context
for each other's interpretation, as both concern the calculation of domestic support, and claims that
the Appellate Body in Korea – Various Measures on Beef speculated that Article 1(a)(ii) could be
read to attribute "higher priority to 'the provisions of Annex 3 ' than to [a Member 's] 'constituent
data and methodology '",309 based on the use of "in accordance with " and "taking into account ".
China notes, however, that the Appellate Body also recognized that "this difference is not reflected
in [the] wording of the definition of Cur rent Total AMS in Article 1(h) ".310 China contends this is
because by using the phrase "in accordance with" for both (i) "the provisions of this Agreement ",
including Annex 3, and (ii) "the [CDM] used in the tables of supp orting material incorporated by

305 China's first written submission, para. 126 (referring to Oxford English Dictionary, OED Online, "to
take account of, n.", pp. 21-22, available at: http://www.oed.com/view/Entry/1194? (last viewed 26 October
2017), (Exhibit CHN-54)).
306 China's first written submission, para. 126.
307 China's first written submission, para. 128.
308 China's first written submission, para. 131.
309 China's first written submission, para. 129 (referring to Appellate Body Report, Korea – Various
Measures on Beef, para. 112).
310 China's first written submission, para. 129 (referring to Appellate Body Report, Korea – Various
Measures on Beef, footnote [48] (underlining added)).

reference in Part IV of the Member's Schedule", Article 1(h)(ii) attributes equal importance to both
provisions.311
7.150. China further argues that t he panel in Korea – Various Measures on Beef also highlighted
the "complementary"312 nature of Articles 1(a)(ii) and 1(h)(ii) in providing guidance for the
calculation of AMS and Current Total AMS, respectively. China claims that i t follows that the
calculations must be undertaken in a parallel manner, and the calculation of AMS cannot be
undertaken on a basis that differs from that applicable to the calculation of Total AMS. China
contends that the panel in Korea – Various Measures on Beef properly identified the reason for the
complementary nature of these provisions in the following terms: "all these concepts, e.g. domestic
support, AMS, Current Total AMS, and total domestic support and the provisions of Articles 1(a),
1(h), 3.2, 6.4, […] are organically and inextricably linked ".313 China claims that i n these
circumstances, to ensure coherent calculations, the same data and methodology must be applied for
the calculations of AMS and its sum as Current Total AMS.314
7.151. The United States disagrees with China's interpretation. Key to its contention is the notion
that Articles 1(a)(ii) and 1(h)(ii) each address a different stage of the AMS calculation. In this vein,
the United States argues that t he product-specific AMS calculation in Article 1(a)(ii) addresses the
evaluation of domestic support provided on a product-by-product basis, and that the Current Total
AMS described in Article 1(h)(ii) is the summing of all product -specific AMS, after considering
whether relevant de minimis criteria and other considerations set out in Article 6 have been met.315
7.152. For the United States, Article 1(a)(ii) specifies that for support provided in any year after
implementation, product-specific AMS is "calculated in accordance with the provisions of Annex 3 of
this Agreement" and that Article 1(a)(ii) continues by stating that, in addition to complying with
Annex 3, AMS is calculated "taking into account the constituent data and methodology used in the
tables of support material". According to the United States, the inclusion of the phrase "in accordance
with" in Article 1(a)(ii) indicates that a product -specific AMS calculation must be conducted in
"conformity" with the methodology provided in Annex 3, and that conversely, the use of the phrase
"taking into account " in reference to constituent data and methodology requires a panel to "take
into consideration, [or] notice" that information.316 The United States submits that this indicates that
a lesser degree of consideration is accorded to any constituent data and methodology.317
7.153. The United States further submits that a fter a panel has calculated the various product -
specific AMS for a particular year as set out in Article 1(a)(ii), it is directed to turn to aggregatin g
these constituent parts to calculate the Current Total AMS for each of these years. For the United
States, the first phrase of Article 1(h)(ii), "in accordance with the provisions of this Agreement,
including Article 6," indicates that the calculation must be consistent with the binding commitments
in the Agreement on Agriculture, and highlights Article 6, which provides information on de minimis
levels and other exemptions as relevant, and that the second direction in Article 1(h)(ii) states that
Current Total AMS is "calculated… with the constituent data and methodology. " The United States
claims that "with" in this context can mean "by use of (a thing) as an instru ment or means … by
means of"318 and that this is a less demanding requirement than "in accordance with."319
7.154. Responding to China's arguments regarding Article 1(h)(ii), the United States submits that
the phrase "in accordance with, " which is applicable to the first phrase, does not extend to the
second phrase, as grammatically, "in accordance with " and "with" are sepa rate and distinct

311 China's first written submission, para. 129.
312 China's first written submission, para. 130 (referring to Panel Report, Korea – Various Measures on
Beef, para. 812).
313 China's first written submission, para. 130 (referring to Panel Report, Korea – Various Measures on
Beef, para. 813).
314 China's first written submission, para. 130.
315 United States' response to Panel question No. 62 (second substantive meeting).
316 United States' response to Panel question No. 62 (second substantive meeting) (referring to
Appellate Body Report, Korea – Various Measures on Beef, para. 111 (citing The New Shorter Oxford English
Dictionary, (Clarendon Press, 1993), Vol. I, p. 15)).
317 United States' response to Panel question No. 62 (second substantive meeting).
318 United States' response to Panel question No. 62 (second substantive meeting) (referring to Shorter
Oxford English Dictionary, "with," vol. II, p. 3703-04 (ed. 1993)).
319 United States' response to Panel question No. 62 (second substantive meeting).

prepositions. The United States claims that i f "in accordance with " was intended to apply to both
objects (the Agreement and the constituent data and methodology), the second "with" would be
superfluous. The United States argues that even if this phrase were to be understood as "in
accordance with" the constituent data and methodology, this would refer to constituent data and
methodology for purposes of Article 1(h)(ii), that is, calculation of Current Total AMS. For the United
States, the "constituent" data and methodology would only be that releva nt to the operation in
question, i.e. the consideration of de minimis levels and summing of current product -specific AMS
and non-product-specific AMS, as appropriate.320
7.155. The United States also responds to China's arguments that "context" and proximity suggest
that these terms should be interpreted to provide the same direction with regard to calculati on of
AMS and Current Total AMS 321, and claims that this interpretation is not supported by the text of
Articles 1(a) and 1(h) as understood applying customary rules of interpretation (Articles 31 -32 of
the VCLT).322
7.156. We begin by noting that while the parties recognize the difference in the language in Articles
1(a)(ii) and 1(h)(ii) when referring to the usage of the CDM, they both extract different conclusions
on how the Panel should interpret them. While China contends that AMS must be calculated
consistently for purposes of both AMS and Total AMS calculations323, and that the calculations must
be undertaken in a parallel manner, implying that the calculation of AMS cannot be undertaken on
a basis that differs from that applicable to the calculation of Total AMS 324, the United States
emphasises that Articles 1(a)(ii) and 1(h)(i i) each address a different stage of the calculation of
AMS, thereby implying that the differences in the language should be applied to the respective stage
of the calculation.
7.157. We recall that, as stated in paragraph 7.129 above, the calculation of Current Total AMS
follows a two -step process where product -specific AMS, as defined in Article 1(a)(ii), has to be
calculated first. The resulting AMS for different products would then need to be subjected to Article
6.4 of the Agreement on Agriculture and the support exceeding the de minimis level aggregated in
order to obtain the Current Total AMS, as defined in Article 1(h)(ii). This Current Total AMS would
then be com pared to a Member's domestic support commitments. Therefore, although
Articles 1(a)(ii) and 1(h)(ii) can be said to be organically and inextricably linked325, they each relate
to a different stage of the overall calculation of AMS. These conceptual differenc es, in turn, are
reflected in the language of the two provisions. For these reasons, we consider that the calculations
must be undertaken sequentially. Furthermore, the concrete application of the CDM may vary
depending on whether AMS or Current Total AMS is being calculated.
7.158. We generally agree with China that the calculation of Current Total AMS should be done on
the basis of an approach that gives meaning to both Annex 3 and the CDM, by using a holistic
approach and a harmonious interpretation of the diff erent provisions of the Agreement on
Agriculture.326 However, such an interpretation should not lead to a result where the textual
differences in either provision are read out, without more, especially in a situation where there
appear to be important differ ences in the manner in which AMS and Current Total AMS are to be
calculated.
7.159. We note that the Appellate Body has already addressed some of these issues in the past.
Indeed, in Korea – Various Measures on Beef it noted that:
Article 1(a)(ii) contains two e xpress requirements for calculating Current AMS. First,
Current AMS is to be "calculated in accordance with the provisions of Annex 3 of this
Agreement". The ordinary meaning of "accordance" is "agreement, conformity,

320 United States' response to Panel question No. 62 (second substantive meeting).
321 United States' response to Panel question No. 62 (second substantive meeting) (referring to China's
second written submission, paras. 296-305; China's first written submission, paras. 135-139).
322 United States' response to Panel question No. 62 (second substantive meeting).
323 China's comments on United States' response to Panel question No. 62 (second substantive
meeting).
324 China's first written submission, para. 130.
325 Panel Report, Korea – Various Measures on Beef, para. 813.
326 China's first written submission, para. 131.

harmony".327 Thus, Current AMS must be calculated in "conformity" with the provisions
of Annex 3. Second, Article 1(a)(ii) provides that the calculation of Current AMS is to
be made while "taking into account the constituent data and methodology used in the
tables of supporting material incorpor ated by reference in Part IV of the Member's
Schedule." "Take into account" is defined as "take into consideration, notice". 328 Thus,
when Current AMS is calculated, the "constituent data and methodology" in a Member's
Schedule must be "taken into account", that is, it must be "considered". 329 (emphasis
original)
7.160. Of particular importance in this discussion is a footnote to the above paragraph, where the
Appellate Body noted that:
[T]his difference is not reflected in the wording of the definition of Current Total AMS in
Article 1(h). Article 1(h)(ii) provides that Current Total AMS is to be calculated "in
accordance with the provisions of this Agreement, including Article 6, and with the
constituent data and methodology used in the tables of supporting material incorporated
by reference in Part IV of the Member's Schedule".330
7.161. The Appellate Body also observed that, in the wording of Article 1(a)(ii) itself, a hig her
priority is attributed to "the provisions of Annex 3" than to the "constituent data and methodology",
as the ordinary meaning of the term "in accordance with" reflects a more rigorous standard than the
term "taking into account". 331 The Appellate Body then went on to describe this difference as
involving an "apparent hierarchy" . Therefore, the Appellate Bo dy has already noted the potential
differences in the usage of a Member's CDM, depending on whether the current AMS or Current Total
AMS is being calculated. 332
7.162. However, in that dispute, the panel and Appellate Body found that there was no constituent
data and methodology for beef333, and as such, it was not necessary to decide how a conflict between
"the provisions of Annex 3" and the "constituent data and methodology used in the tables of
supporting material incorporated by reference in Part IV of the Member's Schedule" would have to
be resolved.334 Indeed, the Appellate Body appears to have considered, on an arguendo basis, that
in spite of the wording of Article 1(a)(ii), there may be circumstances in which a panel could be
justified in giving priority to the CDM used in the tables of supporting material over the guidance of
Annex 3 for products entering into the calculation of the Base Total AMS. 335 In any event, we note
that the facts of Korea – Various Measures on Beef stand in contrast to the present case : China's
tables of supporting material contain information that may well be deemed to be CDM for wheat and
rice.
7.163. For these reasons, these previous statements by the Appellate Body have to be taken with
caution, recognizing that the consequences in the difference in wording between Articles 1(a)(ii) and
1(h)(ii) were not directly addressed there.
7.164. We therefore consider that we should take " into account " the CDM, if available, when
calculating AMS in line with the wording in Article 1(a)(ii), and to give a higher priority to the wording

327 (footnote original) The New Shorter Oxford English Dictionary, (Clarendon Press, 1993), Vol. I, p. 15.
328 (footnote original) The New Shorter Oxford English Dictionary, (Clarendon Press, 1993), Vol. I, p. 15.
329 Appellate Body Report, Korea – Various Measures on Beef, para. 111.
330 Appellate Body Report, Korea – Various Measures on Beef, fn 48.
331 Appellate Body Report, Korea – Various Measures on Beef, para. 112.
332 We also note that the Appellate Body opined that the panel's reasoning was not based on this
"apparent hierarchy", but noted that rather, on the contrary, the panel considered that the constituent data
and methodology has an important role to play in ensuring that the calculation of support to any given product
is calculated in subsequent years consistently with support calculated in the base period. Appellate Body
Report, Korea – Various Measures on Beef, para. 113 and fn 49.
333 Panel Report, Korea – Various Measures on Beef, para. 812, Appellate Body Report, Korea – Various
Measures on Beef, para. 114.
334 Appellate Body Report, Korea – Various Measures on Beef, para. 114.
335 Appellate Body Report, Korea – Various Measures on Beef, para. 114. The Appellate Body went on to
state that "giving such priority would seem to be unwarranted when calculating Current AMS for a product
which did not enter into the Base Total AMS calculation." This situation does not seem to be present in this
dispute.

of Annex 3.336 In this same vein, we are of the view that both Annex 3 and the CDM should be given
equal consideration when calculating the Current Total AMS, as per Article 1(h)(ii).
7.165. We observe, however, that it may not suffice to assess the differences in the language of
Articles 1(a)(ii) and 1(h)(ii) and the practical implications arising therefrom solely through the lens
of conflict. This may end up improperly reducing the relationship between these provisions to a
hierarchical one, where the application of one seems to exclude the application of the other in its
entirety. Indeed, this may end up distorting the general conception of the calculation of Current
Total AMS under Articles 1(a)(ii) and 1(h)(ii) as being organically and inextricably linked. 337 For
these reasons, the differences in the usage of CDM for the purposes of the calculation of AMS and
Current Total AMS should not be reduced to a situation where Annex 3 completely precludes the
application of the CDM simply beca use the latter is only to be "taken into account". Assuming the
existence of a conflict ex ante, without considering the possibility of a concurrent application, seems
to us to be unwarranted.
7.4.4 Preliminary considerations in relation to China's domestic support commitments
7.4.4.1 Tables of supporting material and Member -specific domestic support-related
commitments
7.166. Before we move to discuss the parties' arguments regarding the variables of the MPS
formula, we will first address China's view on whether the tables of supporting material contain
Member-specific domestic support-related commitments.
7.167. China submits that while its tables of supporting material, as reflected in Rev.3, contain
substantial text and data, it is only those elements in Rev.3 that are implicated in the calculation of
Base Total AMS and Current Total AMS under the Agreement on Agriculture that give rise to domestic
support-related commitments. For China, this is so because only those elements are part and parcel
of the domestic support commitments that China has undertaken under its Accession Protocol. 338
According to China, these elements include the CDM reflected in the tables of supporting material
that are referred to in Articles 1(a) and 1(h) of the Agreement on Agriculture, including (i) the base
period, (ii) the fixed external reference prices, (iii) a methodology for the determination of eligible
production, and (iv) the choice between a price gap methodology or budgetary outlays for non -
exempt direct payments in Paragraph 10 of Annex 3 of the Agreement on Agriculture. For China,
these elements may also include the identification of the basic agricultural products and the years
for which AMS is calculated under Articles 1(b) and 1(i) of the Agreement on Agriculture.339
7.168. The United States, on the other hand, contends that China's argument that the Panel can
look to information contained in its tables of supporting material to identify China -specific
methodologies for identification of the FERP and the quantity of eligible produ ction (QEP),
misunderstands the relationship between the Agreement on Agriculture and a Member's Schedule
of Concessions and tables of supporting material, as well as the role and status of information
contained in these tables under the Agreement on Agric ulture.340 For the United States, the
Agreement on Agriculture provides the ways in which the information contained in a Member's tables
of supporting material may be used in the calculation of a Member's Current Total AMS, but it does
not give rise to domes tic-support-related rights and obligations in the calculation of Current Total
AMS.341 The United States contends that the Agreement on Agriculture directs the use of a Member's
tables of supporting material to glean Member -specific factual information such as identifying the
basic agricultural products in the Member's territory and definition of year for a particular programme
but that it does not create independent rights and obligations.342
7.169. We begin by recalling that our task in the present dispute is to as sess China's compliance
with its domestic support commitments under the Agreement on Agriculture. As we have stated

336 Appellate Body Report, Korea – Various Measures on Beef, para. 112.
337 Panel Report, Korea – Various Measures on Beef, para. 813.
338 China's second written submission, para. 187.
339 China's second written submission, para. 188.
340 United States' second written submission, para. 64.
341 United States' second written submission, para. 65.
342 United States' second written submission, para. 65; United States' response to Panel question Nos.
19, para. 94 and 65, paras. 70-73 (second substantive meeting).

before, this requires the Panel to calculate domestic support as provided through market price
support for rice and wheat , and as measured as Current Total AMS. These calculations are to be
done mainly on the basis of the definitions of Article 1 of the Agreement on Agriculture, which in
turn direct the Panel to use the provisions of Annex 3 and a Member's CDM. In this regard, we note
that Article 1 only mentions the tables of supporting material, which are found in Rev.3 in the case
of China, when setting out that it is the constituent data and methodology contained in those tables
that are relevant for the calculation of AMS. For this reason, we do not see the discussion of whether
the tables of supporting material give rise to domestic -support-related commitments as being a
central one in this dispute. This is so because the text of the Agreement on Agriculture is clear that
the central elements in the calculation of Current Total AMS are Annex 3 and a Member's CDM, and
not the tables of supporting material. These tables are only relevant inasmuch as they contain the
CDM, the legal status of which is not in question. Article 1 provides clear indications pertaining to its
relevance. We are also mindful that the Panel may well complete its task to provide a positive
solution to the dispute without having to reach a general and overarching conclusion on the status
of the tables of supporting material.
7.170. We also note that China's argument was clarified during the course of the proceedings.
Responding to a question by the Panel asking China to address statements made by the United
States, China noted that while the United States argued that the Agreement on Agriculture "provides
the ways in which the information contained in a Member's Supporting Tables may be used in the
calculation of a Member's Current Total AMS", it also stated that this information "does not give rise
to domestic -support related r ights and obligations". 343 For China, "[t]he [United States'] first
statement directly contradicts the second statement. Indeed, if a Member's "constituent data and
methodology" are to be used in the calculation of Current (Total) AMS, then they necessarily give
rise to domestic -support-related rights and obligations, because they affect the outcome of those
calculations."344
7.171. In our view, this comment points to the crux of China's concern, namely, that the CDM must
inform the calculation of Current Total AMS. China perceives the United States' position as depriving
the CDM from having any meaningful and specific value. This comment also allows us to disaggregate
China's general position into two components: one relating to the usage of the CDM in the
calculations of Current Total AMS and another one relating to this exercise as giving rise to domestic-
support-related rights and obligations. Regarding the first component, we have already found in
Section 7.4.3 above that CDM plays an important role in these calculations. Thus, to this extent we
agree with China. However, it does not follow that because the Agreement on Agriculture provides
for the ways in which the information contained in a Member's tables of supporting material is to be
used in the calculation of Current Total AMS the CDM or the mentioned tables necessarily give rise
to domestic-support-related rights and obligations.
7.172. Therefore, because (i) the role of the CDM in the calculations of Current Total AMS is already
clarified in Article 1 and (ii) the issue of whether the tables of supporting material contain Member-
specific domestic-support-related commitments is not essential to the resolution of this dispute, we
find that it is not necessary to come to a definitive conclusion on whether the tables of supporting
material contain Member-specific domestic-support-related commitments.345

343 China's response to Panel question No. 67 (second substantive meeting) (referring to United States'
second written submission, para. 65).
344 China's response to Panel question No. 67 (second substantive meeting).
345 China also submitted arguments on how, for non-original Members, CDM are not only part and parcel
of their domestic support commitments, but also of their "terms of accession" under Article XII:1 of the
Marrakesh Agreement (China's second written submission, Sections IV and VIII). In reply, the United States
argued that China's Schedule of Concessions, including Part IV, does not form part of China's Accession
Protocol, but rather of the Schedule of Concessions and Commitments annexed to the GATT 1994 (United
States' second written submission, para. 74). Having already clarified that the role and legal status of the CDM
is adequately defined in Article 1 of the Agreement on Agriculture, when calculating Current Total AMS, we do
not find it necessary to address these arguments.

7.4.5 Issues relating to the definition and calculation of the variables of the MPS formula
7.4.5.1 Applied Administered Price
7.173. Except for the possible processing-level adjustment (which potentially affects the AAP) in
order to utilize data values at the same stage of processing of the products (specifically rice), the
parties agree on the basic understanding of this variable . We have discussed the AAP to a limited
extent in section 7.2.2.1 above, and as mentioned, we agree with the parties that when a measure
takes the form of market price support, the AAP is a constituent element of that measure.346
7.174. The United States contends that because the Agreement on Agriculture does not define the
term "applied administered price", i t is necessary to determine the ordinary meaning of these
terms.347 The United States submits that the AAP is the price a Member dispenses or furnishes to
support a particular basic agricultural product and that Paragraph 8 of Annex 3 of the Agreement on
Agriculture also refers to "the" AAP, suggesting that this price is known and discernible.348 The United
States claims that t he AAP is thus the price the government sets or establishes and is, as such,
distinguishable from a prevailing domestic market price.349
7.175. The United States alleges that China announces for each market price support programme
the "minimum procurement price" at which designated state-owned enterprises will purchase wheat,
Indica rice, and Japonica rice .350 For the United States, t his annually announced "minimum
procurement price" constitutes an AAP because it is the known or discernible price China dispenses
or furnishes for each basic agricultural product , regardless of the price that would be other wise
determined by the market.351 The United States contends that the AAPs relevant to China's market
price support programmes for wheat, Indica rice and Japonica rice are the minimum procurement
prices identified in the annual Wheat MPS Notices and Rice MPS Notices.352
7.176. China argues that the Agreement on Agriculture does not define "the applied administrative
price", nor does it contain any specific guidance concerning the methodology to use to dete rmine
this price. As a result, China relies on the dictionary meaning of the elements of the term "applied
administered price", coupled with the CDM, as set out in Rev.3.353 China submits that the dictionary
meaning of an "administered price " refers to a price "determined not by market forces but by
administrative action (as of a large company or government)"354 and that the dictionary meaning of
"applied" includes "brought to bear, made effective, acting at a point or place".355
7.177. The Panel agrees with the parties that it would be valuable to determine the ordinary
meaning of the term "applied administered price". "Applied" is defined as "put to practical use" while
"apply" means "put to use; employ" 356, which, as the United States suggests, points to an actual,
demonstrable action. The Panel concurs with China's characteri zation of "administered" when
referring to a price as being defined as "determined not by market forces but by administrative
action (as of a large company or a government)." 357 The AAP, therefore, is the price set by the
government at which specified entities will purchase certain basic agricultural products.

346 Annex 3 of the Agreement on Agriculture, para. 8; United States' first written submission, para. 93.
347 United States' first written submission, para. 96 (referring to Shorter Oxford English Dictionary,
"applied," p. 100 (ed. 1993), Shorter Oxford English Dictionary, "administer," p. 28 (ed. 1993), Shorter Oxford
English Dictionary, "price," p. 2349 (ed. 1993), (Exhibit USA-64)).
348 United States' first written submission, para. 97.
349 United States' first written submission, para. 97.
350 United States' first written submission, para. 106.
351 United States' first written submission, para. 106.
352 United States' first written submission, para. 111.
353 China's first written submission, para. 190.
354 China's first written submission, para. 191 (referring to Oxford English Dictionary, OED Online,
"administered, adj.", available at: http://www.oed.com/view/Entry/2532? (last viewed 26 October 2017),
(Exhibit CHN-60)).
355 China's first written submission, para. 193 (referring to Oxford English Dictionary, OED Online,
"applied, adj.", available at: http://www.oed.com/view/Entry/9713? (last viewed 26 October 2017), (Exhibit
CHN-61)).
356 The New Shorter Oxford English Dictionary, definition of "applied", "apply" Vol. 1, 1993, p. 100-101.
357 Oxford English Dictionary Online, definition of "administered, adj", available at:
<http://www.oed.com/view/Entry/2532>, accessed 27 July 2018).

7.178. We note that in the measures themselves, for the years 2012 -2015, the AAP is set out for
each product and for each year358, 359. The AAP is referred to as the "minimum purchase price" within
the Chinese measures, and is defined as "x yuan per jin" where 1 jin equals 0.5 kilograms, for
standard Grade 3 product. Certain other prices are also included in the Annual Notices for Grade 1,
2, 4, and 5 product, which are either slightly higher or lower than the standard Grade 3 price, relative
to the Grade of the product. 360 Neither party indicated that the Panel should look to any of these
other prices when determining an AAP, given that the majority of grain is considered to be "standard"
Grade 3 grain.361 Thus, for the purposes of the Panel's calculations, the price for the standard Grade
3 product will be considered to be an element of China's CDM for each product.
7.179. The following table contains the relevant AAPs which will be used in the Panel's calculations:
Table 2: Wheat, Indica rice and Japonica rice AAP362
Unit: RMB/MT 2012 2013 2014 2015
Wheat 2,040 2,240 2,360 2,360
Early Indica rice 2,400 2,640 2,700 2,700
Mid-Late Indica rice 2,500 2,700 2,760 2,760
Japonica rice 2,800 3,000 3,100 3,100
7.4.5.2 Fixed external reference price
7.180. The Panel is presented with a simple choice, surrounded by a number of substantial issues,
regarding the time-period to be used to calculate the FERP: using a FERP based on the years 1986-
1988, as the United States asserts, or one based on the years 1996-1998, as China asserts.
7.181. The United States notes that pursuant to Paragraph 9 of Annex 3, the FERP "shall be based
on the years 1986 to 1988 and shall generally be th e average f.o.b. unit value for the basic
agricultural product concerned in a net exporting country and the average c.i.f. unit value for the
basic agricultural product concerned in a net importing country in the base period ." For the United
States, this reference to calculation of the average f.o.b. or c.i.f. unit value of the basic agricultural
product in the period 1986 through 1988 establishes that the FERP is one, unchanging value.363 The
United States further contends that the ordinary meaning of the te rms in "fixed external reference
price" suggest that this is an unchanging and definite price, relating to a foreign situation that is
used as the basis for comparative measurement. 364 According to the United States, this ordinary
meaning corresponds to the elements in Paragraph 9 of Annex 3 and the use of f.o.b. or c.i.f. values
relates the reference value to prices in foreign trade, rather than internal prices; the calculation of
an average unit value over a base period ensures the reference value is unchanging and definite.365
7.182. China, on the other hand, argues that a holistic reading of Annex 3 and Part IV of China 's
Schedule establishes that, in calculating AMS from China's market price support for wheat and rice,

358 See 2012 Wheat Annual Notice, (Exhibit USA-20/CHN-18B), p. 1; 2013 Wheat Annual Notice,
(Exhibit USA-21/CHN-93B); 2014 Wheat Annual Notice, (Exhibit USA-22/CHN-20B), p. 1; 2015 Wheat Annual
Notice, (Exhibit USA-23/CHN-21B), p. 1.
359 See 2012 Rice Annual Notice, (Exhibit USA-39/CHN-23B), p. 1; 2013 Rice Annual Notice, (Exhibit
USA-40/CHN-24B), p. 1; 2014 Rice Annual Notice, (USA-41/CHN-25B), p. 1; 2015 Rice Annual Notice, (Exhibit
USA-42/CHN-26B), p. 1.
360 The 2015 instruments state that "[t]he price difference between adjacent grades will be 0.02 yuan
per jin." Article 4, 2015 Wheat and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 3.
361 United States' response to Panel question No. 25, para. 105; China's response to Panel question No.
25.
362 The AAPs for wheat, Indica rice and Japonica rice used in the calculation of China's MPS for each
product are the minimum procurement prices identified in the annual Wheat MPP Notices and Rice MPP Notices,
as we found in paragraph 7.178 above. These figures were multiplied by 20 in order to derive a price per ton.
363 United States' first written submission, para. 98.
364 See Panel Report, Korea – Various Measures on Beef, para. 830 (which the United States argues
states that in instances where no import or export prices are available for a particular Member, Annex 3,
paragraph 9 permits a proxy price reflecting import or export prices between 1986 and 1988 in another
Member's market).
365 United States' first written submission, para. 100.

the FERP must be determined using the 1996-1998 period, rather than the 1986 -1988 period
identified in Paragraph 9 of Annex 3. 366 China argues that the period 1986 -1988 in Annex 3 was
meant to be used by WTO Members joining the WTO upon the conclusion of the Uruguay Round in
1994. China also claims that its use in its tables of supporting material of the 1996-1998 period to
determine China's FERP is consistent with a Technical Note by the WTO Secretariat for acceding
Members, which provides that "[i]n order to calculate a product -specific AMS for these products,
relevant tables from Supporting Tables DS:5 to DS:7 should be used" and that an "external reference
price" is to be calculated from data "normally for each of the last three years". 367 China contends
that it is not unique in having applied t he Technical Note of the Secretariat and that all of the
accessions that have taken place since the establishment of the WTO in 1995 have used base periods
other than 1986-1988 for the purposes of Supporting Table DS:5.368
7.183. Paragraph 9 of Annex 3 of the Agreement on Agriculture provides as follows:
The fixed external reference price shall be based on the years 1986 to 1988 and shall
generally be the average f.o.b. unit value for the basic agricultural product concerned
in a net exporting country and the averag e c.i.f. unit value for the basic agricultural
product concerned in a net importing country in the base period. The fixed reference
price may be adjusted for quality differences as necessary.
7.184. The plain text of this provision weighs in favour of the United States' arguments as it provides
that the "[t]he fixed external reference price shall be based on the years 1986 to 1988".369 However,
China has pointed to other important issues that the Panel needs to consider regarding how other
non-original Members, including China, have determined their FERPs in the context of market price
support. In particular, China argues that in its calculations of the Base Total AMS, as reflected in its
tables of supporting material, it did not use a FERP based on the period 1986 -1988.370 China also
contends that, as a matter of fact, all of the non-original Members have used a FERP that is not
based on the period 1986 -1988 when calculating their Base Total AMS. 371 In addition to these two
factual assertions, China also contends that there must be some sort of consistency or parallelism
between the way the Base Total AMS and the Current Total AMS are calculated under the Agreement
on Agriculture.372
7.185. For China, the fact that (i) its table of supporting material did not use a FERP based on the
years set out in Paragraph 9 of Annex 3 for the calculations of its Base Total AMS, and (ii) that all
non-original Members have not used FERPs based on the 1986-1988 time-period referred to in this
provision, coupled with the claim of an alleged requir ement of consistency between Base Total and
Current Total AMS imply that Paragraph 9 of Annex 3 should not be read as an inflexible rule. In
particular, China argues that all of these considerations imply that while the text of Paragraph 9 is
styled as a mandatory rule, the applicable context, relevant subsequent practice and the object and
purpose of the Agreement on Agriculture support a more flexible interpretation that gives room for
later-acceded Members to agree with the WTO membership, upon their accession, on FERPs from a
base period other than 1986-1988.373
7.186. We will structure our analysis of China's arguments as follows: we will begin by conducting
an assessment of the two factual claims presented by China regarding the FERPs used in the
calculation of the Base Total AMS by China and by other non-original Members. We will then move
on to assess the argument of the alleged requirement of consistency in the way Base Total and
Current Total AMS are calculated. We will then determine the FERP that should be used in the context
of this dispute to calculate China's Current Total AMS.

366 China's first written submission, paras. 172-173.
367 China's first written submission, para. 174 (referring to WTO, Handbook on Accession to the WTO,
Chapter 4.6, available at: https://www.wto.org/english/thewto_e/acc_e/cbt_course_e/c4s6p1_e.htm (last
viewed 25 October 2017), pp. 3-4 (Exhibit CHN-11) (emphasis added)).
368 China's first written submission, para. 175.
369 United States' first written submission, paras. 98-100 (referring to the language of Annex 3 to the
Agreement on Agriculture).
370 China's first written submission, paras. 51-52, 177-178.
371 China's first written submission, para. 175, Table 6; China's second written submission para. 353.
372 China's first written submission, para. 138; China's second written submission, paras. 296-302, 345.
373 China's second written submission, para. 320.

7.4.5.2.1 FERP contained in China's tables of supporting material
7.187. We will now assess China's contention that its tables of supporting material did not use a
FERP based on the period 1986-1988 in its calculations of the Base Total AMS. China argues that its
tables of supporting material, particularly in Table 1 of Appendix DS 5-4 of Rev.3, provide the data
and methodology for separate FERPs for Indica rice and Japonica rice during the base period of
1996-1998.374 China also argues that its tables of supporting material, particularly Appendix DS 5 -
3 of Rev.3, provide the data and methodology for the FERP for wheat during the base period of
1996-1998.375
7.188. We begin by noting that China's Supporting Table DS: 5, contained in Rev.3, sets out the
calculation of product-specific AMS from market price support for wheat, Japonica rice and Indica
rice, in the years 1996-1998. For each of the products and the years at issue, the table presents the
different elements of the MPS Formula, namely, an "applied administered price", an "external
reference price", and an "eligible production", as well as the results arising from the application of
the MPS Formula376:
Table 3: China's Supporting Table DS: 5 (reproduced from WT/ACC/CHN/38/Rev.3)

Description of
Basic Products
Calendar
year
"Applied
administered price"
(RMB yuan/ton)
"External reference
price"
(RMB yuan/ton)
"Eligible
production"
(1000 tons)
Total market price
support
 (million RMB yuan)
a) Wheat
1996 1480.0 1885.0 15000 -6075
1997
1480.0 1629.6 15000 -2244
1340.0 1629.6 31002 -8979
1998
1420.0 1579.8 15000 -2397
1260.0 1579.8 12956 -|44
average
b) Japonica
 Rice
1996 2200.0 3682.9 5250 -7785
1997
2200.0 2862.1 5250 -3476
1971.4 2862.1 6452 -5746
1998
2114.3 3326.9 5250 -6366
1914.3 3326.9 3290 -4647
average
c) Indica Rice
1996 2142.9 3082.1 10500 -9862
1997
2142.9 2033.0 10500 1153
1885.7 2033.0 12903 -1901
1998
1931.4 1913.9 10500 184
1734.3 1913.9 6580 -1182

7.189. Endnotes 17 and 18 to Supporting Table DS 5 elaborate on the details of the "external
reference price" contained therein. The former clarifies that wheat was a net-import product in the
1996-1998 base period, and that therefore, the external reference prices were determined by the
c.i.f. prices, on the basis of China's customs statistics. For Japonica rice and Indica rice, the endnote
states that these products were net -export products in the 1996 -1998 base period, and that
therefore, their external reference prices were determined by the f.o.b. prices, on the basis of China's
Customs statistics. Endnote 18 also clarifies the exchange rates used in the calculations.

374 China's first written submission, paras. 221 (referring to United States' first written submission,
paras. 113-116) and 269; response to Panel question No. 85.
375 China's first written submission, paras. 221 (referring to United States' first written submission,
paras. 113-116) and 269; response to Panel question No. 85.
376 WT/ACC/CHN/38/Rev.3, Supporting Table DS: 5, (Exhibit USA-43).

7.190. Endnote 17 refer to Appendices DS 5-3 and DS 5-4. These, in turn, contain further data on
the c.i.f. and f.o.b. prices for the mentioned products. Appendix DS 5 -3 contains c.i.f. Prices for
wheat and provides as follows:
Table 4: Appendix DS 5-3 (reproduced from WT/ACC/CHN/38/Rev.3)
HS Code Calendar Year Import Volume
(tons)
Import Value
(US $)
c.i.f. Price
(US $/ton)
c.i.f. Price 1/
(RMB
yuan/ton)
10011000
Wheat
1996 4512381 1023059000 226.7 1885.0
1997 1508909 296653000 196.6 1629.6
1998 1275384 243373000 190.8 1579.8
Average of
1996-98 204.7 1698.1

7.191. Appendix DS 5-4 contains f.o.b. Prices for Japonica rice and Indica rice:
Table 5: Appendix DS 5-4 (reproduced from WT/ACC/CHN/38/Rev.3)
HS Code Calendar Year Export Volume
(tons)
Export Value
(US $)
f.o.b. Price
(US $/ton)
f.o.b. Price
3/
(RMB
yuan/ton)
10063000
Japonica
Rice 1/
1996 85933.49 38066000 443.0 3682.9
1997 184650.79 63758000 345.3 2862.1
1998 140340.03 56395000 401.9 3326.9
Average of
1996-98 396.7 3290.6
10063000
Indica Rice
2/
1996 27479.28 10187000 370.7 3082.1
1997 569058.74 139571000 245.4 2033.0
1998 2761298.49 638352000 231.2 1913.9
Average of
1996-98 282.4 2343.0

7.192. From the above, we note that none of the different "external reference prices" mentioned or
used in China's tables of supporting material are based on the years 1986 -1988, referred to in
Paragraph 9 of Annex 3, but rather are based on the years 1996-1998. This is consistent with China's
characterization of its tables of supporting material.
7.193. Our above assessment of China's tables of supporting material needs to be nuanced to
recognize two important differences: (i) the difference between the base period and the FERP itself,
and (ii) the fact that China's tables of supporting material refer to an "external reference price" and
not to a fixed external reference price.
7.194. Regarding the first difference, the United States argues that a "base period" describes the
period of time for which an acceding or negotiating Member provides information as to its form and
level of domestic support to agricultural producers, and that "base period" is distinct from the "fixed
external reference price," which is one component of the calculation for market price support as set
out in Annex 3. For the United States, t he period relevant to the FERP is specifically defined in
Paragraph 9 of Annex 3, which provides that this value "shall be based on the years 1986 to 1988";
the language of this provision is mandatory and does not permit deviations. In this vein, the United
States maintains that the fact that Uruguay Round Members' typical base period coincided with the
period used for the FERP does not alter this assessment.377
7.195. The United States also claims that g iven that no explicit requirement exists with regard to
the base period in the context of domestic support, acceding Members can utilize a "base period"

377 United States' response to Panel question No. 89; United States' comments on China's response to
Panel question No. 89.

other than 1986 to 1988 when they provide domestic support info rmation as recorded in
Articles 1(a)(i) and 1(h)(i). For the United States, there is similarly no reason to reference the chosen
base period in an acceding Member 's Working Party Report or Accession Protocol, as this choice
would not represent a departure from WTO obligations. The United States also recognizes that in its
tables of supporting material, China used a base period for purposes o f domestic support of 1996-
1998, and that China also used external reference prices based on those years . According to the
United States, there is no legal basis to find that these years are appropriate for use in the calculation
of China's product-specific AMS.378
7.196. China does not believe that there is, or can be, a difference between the three-year period
used for the FERP in the calculation of Base Total AMS and the three-year period that should be used
for the FERP when calculating Current Total AMS. For China, the United States' position is flawed
because it is based on an isolated reading of the terms of Paragraph 9 of Annex 3 of the Agreement
on Agriculture and it ignores the other relevant terms of the treaty, including Articles 1(a)(ii), 1(h)(ii)
and Rev.3, their context, along with any subsequent practice, and the object and purpose of the
Agreement on Agriculture. China argues that the use of different base periods for the calculation of
Base Total AMS and Current Total AMS would result in a n "apples-to-oranges" comparison, which
would mean that domestic support measures' compliance with a Member's reduction commitments
could be a function of changes in input data and methodologies used in the calculation of AMS ,
including in the base period for the FERP, rather than a reflection of the domestic support measures
applied.379
7.197. We agree with the United States that the concept of a b ase period can be distinct from the
FERP. However, this does not mean that the two bear no connection with each other. In its simplest
form, the FERP is a price of a given product that is used as an input in the MPS Formula. In particular,
it is used to generate a price differential that is then multiplied by the QEP in order to obtain a
measurement of domestic support in the form of market price support. As prices for the same
product may change throughout the years, it is normal that price -related variables, like the FERP,
are linked to a certain time-period, i.e. to a base period in the case of the FERP. Therefore, the base
period of the FERP is nothing more than the time period for measuring the prices of a given product
and is one of the characteristics of the FERP used in the calculation of market price support.
7.198. We also agree with the United States that Paragraph 9 of Annex 3 sets out the relevant base
period for the FERP that is to be used in the calculation of Current Total AMS. However, our inquiry
should not stop here as this provision by itself does not address or explain why China's tables of
supporting material did not base their FERPs on the 1986 -1988 period. Most importantly, this
provision does not address the question of whether the Panel should attach any legal consequences
to the fact that China's tables of supporting material use a FERP that is not based on the years
provided for in Paragraph 9 of Annex 3, but on a different base period. The United States suggests
that this difference in the base periods is to be expected as there are no rules to calculate the Base
Total AMS. According to this position, Paragraph 9 of Annex 3 would only be applicable to the
calculation of Current Total AMS and not to the Base Total AMS.
7.199. The above discussion inevitably leads to the question of whether there should be any
consistency, as argued by China, between the FERP used in the calculation of Base Total AMS in
Member's tables of supporting material, and the Current Total AMS. This will be explored in Section
7.4.5.2.3 below. For the purposes of this Section, it is sufficient for us to say that the main difference
between the FERP contained in China's tables of supporting material and the one set out in Paragraph
9 of Annex 3 is the different base period.380
7.200. Regarding the second issue, we recall that the United States argues that China's calculation
of its Base Total AMS was not based on a fixed external reference price or the values drawn from
Appendix DS 5-3 or Appendix DS 5-4 of its tables of supporting material. The United St ates claims
that the fifth column of supporting table DS 5 is labelled "external reference price" and not "fixed"

378 United States' response to Panel question No. 89.
379 China's response to Panel question No. 89.
380 The United States has argued that there is another difference relating to whether the prices are a
result of a three-year average. We will address this below.

external reference price; and the values contained in that column reflect three different prices, one
for each year.381
7.201. We see two dimensions to the United States' argument: one relating to the difference in the
terminology between a "fixed" external reference price and an "external reference price" and another
one relating to the characteristics of the prices contained in China's tables of suppo rting material,
and in particular, to the ones used in the calculations of its Base Total AMS.
7.202. Regarding the first dimension, we fail to see how the difference in the terminology could
have any bearing on the substance of the FERP. In this connection, we agree with China that where
the data reflects external reference prices that are fixed or anchored in a particular time-frame and
are used for the calculation of market price support, it is immaterial whether the label "reference
price" or "external reference price" or "fixed external reference price" is used to describe the element
of the AMS calculation for market price support that Paragraphs 8 and 9 of Annex 3 identify as the
"fixed external reference price".382
7.203. As to the second dimension, we note that China's tables of supporting material contain two
sets of external reference prices that inform the AMS from market price support calculations set out
therein: the ones reflected in China's Supporting Table DS:5, which do not appear to contain an
average of the period 1996-1998 but rather yearly prices for each of the already mentioned products,
and the ones contained in Appendices DS 5-3 and DS 5-4, which do contain an average of the period
1996-1998. In this regard, we agree with the United States that the "external reference prices" set
out in China's Supporting Table DS:5 are not the result of an average of the years 1996 -1998, but
rather yearly prices for each of those years. However, Appendices DS 5 -3 and DS 5 -4 do contain
"external reference prices" that use an average for that period and that also comport with the f.o.b.
or c.i.f. rules set out in Paragraph 9 of Annex 3.
7.204. For these reasons, we observe that China's tables of supporting material do contain a three-
year average of the "external reference prices" that follow the same guidelines set out in Paragraph
9 of Annex 3 but for the 1996-1998 time-period. Indeed, Appendix DS 5-3 and Appendix DS 5 -4,
which expand on the information of the "external reference price" used in table DS :5, contain the
mentioned data. For these reasons, we conclude that China's tables of supporting material contain
the necessary information to source a FERP based on an average of the period 1996-1998.
7.4.5.2.2 Other Members' tables of supporting material
7.205. We now move to assess China's contention that when calculating their Base Total AMS, all
of the non-original Members have used base periods other than 1986 -1988 for the purposes of
Supporting Table DS:5.383
7.206. In this regard, China presented a table which purported to p rovide information on the
benchmark period used in calculating product -specific AMS from market price support, and the
accompanying WTO documents containing this information.384
7.207. The United States argues that while 36 newly acceding Members used alternative b ase
periods, only 10 used alternative FERPs and that t his does not amount to a consistent practice. 385
The United States explains that these Members were Saudi Arabia, Jordan, Croatia, Lithuania, China,

381 United States' opening statement at the second meeting of the Panel, paras. 30-31. We note that the
United States' argues that to calculate the value of market price support during its base period, China utilized
external reference prices reflecting the annual average f.o.b. or c.i.f. commodity price for 1996, 1997, and
1998, individually, and that, consequently, China's calculation of its Base Total AMS was not based on a "fixed
external reference price" or the average values drawn from Appendix DS 5-3 or Appendix DS 5-4 of its
Supporting Tables. For the United States, instead, China's market price support calculations for wheat, Indica
rice, Japonica rice, and corn in its DS 5 Supporting Table used three different, annual "external reference
price[s]" corresponding to each year of the base period, and that China did not establish a single, fixed,
reference price that it used in calculating market price support for every year. United States' response to Panel
question No. 74 (second substantive meeting).
382 China's response to Panel question No. 64 (second substantive meeting).
383 China's first written submission, para. 175.
384 China's first written submission, para. 175.
385 United States' first written submission, fn 120.

Chinese Taipei, Viet Nam, Russia, Lao, and Kazakhstan.386 These Members are listed in bold in Table
6, below.
7.208. The United States further contends that n ine of these Members compared AAPs to annual
external reference prices for the same year . That is, they did not calculate and apply an average
external reference price for a time period to compare to the AAP for a given year. The United States
also notes that o ne acceding Member, Chinese Taipei, used an average external reference price
based on years other than 1986-1988 in its Table DS 5. The United States further notes that Bulgaria
also maintained market price support at the time of accession, but used an external reference price
based on the years 1986 to 1988 in its Total AMS calculations.387 For the United States, this review
provides yet further evidence that there is neither context in Members' Schedules, nor a "practice"
that supports the use of a time period other than that set out in Paragraph 9 of Annex 3 for purposes
of calculating current AMS and Current Total AMS.388
7.209. After carefully reviewing the parties' arguments and evidence and the tables of supporting
material of non-original Members, the Panel has produced the following table summarizing its factual
findings:
Table 6: Factual findings on non-original Members
Acceded
Member (in
alphabetical
order)
Date of
accession
Base
period
used389
Supporting
document
Notes
Afghanistan 29 July 2016 2009-2011 WT/ACC/SPEC/AF
G/2

Albania 8 September
2000
1996-1998 WT/ACC/SPEC/AL
B/4/Rev.4

Armenia 5 February 2003 1995-1997 WT/ACC/SPEC/AR
M/4/Rev.2

Bulgaria 1 December 1996 1986-1988 G/AG/AGST/Vol.5 Uses data from the years 1986-88.
Although the base period for Bulgaria
corresponds to that of the Uruguay
Round, Bulgaria's Working Party Report
notes that "an earlier period than the
most recent three year period was
accepted by WTO Members only because
the latter was not regarded as
representative due to the United Nations
embargo applied to the former Republic of
Yugoslavia". See WT/ACC/BGR/5, p. 23.
Includes MPS for the base period.
Cambodia 13 October 2004 1998-2000 WT/ACC/SPEC/KH
M/3/Rev.2

Cape Verde 23 July 2008 2003-2005 WT/ACC/SPEC/CP
V/1/Rev.4

China 11 December
2001
1996-1998 WT/ACC/CHN/38/
Rev.3
Includes MPS for the base period.
Croatia 30 November
2000
1996-1998 WT/ACC/SPEC/HR
V/1/Rev.3
Croatia uses a special methodology for
calculation of domestic support, as the
Danube Region had been occupied during
1996-1997, and thus data for the whole of
Croatia was not available until 1998.

Ecuador 21 January 1996 N/A G/AG/AGST/ECU Ecuador reports that it was not using
domestic support subject to reduction
commitments and thus no years are
specified.
Estonia 13 November
1999
1995-1997 WT/ACC/SPEC/ES
T/4

386 United States' response to Panel question No. 90.
387 United States' response to Panel question No. 90 (referring to Bulgaria's Supporting Table,
G/AG/AGST/Vol.5, p. 7).
388 United States' response to Panel question No. 90.
389 This column describes the time-period used by Members to report information relative to agricultural
subsidies. It is not limited to market price support measures.

Acceded
Member (in
alphabetical
order)
Date of
accession
Base
period
used389
Supporting
document
Notes
Georgia 14 June 2000 1996-1998 WT/ACC/SPEC/GE
O/2/Rev.1

Jordan 11 April 2000 1994-1996 WT/ACC/SPEC/JO
R/2/Rev.3
Includes MPS for the base period.
Kazakhstan 30 November
2015
2010-2012 WT/ACC/SPEC/KA
Z/6/Rev.14
Includes MPS for the base period.
Kyrgyz
Republic
20 December
1998
1994-1996 G/AG/AGST/KGZ
Lao 2 February 2013 2001-2003 WT/ACC/SPEC/LA
O/1/Rev.1
Includes MPS for the base period.
Latvia 10 February 1999 1994-1996 WT/ACC/SPEC/LV
A/2

Liberia 14 July 2016 2011/2012-
2013/2014
WT/ACC/SPEC/LB
R/1/Rev.1

Lithuania 31 May 2001 1995-1997 WT/ACC/SPEC/LT
U/7/Rev.3
Lithuania notes that data from the year
1998 is included for "for information only".
1998 is not listed in the reporting period.
Includes MPS for the base period (and for
1998 "only for information").
Macedonia 4 April 2003 1998-2000 WT/ACC/SPEC/80
7/5/Rev.2
Includes MPS for the base period.
Moldova 26 July 2001 1996-1998 WT/ACC/SPEC/M
OL/1/Rev.8

Mongolia 29 January 1997 N/A G/AG/AGST/MNG Only "de minimis" is listed under the
heading "domestic support". No years are
listed.

Montenegro 29 April 2012 2005-2007 WT/ACC/SPEC/CG
R/1/Rev.2

Nepal 23 April 2004 1995/1996-
1997/1998
WT/ACC/SPEC/NP
L/2/Rev.1
Though Nepal has no market price
support measures, it specifies the
"External reference price" as
corresponding to "(Average 1996-1998)"
in Table DS:5.

Oman 9 November 2000 1994-1996 WT/ACC/SPEC/O
MN/2/Rev.2

Panama 6 September
1997
1991-1993 G/AG/AGST/PAN
Russia 22 August 2012 2006-2008 WT/ACC/SPEC/RU
S/39
Includes MPS for 2008 only (using average
export prices for the period of 2006-2008).
Samoa 10 May 2012 2005/2006-
2008/2009
and
2002/2003-
2007/2008
for DS:4
WT/ACC/SPEC/SA
M/3/Rev.4
Samoa's reporting period ranges from
"2005/2006-2008/2009", (a 4 year
period); in its tables of supporting
material, DS4 which summarizes the
calculation of Total AMS, Samoa reported
that it "had no product -specific measures
in the reference period" for 20 02/2003-
2007/2008 (a 6-year period).
Saudi Arabia 11 December
2005
2001-2003 WT/ACC/SPEC/SA
U/1/Rev.10
Includes MPS for the base period.
Seychelles 26 April 2015 2010-2012 WT/ACC/SPEC/SY
C/4/Rev.2

Chinese
Taipei
1 January 2002 1990-1992 WT/ACC/SPEC/TP
KM/4/Rev.3
An apparent deviation from the most
recent three-year period principle was
agreed for Chinese Taipei (1990-1992).
However, Chinese Taipei also agreed to
reduce its Total AMS commitments over
the period 1995-2000, i.e. prior to
accession. Thus, the final bound
commitment level (year 2000) is 20 per
cent less than the Base Total AMS (1990-
1992) for Chinese Taipei. See
WT/ACC/10/Rev.4.
Includes MPS for the base period (i.e.
1990-1992)

Acceded
Member (in
alphabetical
order)
Date of
accession
Base
period
used389
Supporting
document
Notes
Tajikistan 2 March 2015 2008-2010 WT/ACC/SPEC/TJ
K/3/Rev.5

Tonga 27 July 2007 1996/1997-
1998/1999
WT/ACC/SPEC/TO
N/3/Rev.3

Ukraine 16 May 2008 2004-2006 WT/ACC/SPEC/UK
R/1/Rev.12
Includes MPS for the base period.
Vanuatu 24 August 2012 2006-2008 WT/ACC/SPEC/VU
T/6/Rev.3
Uses the term "representative period".
Viet Nam 11 January 2007 1999-2001 WT/ACC/SPEC/VN
M/3/Rev.7
Includes MPS for the base period.
Yemen 26 June 2014 2006-2008 WT/ACC/SPEC/YE
M/1/Rev.2

7.210. From the above, we observe that the majority of the 36 non-original Members reported the
use of domestic support during the years preceding their accession; only four Members 390 made a
reference (direct or indirect) to the years used in their tables of supporting material as the "base
period", rather than the "reporting peri od". This stems from using a standard template to provide
factual information on the domestic support actually in place in agriculture, upon which all tables of
supporting material submitted as part of a Member's accession are based. Finally, a number of
Members have explicitly linked the years used in their tables of supporting material to the (fixed)
external reference price ( outside of Table DS:5 itself). 391 Out of these 36 Members, only one
(Bulgaria) used a period of 1986 -88 (see Table 6 above); Bulgaria's Working Party Report notes
nevertheless that this "earlier period than the most recent three year period was accepted by WTO
Members only because the latter was not regarded as representative due to the United Nations
embargo applied to the former Republic of Yugoslavia."392
7.211. Following the United States' assertion that "[w]hile 36 newly acceding Members used
alternative base periods, only 10 used alternative fixed external reference prices ", the Panel asked
the United States to list each of the 10 Members who had allegedly used alternative FERPs. The
United States responded by listing 10 Members that maintained MPS measures at the time of their
accession.393 The implication of its response is that it is only those Members which maintained MPS
measures at the time of their accession which have used an alternative period for the FERP
specifically, rather than just a different base period. China's argument in this regard was that "all of
the accessions that have taken place since the establishment of the WTO in 1995 have used base
periods other than 1986-88 for the purposes of Supporting Table DS:5"394 and this is what Table 6
of its first written submission reflects.395 Implicit in that argument is the notion that the base period
specified in a Member's tables of supporting material is always to be used in determining the FERP
should a Member decide to use market price support. The United States' position appears to be that
there is a fundamental difference between the base period and the years used for determining the
FERP, where one does not necessarily directly correspond to the other.
7.212. We note that 12 out of the 36 non-original Members reported the use of market price support
during the base period. All these 12 Members also provided annual "external reference prices" for
the products benefitting from this support for the very same base period and used them to calculate
the base period market price support. The base period averages of the c.i.f. or f.o.b. prices were
explicitly reported by all but four Members (Jordan, Lao, Lithuania, Ukraine). Among those explicitly
reporting the average prices, six did so in the Supporting Table DS:5 (Bulgaria, FYROM, Kazakhstan,
Russia, Saudi Arabia, Viet Nam), and two in an appendix table or in an attachment (China, Chinese
Taipei). Hence, while the ways of reporting different components of a FERP have varied, all Members
reporting MPS for their base period provided the necessary data to derive the FERP (c.i.f. or f.o.b.
prices depending on whether the Member was a net importer or net exporter of the product in
question during the base period).

390 China, Jordan, Lao, Moldova.
391 China, Croatia, Kazakhstan, Lithuania, Russia, Saudi Arabia, Chinese Taipei, Ukraine.
392 Bulgaria's working party report, WT/ACC/BGR/5, p. 23.
393 United States' response to Panel question No. 90.
394 China's first written submission, para. 175. (emphasis added)
395 China's first written submission, Table 6.

7.213. As discussed in paragraph 7.197 above , t he Panel does not consider the United States'
position that the FERP is entirely divorced from the concept of the base period to be accurate. It is
clear, and the United States accepts, that where a Member d id maintain MPS during its accession,
the years used as a base period were the years also used in determining the FERP for the calculation
of the base period MPS. Regardless, the fact remains that , with the exception of Bulgaria, Ecuador
and Mongolia (see Table 6 above), each acceding Member has explicitly used a base period other
than 1986-1988, and where those Members maintained MPS measures, the FERP was based on
those same years. In other words, the base period in Paragraph 9 of Annex 3 has not been used to
calculate the FERPs reflected in those Members' tables of supporting material.
7.214. For the foregoing reasons, we conclude that none of the 36 Members that have acceded to
the WTO since 1995 used a base period of 1986-1988 with the exception of Bulgaria for which "the
most recent three year period" was not regarded as representative by WTO Members due to the
United Nations embargo applied to the former Republic of Yugoslavia. This fact provides important
context in which to interpret China's Schedule, which must be kept in mind throughout the Panel's
analysis of the FERP and the appropriate period to use in this case (discussed in detail in Section
7.4.5.2.4 below).
7.4.5.2.3 Consistency in the calculations of Base Total AMS and Current Total AMS
7.215. In this section, we will address China's assertion that there must be consistency in the way
Base Total AMS and Current Total AMS are calculated.
7.216. We will structure our analysis in three parts: we will begin by addressing China's contention
that a requirement of consistency stems from the provisions of the Agreement on Agriculture. We
will then assess China's argument that the existence of this requirement is further supported by the
goal of achieving reduction commitments under the Agreement on Agriculture. We will lastly address
China's arguments regarding the object and purpose of the Agreement on Agriculture and the
consistency requirement.
7.217. China first submits the United States fails to recognize that Articles 1(a) and 1(h) of the
Agreement on Agriculture require that Base Total AMS and Current Total AMS be calculated including
by reference to the same Member-specific CDM. In particular, China argues that subparagraph (i) of
each provision refers to a Member's CDM for the calculation of Base AMS (Article 1(a)(i)) and Base
Total AMS (Article 1(h)(i)) during the base period and that subparagraph (ii) of each provision then
refers to th e same CDM for calculating current AMS (Article 1(a)(ii)) and Current Total AMS
(Article 1(h)(ii)) during any subsequent year. For China, the same CDM, including the same FERPs
and the same methodology for determining eligible production, must be used to calculate both Base
Total AMS and Current Total AMS.396
7.218. The United States contends that the Base Total AMS is an historical reflection of the
Member's provision of domestic support at the time of the Uruguay Round or accession and notes
that for the purpose of domestic support commitments neither the Agreement on Agriculture nor
the Marrakesh Agreement defines the "base period" for Uruguay Round or acceding Members.397 The
United States also claims that both Articles 1(a) and 1(h) assign a specific degree of consideration
to the text of the Agreement and a Member 's CDM. The United States argues that Article 1(a)
provides in subparagraph (i) that "with respect to support provided during the base period," AMS is
"specified in the relevant tables of supporting material incorporated by reference in Part IV of a
Member's Schedule" and that this indicates where country-specific reference information regarding
the annual level of support in favour of basic agricultural producers in the base period may be found
but it does not prescribe a calculation methodology for either the "base period" or for later years.398

396 China's second written submission, para. 298.
397 United States' response to Panel question No. 71 (first substantive meeting).
398 United States' response to Panel question No. 79. Regarding Article 1(h), the United States argues
that this provision provides a similar formulation in that subparagraph (i) states that Base Total AMS is the
sum of all "support provided during the base period" and that subparagraph (ii) further specifies where
information may be found and this language does not propose a particular calculation methodology for either
the base period or for a subsequent period. The United States also argues that in both Article 1(a) and 1(h),
subparagraph (i) is juxtaposed with subparagraph (ii) which provides specific directions for calculating the

7.219. According to China, the consistency requirement is enshrined in Article 1 of the Agreement
on Agriculture. For China, this is so because Articles 1(a) and 1(h) allegedly refer to the same CDM
when setting out how the Base total AMS and the Current Total AMS are to be calculated. As a
consequence, use of the same CDM in the calculation of both measurements of domestic support
brings about the consistency requirement.
7.220. Article 1(a)(i) does not mention how to calculate the base AMS nor does it draw any
connection to the CDM. It merely refers to: "… support provided during the base period specified in
the relevant tables of supporting material incorporated by reference in Part IV of a Member's
Schedule" (emphasis added).399 The provision does not refer to the CDM, but only to the tables of
supporting material. Similarly, Article 1(h)(i) makes no reference to the CDM but only to Part IV of
a Member's Schedule. In particular, it refers to the Base Total AMS that is " specified in Part IV of a
Member's Schedule".
7.221. We thus agree with the United States that Article 1 of the Agreement on Agriculture does
not set out any rules or calculation methodology for either the "base period" or for later years.400 As
such, Article 1 only indicates that the Base Total AMS is specified in the tables of supporting material
but does not provid e for how this Base Total AMS was meant to be calculated there. Indeed, the
Appellate Body has already arrived at the same conclusion.401 Since this provision does not establish
any calculation methodology for the Base Total AMS, we fail to see how it can, by itself, enshrine a
consistency requirement as China claims.
7.222. We, however, disagree with the United States' argument that the Agreement on Agriculture
sets out no rules or guidance to calculate Base Total AMS. 402 In our view, as we will explain below,
there are other provisions relevant in this matter.
7.223. In this connection, we note Paragraph 5 of Annex 3 of the Agreement on Agriculture, which
provides as follows:
The AMS calculated as outlined below for the base period shall constitute
the base level for the implementation of the reduction commitment on
domestic support. (Underline added)
7.224. Similarly, Articles 1(a)(i) and 1(h)(i) of the Agreement on Agriculture provide respectively
as follows:

respective components of the domestic support analysis "during any year of the implementation period and
thereafter." The United States thus submits that contrary to China's suggestion, Articles 1(a) and 1(h) do not
require that Base Total AMS and Current Total AMS be calculated including by reference to the same Member-
specific constituent data and methodology, but rather, that the text of the Agreement on Agriculture provides
that CDM characteristic of that Member as "used" by the Member in the calculation of Base Total AMS should
be taken into account or considered when calculating current product-specific AMS or Current Total AMS.
399 Agreement on Agriculture, Article 1(a)(i).
400 United States' response to Panel question No. 79.
401 "However, with respect to the other side of a hypothetical equation, the relevant treaty provisions do
not provide for any particular mode of calculation of the 'Base Total AMS', from which figure the commitment
levels for particular years of the implementation period are arithmetically derived. Article 1(a)(i) of the
Agreement on Agriculture dealing with AMS states that 'with respect to support provided during the base
period', a treaty interpreter needs only to go to 'the relevant tables of supporting material incorporated by
reference in Part IV of a Member's Schedule … '. (emphasis added) Similarly, Article 1(h)(i) dealing with Total
AMS, states that 'with respect to support provided during the base period (i.e., the 'Base Total AMS') and the
maximum support permitted to be provided during any year of the implementation period or thereafter (i.e.,
the 'Annual and Final Bound Commitment Levels')', a treaty interpreter needs only to go to what is 'specified in
Part IV of a Member's Schedule … '. (emphasis added) Thus, for purposes of determining whether a Member
has exceeded its commitment levels, Base Total AMS, and the commitment levels resulting or derived
therefrom, are not themselves formulae to be worked out, but simply absolute figures set out in the Schedule
of the Member concerned. As a result, Current Total AMS which is calculated according to Annex 3, is
compared to the commitment level for a given year that is already specified as a given, absolute, figure in the
Member's Schedule." Appellate Body Report, Korea – Various Measures on Beef, para. 115.
402 United States' response to Panel question No. 79.

[W]ith respect to support provided during the base period, specified in the relevant
tables of supporting material incorporated by reference in Part IV of a Member's
Schedule… (emphasis added)
[W]ith respect to support provided during the base period (i.e. the "Base Total AMS")…
(emphasis added)
7.225. We asked the parties whether the term "base period" in the cited provisions is referring to
the same measurement of domestic support, i.e. Base Total AMS, or i f not, to what other
measurement of domestic support and "base period" each of these provisions would be referring.
7.226. The Unite d States recognizes that indeed, these provisions are referring to the same
measurement of domestic support. The United States argues that the "'base period' referred to in
Articles 1(a) and 1(h), as well as Annex 3, Paragraph 5, is likely the same or simi lar base period
used by a Member to disclose the types of support provided and calculate the value of support in
their tables of supporting material. 403 However, the United States submits that as indicated in the
text of those provisions, this is an historic al value set out in a Member's supporting material or
Schedule.404 The United States also argues that Paragraph 5 of Annex 3 refers to the base level for
implementation of "reduction commitments", but that China did not make any reduction
commitments in its Schedule or Accession Protocol, and therefore Paragraph 5 would not appear to
have applied to China at any point. For the United States, Paragraph 5 does not contain any ongoing
commitment regarding the calculation of the level of domestic support during the base period, and
even where an acceding Member should have calculated its Base Total AMS consistent with Annex
3, failure to comply with this requirement is of no consequence during subsequent years.405
7.227. In short, the United States argues that the commitments to maintain levels of "domestic
support in favour of agricultural producers expressed in terms of Current Total AMS … "406 and to
calculate product -specific AMS and Current Total AMS "in accordance with " the Agreement on
Agriculture, including Annex 3 and Article 6407, apply whether or not the Base Total AMS "contained
errors or was calculated inconsistently with Annex 3".408
7.228. China claims that this provision explains that Annex 3 also serve s as a framework for the
calculation of Base AMS in a Member's Supporti ng Tables, and that a s a result, a Member 's Base
AMS, as calculated in a Member's tables of supporting material, will generally reflect the framework
set out in Annex 3.409 For China, Paragraphs 5-13 of Annex 3 explicitly provide guidance in the form
of a framework for a Member to calculate its Base Total AMS and they provide the same guidance
for purposes of calculating Current Total AMS.410
7.229. In the Panel's view, the text of Paragraph 5 indicates that the AMS calculated as outlined in
Paragraphs 5-13 of Annex 3 for the base period, th at is, the Base Total AMS, shall constitute the
base level for the implementation of the reduction commitment on domestic support. This rebuts
the United States' argument that nothing in the Agreement on Agriculture provides guidance for the
calculation of the Base Total AMS. Importantly, Paragraphs 6 -13 of Annex 3 provide the same
guidance for calculating Current Total AMS. This indicates that the methodologies for the calculation
of both types of measurements are similar, supporting China's argument of consistency.

403 United States' response to Panel question No. 102.
404 United States' response to Panel question No. 102.
405 United States' response to Panel question No. 102.
406 United States' response to Panel question No. 102 (referring to Agreement on Agriculture,
Article 6.3).
407 United States' response to Panel question No. 102 (referring to Agreement on Agriculture,
Articles 1(a)(ii) and 1(h)(ii)).
408 United States' response to Panel question No. 102.
409 China's comments on the United States' response to Panel question No. 62 (second substantive
meeting).
410 China's comments on the United States' response to Panel question No. 62 (second substantive
meeting).

7.230. We therefore agree with China that the calculation of Base Total AMS does not occur in a
legal vacuum411, absent any guiding rules, but that the text of the Agreement on Agriculture contains
provisions pertaining to this calculation.
7.231. We are nonetheless mindful that concluding the above does not automatically confirm the
existence of a consistency requirement in the Agreement on Agriculture. Indeed, the calculation of
the Base Total AMS is part of a negotiating process amo ng Members and the acceding candidate.
For this reason, even if Paragraphs 5 to 13 seem to equally apply to the calculations of both the
Base Total and the Current Total AMS, there might be a difference arising from the negotiation
process resulting in a difference in the methodologies for these measurements of domestic support.
What can be concluded from the above is that the similar ways in which these measurements are
meant to be calculated pursuant to the Agreement on Agriculture lends strong support to the idea
that there should be some broad correspondence in methodology used in both calculation processes.
7.232. We note that the United States argues that Paragraph 5 of Annex 3 refers to the base level
for implementation of "reduction commitments", and that China did not make any reduction
commitments in its Schedule or Accession Protocol. 412 We understand this argument to imply that
even if this provision sets out rules on how to calculate the Base Total AMS, it would not apply to
China as it did not undertake any reduction commitments. As this argument directly relates to
China's second contention, we will examine its merits below when addressing China's second
argument.
7.233. In conclusion, we find that while Article 1 does not contain guidance on how to calculate the
Base Total AMS, Paragraph 5 of Annex 3 does set out important rules in this regard. Importantly,
Paragraphs 6-13 of Annex 3 are also applicable to the calculation of the Current Total AMS. This
implies that as per the Agreement on Agriculture, the calculation processes of both the Base Total
and current AMS are similar. This similarity gives strong support to the notion that there must be
consistency in the way these measurements of domestic support are calculated. Importantly, we are
of the view that failing to recognize that the Agreement on Agriculture provides for a similar
calculation process for both types of measurements might end up in a comparison between apples
and oranges, as China suggests.
7.234. We now assess China's second argument.
7.235. China submits that the United States negates the need for consistency in the CDM used for
the calculation of Base Total AMS, and the CDM that needs to be used for the calculation of Current
Total AMS, by referring to the calculation of Base Total AMS as being of historical interest only. 413
However, China argues, the goal of achieving "reductions"414 of domestic support under the domestic
support commitments requires consistency in the calculation of Base Total and Curren t Total AMS
because if the data and methodology for the calculation of Current Total AMS differed from those for
Base Total AMS, a reduction of domestic support may not flow from reduced support, but from
variations in the CDM used for the calculations. Ch ina thus submits that both are necessarily and
inextricably linked, if AMS calculations are not "destined to become meaningless apples -to-oranges
comparisons that reveal nothing about actual reductions in domestic support".415
7.236. The United States argues that in determining whether the Member has complied with its
reduction commitments, application of the same methodology to the same program me as was
calculated during the base period would be appropriate, as the Member 's reduction commitments
were directly tied to the level of support provided during the base period. The United States submits,
however, that the same cannot be said for the calculation of Current Total AMS where no reduction
commitments we re made or continue to operate . The United States further holds that the
methodologies used to calculate a programme during the base period would not be deferred to by a
panel where calculation of the Current Total AMS does not involve the same programmes, as is the

411 China's comments on the United States' response to Panel question No. 62 (second substantive
meeting).
412 United States' response to Panel question No. 102.
413 China's second written submission, para. 300 (referring to United States' response to Panel question
No. 71 (first substantive meeting), paras. 184-188).
414 China's second written submission, para. 301.
415 China's second written submission, para. 301.

case in the present dispute. 416 The United States also claims that China has no reduction
commitments and has an ongoing Final Bound Commitment Level of nil.417
7.237. At the centre of China's argument and the United States' rebuttal is the concept of domestic
support reduction commitment s and whether China has indeed undertaken such reduction
commitments. The United States does not negate the appropriateness of ensuring consistency for
assessing compliance with reduction commitments. It, however, maintains that China has no
reduction commitments but rather an ongoing Final Bound Commitment Level of nil.418 It thus follows
that the legal issue before the Panel relates to the nature of China's commitment s and whether an
assessment of its compliance will require calculating the Current Total AMS consistently with how
the Base Total AMS was originally calculated.
7.238. Underlying the United States' argument is the notion that the Agreement on Agriculture
distinguishes between domestic support reduction commitments, whereby a Member is required to
reduce its (non-zero) AMS commitment (starting from the base level) to a final bound total AMS
level at the end of the implementation period, and domestic support commitments that from the
beginning are set to nil (like in the case of China) and therefore have n o reduction implementation
period. We agree with the United States that conceptually there is a difference between a
commitment that binds a Member to progressively reduce domestic support until it reaches a certain
level, and a commitment that binds a Mem ber to limit domestic support to a nil level where a
reduction period is not needed. However, we fail to see any express support for this alleged
difference in the types of domestic support commitments in the Agreement on Agriculture.
7.239. Article 6.1, which is titled "Domestic Support Commitments", provides that the "domestic
support reduction commitments" of each Member contained in Part IV of its Schedule shall apply to
all of its domestic support measures (with the exception of domestic measures which are not subject
to reduction and in Annex 2 to the Agreement on Agriculture) and that the commitments are
expressed in terms of Total Aggregate Measurement of Support and "Annual and Final Bound
Commitment Levels". Similarly, Article 6.3 establishes that a Member shall be considered to be in
compliance with its "domestic support reduction commitments" in any year in which its domestic
support in favour of agricultural producers expressed in terms of Current Total AMS does not exceed
the corresponding "annual or final bound commitment level specified in Part IV of the Member's
Schedule". We note that the above provision speaks only of one kind of commitment and does not
give any basis to argue that there are different types of commitments, as the United States se ems
to suggest.
7.240. The above provision s do not suggest that a domestic support commitment that from the
beginning is set at nil with no reduction period, such as China's, and a commitment that requires a
Member to progressively reduce support to a fixed level (which may also be a fixed level of nil) are
legally different. Indeed, we note that after the end of the implementation period, there would not
be any difference between these two alleged types of commitments except for the level itself, which
would have been a result of the negotiation process among Members. This strongly weighs against
the United States' proposition.
7.241. We also agree with China that the United States' argument seems to be at odds with its
general position in this dispute. 419 If we were to agree with the United States that China's
commitment is not a domestic support reduction commitment420, then it would be difficult to sustain
the proposition that the domestic support disciplines under Articles 3.2 and 6.3 would apply to China,
resulting in a likely dismissal of the United States' claim under these provisions. This is so because
Article 6.3 refers to "reduction commitment" and would potentially not cover an ongoing Final Bound
Commitment Level o f "nil". Following the United States' logic, as China has not undertaken
"reduction commitments", but an ongoing Final Bound Commitment Level of "nil", these provisions
would not seem to apply. This result would be in direct opposition to the United States' general
claims in this dispute. To us, this indicates that the difference that the United States is drawing is
supported neither by the text nor the design of the Agreement on Agriculture.

416 United States' second written submission, para. 71.
417 United States' response to Panel question No. 75.
418 United States' response to Panel question No. 75.
419 China's comments on the United States' response to Panel question No. 75.
420 United States' response to Panel question No. 75.

7.242. For these reasons, we reject the United States' characterization of China's domestic support
commitments as falling outside the scope of the domestic support commitments that Article 6.1
refers to. We find that China has an ongoing domestic support commitment set at the level of nil.
7.243. Having found this, and noting that t he United States also agrees with the necessity of
ensuring some consistency in the calculations, we agree with China that the assessment of whether
a Member has complied with its reduction commitments seems to presuppose that the Current Total
AMS is calculated consistently with the manner in which the Base Total AMS was calculated. This is
so because Base and Current Total AMS are meant to provide a measurement of the actual domestic
support that Members are granting . If no consistency was kept in this pr ocess, any differences
between the Base and Current Total AMS when assessing a Member's compliance with its domestic
support commitments could be the result of differences in the methodology applied to construct the
AMS values and not of the actual domestic support measures applied by a Member. This could lead
to a situation where the resulting differences in the values are a result of the dissimilar mathematical
process applied, and not in the actual provision of domestic support by Members. This, in turn, could
lead to an apples -to-oranges comparison as the AMS values to be compared would be based on
different calculation processes.421 To us, the above runs contrary to the object and purpose of the
Agreement on Agriculture of ensuring substantial progressive reductions in agricultural support and
protection.422
7.244. In this connection, we note that the panel in Korea – Various Measures on Beef opined that
"[i]n the calculations o f product specific support the ' constituent data and methodology' has an
important role to play in ensuring that the calculation of support to any given product is calculated
in subsequent years consistently with support calculated in the base period ".423 We agree with this
statement and note that the existence of the consistency requirement ca n also be observed in the
incorporation of the CDM in the definitions of AMS and Current Total AMS in Article 1. The CDM that
is contained in a Member's supporting table, and that reflects parts of the calculation process of the
Base Total AMS, is meant to be used when calculating the Current Total AMS as set out by the
Agreement on Agriculture. To us, this implies that both measurements of domestic support have
certain commonalities in the way they are calculated. The CDM thus appears to be the link between
the two of them.
7.245. The United States acknowledges the panel's statement in Korea – Various Measures on Beef
in this regard, but argues that this statement, and those of the Appellate Body in the same dispute,
do not suggest that the role of constituent da ta and methodology in ensuring consistency could
supersede the obligations set out in Annex 3.424
7.246. In this connection, we observe that the Appellate Body in that dispute does not seem to
have done other than to note the above-mentioned Panel statement in a footnote.425. However, it
did make other statements that are relevant to the present dispute and have been used by the
United States to support its position. In particular, the Appellate Body stated that:
Thus, for purposes of determining whether a Member has exceeded its commitment
levels, Base Total AMS, and the commitment levels resulting or derived therefrom, are
not themselves formulae to be worked out, but simply absolute figures set out in the
Schedule of the Member concerned. As a result, Current Total AMS which is calculated
according to Annex 3, is compared to the commitment level for a given year that is
already specified as a given, absolute, figure in the Member's Schedule.426
7.247. China argues that the cited passage supports its view that consistency/parallelism is required
in the calculation of Base Total AMS, which serves as the basis for domestic support reduction
commitments, and Current Total AMS.427 The United States argues that in the cited paragraph, the

421 China's response to Panel question No. 75.
422 Third recital of the Preamble to the Agreement on Agriculture.
423 Panel Report, Korea – Various Measures on Beef, para. 811.
424 United States' response to Panel question No. 79.
425 Appellate Body Report, Korea – Various Measures on Beef, fn 49. The Appellate Body did not
otherwise express concerns with the panel's statement.
426 Appellate Body Report, Korea – Various Measures on Beef, para. 115.
427 China's response to Panel question No. 114.

Appellate Body concl uded that the Final Bound Commitment Level is an absolute value to which
"Current Total AMS … calculated according to Annex 3 , is compared" 428 and that n either the
Agriculture Agreement, nor the findings of the Appellate Body, support the conclusion that Cur rent
Total AMS is compared to, or must be calculated consistent with, a Member's Base Total AMS.429
7.248. We note that the cited statements have to be considered in the context in which they were
made. In particular, these statements were a response to Korea's argument that national schedules
on the reduction of subsidies in favour of agricultural products could be understood as multi -year
equations, where one side of the equation includes the commitment level for a given year, while the
other side of the equation includes the actual AMS for the same year. The Appellate Body's view was
that one side of such an equation – the one describing the Base Total AMS - would be an already-
specified figure so that there would not be any formula involved on that side of the eq uation. In
other words, when determining whether Current Total AMS exceeds China's domestic support
commitment level, the Base Total AMS is not itself a formula that would need to be solved so as to
obtain a number; it is a fixed figure that has already be en calculated and specified in the tables of
supporting material. For these reasons, the Appellate Body rejected Korea's multi -year equation
approach to evaluating compliance. We note that adopting Korea's approach would have suggested
that consistency is almost of a mathematical exactness. This is so because a direct equivalence was
implied by the equal signs of Korea's multi-year equations.
7.249. The Appellate Body also stated, as mentioned before, that with respect to the side of the
hypothetical equation rep resenting the Base Total AMS, "the relevant treaty provisions
do not provide for any particular mode of calculation of the 'Base Total AMS'" 430, from which figure
the commitment levels could be arithmetically derived. We note that the context provided by the
sentences before and after this statement clarifies that "the relevant treaty provisions" referred
therein were Articles 1(a) and 1(h) of the Agreement on Agriculture. This is so because the Appellate
Body was drawing a parallel between the Current Total AMS, whose calculation methodology is set
out in those provisions, and Base Total AMS, whose calculation methodology is not set out in those
provisions. There is no indication in that Appellate Body Report that consideration was given to
Paragraph 5 of Annex 3, as we have done above, and which in our view does provide for guidelines
in this respect. Nor is there any indication that the Appellate Body believed that there was no
guidance to calculate the Base Total AMS, when its statements are placed in the proper context.
7.250. For these reasons, we consider that the statements of the Panel in Korea – Various Measures
on Beef are relevant to the matter at hand and that the Appellate Body's statements do not oppose
the Panel's views on how the CDM guarantees some so rt of consistency in the mentioned
calculations. While the Appellate Body rejected a strict mathematical equivalence approach to the
consistency requirement, it left open the notion of a general consistency, which does not require an
exact identity in the calculation methodology.
7.251. The above leads us to conclude that both the text of the Agreement on Agriculture and the
goal of achieving domestic support reduction commitments in this same agreement support the
notion that there should be a broad correspondence in the methodologies used to calculate the Base
Total AMS and the Current Total AMS. Such consistency is in part safeguarded by the usage of the
CDM in the calculations. To us, this does not mean that either the data used or the methodologies
employed have to be identical in every respect . The actual result will depend on the concrete
circumstances of the Member involved.
7.252. Having found this, we do not deem it necessary to address China's third argument that the
object and purpose of the Agreement on Agri culture requires consistency between negotiated
commitments and an assessment of compliance with these negotiated commitments.431
7.4.5.2.4 The FERP that should be used in the present dispute
7.253. We will now set out our understanding of Paragraph 9 of Annex 3 and define the FERP that
should be used to calculate China's Current Total AMS in this dispute. As mentioned in paragraph

428 Appellate Body Report, Korea – Various Measures on Beef, para. 115.
429 United States' comments on China's response to Panel question No. 114.
430 Appellate Body Report, Korea – Various Measures on Beef, para. 115.
431 China's second written submission, para. 302.

7.180 above, the Panel is presented with what seems to be a simple choice: using a FERP based on
the years 1986-1988, as the United States asserts, or one based on the years 1996-1998, as China
asserts. In this connection, we note that the parties ' disagreement does not pertain to the entirety
of Paragraph 9 of Annex 3432; it is only the applicability of the 1986-1988 time-period set out therein
that is an issue between them.
7.254. We note at the outset that the text of Paragraph 9 explicitly refers to the FERP being based
on the years 1986 to 1988. This language must be read in its proper context and in light of the
object and purpose of the Agreement on Agriculture. In this connection, we note that this context is
provided by other elements of the Agreement on Agriculture, together with the covered agreements,
and the object and purpose of this Agreement as reflected inter alia in its preamble. In addition, we
note that the interpretation that we give to Paragraph 9 should take into account that this provision
is organically connected to other rules in the Agreement on Agriculture that set out the manner in
which domestic support, in the form of market price support, is meant to be calculated. In other
words, Paragraph 9 is part of a set of norms that provide for a mathematical framework in order to
arrive at a measurement of domestic support. Therefore, an interpretation of Paragraph 9 should
not be done in isolation of the overarching mathematical operation of which it forms a part: the MPS
formula. For these reasons, we are of the view that any interpretation given to this provision should
recognize that the FERP is meant to interact with the other two variables of the AMS formula, the
AAP and the QEP, and should keep some harmony and consistency with the mathematical process
envisaged by the Agreement on Agriculture.
7.255. Of particular importance in this interpretative process are the conclusions that we have
arrived at in the previous sections. We recall that we concl uded that China had not use d a FERP
based on the 1986-1988 time-period when calculating its Base Total AMS and that China's tables of
supporting material contained data on a FERP that used a three -year average for the period 1996-
1998.433 Importantly, we also came to the conclusion that none of the 36 Members who have acceded
to the WTO since 1995 used a period of 1986-88 with the exception of Bulgaria.434 Additionally, we
considered that both Annex 3 and China's CDM have to be used in the AMS calculation, in some way.
Lastly, we concluded that the Agreement on Agriculture provided the basis for a requirement aimed
at guaranteeing some broad correspondence in the process of calculating Base Total and Current
Total AMS.435 In our view, these conclusions should inform our interpretation of Paragraph 9 and the
overall functioning of the FERP in the MPS Formula. As we will explain below, this is so because they
provide valuable context and clarify how the object and purpose of the Agreement on Agriculture
permeates the calculation of domestic support in the form of market price support.
7.256. Before embarking upon this analysis, however, we will address a preliminary issue presented
by the parties regarding the framework that should be used to assess the issue of the FERP.
7.257. The parties have submitted extensive arguments on how the decision on the relevant time-
period should be made by assessing the hierarchical relationship between the provisions that support
each party's position. Under this approach, the applicable time -period to use for the FERP would
depend on the legal value of the provisions invoked by each party. For the United States, Paragraph
9 of Annex 3 is the norm with the highest legal value and thus the FERP must strictly conform to all
the requirements set out th erein, particularly the time -period of 1986 -1988.436 The United States
has also argued that the plain meaning of this provision reflects a mandatory obligation to use the
specific years indicated.437 On the other side of the debate, China has argued that Rev.3 and its CDM
give rise to domestic -support-related commitments and that the elements contained in the latter
are part and parcel of the domestic support commitments that China has undertaken under its
Accession Protocol.438 Under this view, the FERP must be based on the years 19 96-1998 as these

432 The parties seem to agree in the fact that the FERP should be a three-year average of the f.o.b. or
c.i.f. unit value for the basic agricultural product at issue.
433 See para. 7.204.
434 See para. 7.214.
435 See para. 7.251.
436 United States' first written submission, paras. 98-100. The United States argues here that the
reference to calculation of the average f.o.b. or c.i.f. unit value of the agricultural product in the period 1986
through 1988 establishes that the "fixed external reference price" is to be one, unchanging value.
437 United States' first written submission, paras. 98-100; United States' response to Panel question
No. 74 (second substantive meeting).
438 China's second written submission, para. 187.

are the ones used in China's tables of supporting material. Although not expressly stating so, China's
position is implicitly grounded on the primacy of its so-called domestic-support-related commitments
over Paragraph 9 of Annex 3.439
7.258. This hierarchical approach has also been prominent in the discussion of the relevance of the
CDM when calculating China's Current Total AMS. As we concluded in Section 7.4.3 above, Annex 3
and the CDM have to be used in the abovementioned calculations. This is set out in a clear fashion
in Article 1 of the Agreement on Agriculture. However, the difference in the language in Articles
1(a)(ii) and 1(h)(ii), particularly the words "taking into account" in the former provision, gave the
basis for the United States to argue that there is a hierarchy between Annex 3 and the CDM. For the
United States, this hierarchy implied that a possible conflict between Annex 3 and the CDM should
be resolved in favour of the former. In this vein, even if it was clear that the CDM had to be used in
the process of calculating Current Total AMS, any inconsistencies between the CDM and Paragraph
9 would have to be resolved in favour of the latter , as the CDM was only meant to be "taken into
account".
7.259. We have expressed our views on the inadequacy of assessing the differences in the language
of Articles 1(a)(ii) and 1(h)(ii) through the lens of conflict . This had the potential to distort the
general conception of the calculation of Current Total AMS under these provisions as being
organically and inextricably linked.440 We also stressed the importance of not assuming ex-ante the
existence of a conflict without considering the possibility of concurrent application.441
7.260. As explained in Section 7.4.3 above, the Panel considers that the wording of Articles 1(a)(ii)
and 1(h)(ii) both require that, in some way, China's CDM should form part of the calculation of AMS.
Taking an approach which uses only Annex 3, or one which relies o nly on the CDM, would not
properly incorporate both, as the Agreement on Agriculture requires. In this vein, we consider that
the FERP specified within Rev.3, including the time-period used in its determination, is "constituent
data" under the purview of the Agreement on Agriculture. Incorporation of this constituent data into
the calculation of China's AMS for the relevant basic agricultural products requires that this data be,
at a minimum, taken into account.
7.261. As discussed previously, it is unclear precisely what it would mean to take China's CDM into
account, rather than performing the calculation "in accordance with" China's CDM. However, the
Panel understands that to ignore this constituent data would run counter to the idea that CDM has
a role to play in the calculation of AMS, as set out in Article 1(a) and (h) of the Agreement on
Agriculture. To follow the United States' line of argumentation would be to effectively only rely on
Annex 3 of the Agreement on Agriculture, rendering the references to CDM within the Agreement
superfluous.442 For these reasons, we disagree with framing the legal issue in this matter as one
involving the concepts of conflict and the hierarchical application of norms. To us, the issue is not
simply choosing between Paragraph 9 of Annex 3 or China's CDM. It rather involves an interpretation
of Paragraph 9, in its context, that recognizes that it is part of the MPS Formula framework. In
particular, we believe that the determination of the FERP applicable in the present case needs to
carefully take into account all of our previous conclusions mentioned in paragraph 7.255 above. This
implies carefully weighing and balancing these different factors before reaching our conclusion. In
what follows, we will continue with this interpretative process.443

439 We are mindful that throughout the proceedings, China has advocated for a "harmonious
interpretation of Annex 3 and China's constituent data and methodology" and that the Panel need not reach
the question of how to resolve any conflict between Annex 3 and Rev.3 (See Section V of China's second
written submission). In our view, however, the notion of the so-called domestic-support-related commitments
presupposes a hierarchical approach to the issue at hand.
440 Panel Report, Korea – Various Measures on Beef, para. 813.
441 See paragraph 7.165.
442 As if one were to follow China's line of argumentation much of Annex 3 would be rendered
ineffective.
443 In this process, we understand that in order to take into account the CDM, the Panel should give due
weight to the FERP used in China's tables of supporting material, and in particular the years used to determine
that FERP, as constituent data when calculating China's AMS. We note that the Appellate Body has considered
that, while not applicable to the factual situation before it at the time, a Member's CDM could potentially be
used over the guidance of Annex 3 in certain circumstances. We consider that the circumstances before us are

7.262. We recall that the text of Paragraph 9 of Annex 3 explicitly refers to a particular time period.
However, these elements need to be interpreted in the context provided by other provisions of the
Agreement on Agriculture. Paragraph 5 of Annex 3, indicating that the Base Total AMS should be
calculated using the guidance of Paragraphs 6-13, is of particular relevance here. As we noted in
section 7.4.5.2.2 above, we came to the factual conclusion that none of the 36 Members that have
acceded to the WTO since 1995 have used a period of 1986 -88, with three exceptions.444 This is
important because, as per Paragraph 5 of Annex 3, Paragraph 9 is meant to provide guidance for
the calculation of the FERP for the purposes of determining Base Total AMS. However, and even in
the face of this explicit guidance in Paragraph 5, the Base Total AMS of the referred Members did
not use the time-period set out in Paragraph 9. The context provided by Paragraph 5, in conjunction
with the above considerations, suggests that the time-period mentioned in this provision does not
necessarily accommodate or envisage situations such as China's in this case, where the FERP used
for the Base Total AMS was not anchored in the 1986-1988 period.
7.263. In addition, we note that the fact that the time-period set out in Paragraph 9 has not been
used in the tables of supporting material of non-original Members provides useful context, on its
own, for the interpretation of Paragraph 9. This is a consequence of the fact that the Base Total
AMS, and most of the calculations necessary to produce it, are contained in the Members' tables of
supporting material. These, in turn, are an integral part of Member's Schedules, thus being treaty
text. In this vein, we recall that the Appellate Body has stated that schedules of commitments of
other Members are context when inter preting a Member's own schedule. 445 We find this reasoning
to be equally applicable when interpreting China's tables of supporting material , and by extension,
Paragraph 9. Having reached this conclusion, we do not find it nece ssary to address China's
argument relating to how this situation can be characterized as subsequent practice under Article
31(3)(b) of the VCLT, nor do we express any view on this matter.446
7.264. Indeed, we note that both parties agreed with us in this conclusion and that we could take
the tables of supporting material into account in our legal interpretation of the provisions involved.447
However, the parties disagree as to the actual conclusions that could be extracted from this
context.448

particularly suited to considering the FERP, as constituent data, as having equal importance in the
determination of China's AMS for certain products.
444 See paragraph 7.214.
445 The Appellate Body has stated the following:
There is, however, additional context referred to by the Panel and the participants that we must
consider, namely: (i) the remainder of the United States' Schedule of specific commitments; (ii)
the substantive provisions of the GATS; (iii) the provisions of covered agreements other than the
GATS; and (iv) the GATS Schedules of other Members.
…
Both participants, as well as the Panel, accepted that other Members' Schedules constitute relevant
context for the interpretation of subsector 10.D of the United States' Schedule. As the Panel pointed out, this is
the logical consequence of Article XX:3 of the GATS, which provides that Members' Schedules are "an integral
part" of the GATS. We agree. At the same time, as the Panel rightly acknowledged, use of other Members'
Schedules as context must be tempered by the recognition that "[e]ach Schedule has its own intrinsic logic,
which is different from the US Schedule." (Appellate Body Report, US – Gambling, paras. 178 and 182.)
(original footnotes omitted)
446 China, response to Panel Question 46, paras. 196-204; China, first written submission, para. 175.
We recall that according to China, if the Panel were to use Members' supporting tables as context, the Panel
could consider that it would no longer be necessary or appropriate to address its argument on subsequent
practice. (China's response to Panel question No. 87).
447 China's response to Panel question No. 74 (second substantive meeting); United States' response to
Panel's question No. 74 (second substantive meeting). In this connection, we note that the Appellate Body has
stated that schedules of commitments of other Members are context when interpreting a Member's own
schedule, see Appellate Body Report, US – Gambling, paras. 178 and 182.
448 For China, the context provided from original Members' and non-original Members tables of
supporting material demonstrates that the relevant provisions of the Agreement on Agriculture establish a
single rule that requires each Member to use a three-year base period for establishing its domestic support
reduction commitments, including for the identification of the applicable fixed external reference prices to be
used in the calculation of Base Total and Current Total AMS. For the United States, the customary rules of
interpretation do not permit an interpreter to use context to reach an interpretation inconsistent with the
ordinary meaning of the terms of the provision in question, such that they create a derogation or exception
from the provisions of the agreement. In addition, it argues that those tables of supporting material do not

7.265. We see that t he relevance of the 1986 -1988 time-period set out in Paragraph 9 does not
appear to be cast in stone in the case of China . The Base Total AMS of none of the non-original
Members (with one exception as noted above) have used it , while being mandated to do s o by
Paragraph 5 of Annex 3. To us, this is an important factor that cannot be dismissed as a negotiation
technicality, an historical account or even an error, as suggested by the United States.449 In addition,
and as we have previously noted, the calculatio n of Current Total and Base Total AMS is not only
guided by Paragraph 9 of Annex 3 but also by a number of other provisions, including Paragraph 8
of the same Annex. For this reason, the context provided by non-original Members' tables of
supporting material is not only relevant for the interpretation of Paragraph 9 but also for the other
provisions involved in the calculation of Base Total AMS and the MPS Formula framework.
7.266. We are mindful, however, that the mentioned context is perhaps more immediately relevant
for the calculation of the Base Total AMS than for the Current Total AMS. This is a consequence of
the fact that the tables of supporting material only contain information relating to the Base Total
AMS and not the Current Total AMS. But even in th e face of this, the mentioned context is still
relevant for the calculations of the Current Total AMS. This is so because Base Total and Current
Total AMS' calculations are not entirely divorced. On the contrary, they are closely connected. This
leads us to our next point in our assessment: the consistency requirement.
7.267. We explored t he relationship between the Base Total and Current Total AMS in section
7.4.5.2.3 above, where we concluded that the Agreement on Agriculture supports the necessity of
maintaining a broad correspondence in the calculation process of these two measurements of
domestic support. In particular, we noted that not doing so could lead to an app les-to-oranges
comparison where a Member's compliance with its domestic support commitments could be the
result of differences in the methodology applied to construct the AMS values and not of the domestic
support measures actually being applied by a Member.450 In this vein, we note that using different
time-periods to construct the FERP exacerbates this risk.
7.268. Indeed, we note that of the three components of the MPS formula, the only one that does
not measure a contemporaneous feature of the market is the FER P, as it is an external reference
price that is anchored in a specific time -period. In other words, while the AAP and the QEP are
variables that may evolve depending on the regulatory framework and the time-period for which the
AMS is being measured, the FERP is the only part of the MPS formula that will remain the same,
regardless of the period for which the domestic support is being measured. In this way, the FERP is
more akin to a constant than to a variable.
7.269. Recognizing that the FERP will not change r egardless of the year takes us to the source of
a material incongruence that may arise when comparing Base Total and Current Total AMS in the
process of assessing a Member's compliance with its domestic support commitments . Simply put,
using one time-period for the FERP used in the Base Total AMS and another for the Current Total
AMS would yield two different results in the MPS formula that would be entirely uncorrelated to
changes in the actual provision of domestic support by a Member. There would thus be different
results in these two measurements, even if the values for the AAP and the QEP were the same.
7.270. For instance, at the end of the negotiations and once a Base Total AMS was calculated and
memorialized in the tables of supporting material of a Member , a compliance assessment with the
domestic support obligations of that Member, at that same moment in time, would lead to the
strange result that there would be two different values of AMS to be compared, but with no changes
in the underlying domestic sup port as neither the AAP nor the QEP would have changed. In other
words, the Current Total AMS would yield a value that indicates a change in the provision of domestic
support where none has occurred. This change would be an artificial result of not using t he same
time-period for the FERP. To us, this is precisely why some broad correspondence in the calculation

provide context for the calculation of Current Total AMS, but rather to the calculation of Base Total AMS.
China's response to Panel's question No. 74 (second substantive meeting); United States' response to Panel's
question No. 74 (second substantive meeting).
449 "Therefore, the commitment to maintain levels of 'domestic support in favour of agricultural
producers expressed in terms of Current Total AMS [that] does not exceed the corresponding annual or final
bound commitment level specified in Part IV of the Member's Schedule,' and to calculate product-specific AMS
and Current Total AMS 'in accordance with' the Agreement, including Annex 3 and Article 6, apply whether or
not its Base Total AMS contained errors or was calculated inconsistently with Annex 3" (original footnotes
omitted). United States' response to Panel's Question No. 102.
450 See para. 7.243.

process of both measurements is needed. This hypothetical scenario also shows that this broad
correspondence has a direct relevance in the definition of the FERP.
7.271. The above leads us to conclude that allowing the use of a different time -period in the FERP
used to calculate Current Total AMS, as compared to the one used for the Base Total AMS would
potentially entail an apples -to-oranges comparison, which would go very much against the broad
correspondence that should exist in the calculation process of both measurements.
7.272. We recall that we found that a basis for this consistency requirement was the goal of the
Agreement of Agriculture of achieving reduc tion commitments, as stated in the third recital of the
preamble. In our view, this object and purpose of the Agreement on Agriculture should also guide
our interpretation of Paragraph 9 and the applicable FERP in the present case. This interpretative
tool indicates to us that this provision cannot be read so at to allow this type of incongruent results.
7.273. To finalize our assessment, we observe that our conclusions on how other Members' tables
of supporting material provide context for the calculation of the Base Total AMS are also applicable
to the Current Total AMS. This is because the broad correspondence in the calculation of both of
these measurements makes the fact that none451 of the non-original Members have used the 1986-
1988 time-period when calculatin g Base Total AMS also relevant to the calculation of the Current
Total AMS. This is even more so when due account is taken that Paragraph 9 is applicable in both
calculation processes. For these reasons, the context provided by the parameters reflected in tables
of supporting material regarding this provision when calculating the Base Total AMS extend also to
the Current Total AMS.
7.274. Lastly, we note that both Annex 3 and the CDM have to be used when calculating the Current
Total AMS. Even if we assume, for th e sake of argument, that the CDM has only to be "taken into
account" when calculating a product's AMS, and that this implies a lesser degree of consideration as
compared to Annex 3, a decision to use the 1996-1998 time-period is consistent with this approach.
This is so because the general framework of Paragraph 9 is still being applied, namely, that the FERP
is a three-year average of the f.o.b. or c.i.f. unit value for the basic agricultural product at issue. It
is only the different time-period from the CDM which is being taken into account.
7.275. For these reasons, we conclude that the FERP to be used in this case is one that conforms
with the requirements of Paragraph 9 of Annex 3, save for the time-period, which should be based
on the same years used to calculate China's Base Total AMS, i.e. 1996-1998.
7.4.5.3 Quantity of production eligible to receive the AAP
7.276. We now assess the issues surrounding the third variable needed for the calculation of China's
AMS in the form of market price support: the "quantity of production eligible to receive the applied
administered price". This variable denotes the proportion of production covered by the challenged
market price support measures. The parties differ in their views on what constitutes the quantity of
eligible production in the case at hand. Therefore, the Panel must first address the meaning of this
term.
7.277. The starting point for the Panel's analysis is the text of Annex 3, Paragraph 8, of the
Agreement on Agriculture, which sets forth the guidelines for the calculation of AMS:
[M]arket price support shall be calculated using the gap between a fixed external
reference price and the applied administered price multiplied by the quantity of
production eligible to receive the applied administered price.452 (emphasis added)
7.278. The United States asserts that the ordinary meaning of "eligible" is "[f]it or entitled to be
chosen for a position, award, etc."453, and thus, the "quantity of production eligible" is a portion or
amount of the commodity produced that is entitled to receive the AAP. The United States thus argues
that "eligible production" within the meaning of Annex 3 is production which is fit or entitled to

451 With the exceptions mentioned in Table 6 above.
452 Agreement on Agriculture, Annex 3, para. 8. (emphasis added)
453 United States' first written submission, para. 102 (referring to Shorter Oxford English Dictionary,
"eligible," p. 799 (ed. 1993) (Exhibit USA-64).

receive the administered price, whether or not the production was actually purchased.454 The United
States submits that the Appellate Body in Korea – Various Measures on Beef considered the meaning
of the phrase and reached a similar understanding.455
7.279. The United States also claims that where a market price support instrument places no limits
on the volume of production that may be purchased, the entirety of the production is "eligible", and
that conversely, if a limit such as on the geographic scope or a regulatory maximum is applied, that
limit should be accounted for when determining the volume "eligible" to receive the AAP.456 In this
connection, the United States submits that the MP P Implementation Plans for wheat and rice limit
eligible production only by geographic scope – and thus the relevant QEP is the entire production in
the relevant provinces.457
7.280. China notes that the Agreement on Agriculture does not contain a definition of the term
"production eligible to receive the applied administered price" in Paragraph 8 of Annex 3, nor does
it prescribe a particular methodology for the identification of the amount of production that is eligible
to receive the AAP. China claims that the absence of any guidance on how to determine eligible
production contrasts with the detailed guidance provided in Paragraph 9 of Annex 3 concerning the
characteristics of FERPs458 and that in this context, the references in Articles 1(a)(ii) and 1(h)(ii)
highlight that there is some flexibility for the WTO membership to agree to certain Member-specific
methodologies relevant to the calculation of AMS.459
7.281. China has argued that the appropriate methodology for the determination of "eligible
production" stems from a harmonious interpretation of the provisions of the Agreement on
Agriculture which gives meaning to both (i) the terms of Paragraph 8 of Annex 3 and (ii) the definition
of "eligible production" set out in Rev.3. China claims that this definition is incorporated in Annex 8
of China's Accession Protocol, and is part of China's "term s of accession", with regard to China's
domestic support commitments. 460 For China, since the CDM contained in Rev.3 address es the
methodology for the determination of "eligible production", including for wheat and rice, the Panel
must include these in its interpretative exercise.461
7.282. We note that the "quantity of production eligible to receive the applied administered price",
sometimes referred to as the "quantity of eligible production" or the "QEP" in this report, is one of
the variables used in calculating market price support. We agree with the parties that the Agreement
on Agriculture does not define this term. In order to discern the ordinary meaning of the term
"quantity of eligible production", the Panel must review the language used in Paragraph 8, including
the part of the phrase which states "… to receive the applied administered price" in its context and
in light of the object and purpose of the provision.
7.283. The ordinary meaning of the words "quantity" 462 and "production"463 is not disputed here.
The operative term in this variable is the word "eligible". Eligible is defined as "f it or entitled to be
chosen for a position, award, etc.".464 These terms must be read in conjunction with the remaining
part of the clause, i.e. "to receive the applied administered price." While we have already examined

454 See Panel Report, Korea – Various Measures on Beef, para. 827 (noting that "eligible production for
the purposes of calculating the market price support component of current support should comprise the total
marketable production of all producers which is eligible to benefit from the market price support, even though
the proportion of production which is actually purchased by a governmental agency may be relatively small or
even nil").
455 United States' first written submission, para. 103 (referring to Appellate Body Report, Korea –
456 United States' second written submission, para. 105 (referring to Appellate Body Report, Korea –
457 United States' second written submission, para. 105.
458 China's second written submission, para. 365.
459 China's second written submission, para. 366.
460 China's second written submission, paras. 260 and 359.
461 China's second written submission, para. 364.
462 Quantity refers to "an amount, a portion". Oxford English Dictionary Online, defintition of "quantity",
available at: <http://www.oed.com/view/Entry/155929>, accessed 11 June 2018.
463 Production, in this sense, can be defined as "[a] thing produced as a result of an action, process, or
effort; a product. Also: produce, products collectively". Oxford English Dictionary Online, definition of
"production", available at: <http://www.oed.com/view/Entry/60463>, accessed 11 June 2018.
464 The New Shorter Oxford English Dictionary, definition of "eligible", Vol. 1, 1993, p. 799.

the meaning of "applied administered price"465, the word "receive" means "to take, accept, regard,
hear, etc. (something offered or presented, or to which attention is given) in a specified manner or
with a specified expression of feeling".466 We understand, therefore, that the quantity of production
eligible to receive the AAP refers to the amount of production of a product which is fit467, or able to
benefit from the price support provided through the AAP.
7.284. Turning to th e context of the provision, we note that Paragraph 8 of Annex 3 specifically
links the AAP with the QEP by using the words "eligible to receive the applied administered price".
The eligible quantity is thus directly tied to the AAP, in the sense that only that amount of product
that can receive the AAP enters the calculation of AMS. As regards the AAP, there is no dispute
between the parties that it is a contemporaneous variable that is determined for a particular year
for which AMS is being calculated and that Members would typically set out the AAP in the relevant
market price support measures themselves.468 In the Panel's view, a similar consideration applies to
the QEP, due to the link drawn between the AAP and the QEP in the text of the Agreement on
Agriculture itself. Additionally, were a limit to be placed on the quantity which would be procured at
a particular price, that limit would relate specifically to the particular time-period in which the price
applies. Such a limitation would need to be defined in the legal framework that regulates the
provision of market price support in a given Member. Therefore, w e find that similarly to the AAP,
the QEP should be determined with reference to the relevant regulatory framework and, in particular,
the relevant measures.
7.285. This can be contrasted with our discussion on FERP, which is explained in detail above . By
definition, the FERP is not a contemporaneous variable, but is rather a data point that is anchored
in a particular time-period – it is fixed. This means that this variable (or perhaps constant) can be
found in one fixed location, for instance in China's tables of supporting material, which does not vary
through time. In this regard, the QEP is of a fundamentally different nature as it may vary depending
on the prevailing regulatory framework.
7.286. This understanding of the term "quantity of production eligible" as being contemporaneous
and related to the relevant measures and their regulatory framework is consistent with the object
and purpose of the Agreement on Agriculture, which aims at "correcting and preventing restrictions
and distortions in world agricultural markets". 469 Such distortions result from support measures,
including market price support, which affect decisions on whether to produce a particular agricultural
product. These decisions are influenced not only by the AAP, but also by the extent of production
which is covered by the challenged measures. In other words, knowing whether their production
could receive market price support could be just as important for agricultural producers as the AAP
itself. It follows that in order to consider that there is a limit on eligible production, the market
participants would need to be informed that the government would not be willing to pay the AAP for
the entire production, but rather only for a subset of it. As noted above, we would typically look for
this information in the regulatory framework relevant to the operation of the measures. Otherwise,
a panel would be assessing the eligibility of p roducts to receive the AAP in the abstract and
disconnected from the operation of the measures.
7.287. China argues in this regard that its tables of supporting material contain a definition of
eligible production which must be considered following a holistic and harmonious interpretation of
the Agreement on Agriculture, in the context of assessing the compliance of its market price support
measures for wheat and rice with its domestic support reduction commitments.470 According to
China, such alleged definition of eligible production forms part of its CDM and thus must be taken
into account when calculating its AMS, as referenced in Articles 1(a)(ii) and (h)(ii).471
7.288. We agree with China that a panel must consider the CDM in a Member's supporting tables
when calculating the AMS. This, however, does not mean that any reference to eligible production

465 See Section 7.4.5.1 above.
466 Oxford English Dictionary Online, defintition of "receive", available at:
<http://www.oed.com/view/Entry/159411?rskey=Q2we63&result=2#eid>, accessed 22 July 2018.
467 See The New Shorter Oxford English Dictionary, definition of "fit", Vol. 1, 1993, p. 960, which is
defined as "be suited to or appropriate for; Meet the requirements of".
468 China's first written submission, paras. 189-195; United States' first written submission,
paras. 96-97.
469 Second recital of the Preamble to the Agreement on Agriculture.
470 China's first written submission, paras. 196-203; China's second written submission, para. 358-375.
471 China's second written submission, para. 362.

contained in the tables of supporting material should necessarily be regarded as the definition of
"quantity of production eligible" within the meaning of Paragraph 8 of Annex 3. As noted above, the
QEP is informed by the operation of the challenged measures, which would be reflected in the
calculation of the AMS. To us, this understanding of the QEP is consistent with Articles 1(a)(ii) and
1(h)(ii) of t he Agreement on Agriculture. Contrary to what China appears to be suggesting, the
language of these provisions, requiring that AMS be calculated either taking into account, or in
accordance with, the CDM, does not imply that all components of the calculati on are necessarily
determined by the CDM contained in the tables of supporting material.
7.289. In this vein, China argues that the Member-specific CDM may impact the ordinary meaning
of "eligible production", depending on the methodology that a Member used for the determination
of eligible production as part of its CDM. 472 China argues that the circumstances in this dispute
identify a methodology used for the calculation of Base Total AMS whereby "eligible production" is
determined on the basis of the "amount purchased" and that same definition in endnote 19 of Rev.3
also provides context for the calculation of Current Total AMS. 473 China's argument in this regard
relies on the notion that endnote 19 of its tables of supporting material contains a methodology for
the determination of the quantity of eligible production; that China currently uses broadly similar
market price support measures to those used during their accession (the State Procurement Price
and Protective Price programmes); and that China may continue applying the same methodology
for the determination of eligible production when calculating AMS under current measures.474 China
asserts that by explaining how the quantity of eligible production was determined for the measures
in place at the time of China' s accession to the WTO , endnote 19 sets out a methodology that is
capable of being, and should be, applied for purposes of calculating AMS, under Article 1(a)(ii).475
7.290. China asserts that Rev.3 defines eligible production for China' s calculation of AMS from
market price support as follows476:
Eligible Production:
Eligible Production for State Procureme nt Price refers to the amount purchased
by state-owned enterprises from farmers at state procurement price for the food
security purpose (see Endnote 10 of Supporting Table DS 1);
Eligible Production for Protective Price refers to the amount purchased by state -
owned enterprise from farmers at protective pr ice in order to protect farmer's
income.477
7.291. Endnote 19 is affixed to the heading "Eligible Production" in Supporting Table DS:5 of China's
Rev.3, which provides information on China's MPS for the purposes of determining China's AMS
during the years 1996 -1998. China argues that this wording reflects that China has made a
commitment to apply a methodology that determin es eligible production for market price support
for wheat and rice as the quantity of wheat and rice purchased under an AAP.478 This argument
seems to be based on the premise that China's MPS measures do not contain an express limitation
on the quantity of eligible production in the ordinary sense, and that this 'limitation' as it were, can
be found by looking towards Rev.3 and China's CDM.
7.292. In this regard, the United States argues that " China's Supporting Table simply does not
include a "definition" of eligible production. Rather it provides a factual description of market price
support programs available to Chinese farmers between 1996 and 1998".479 The United States also
argues that China's factual description of its "methodology" does not express an intent to change
the "methodology" used in the future, or an agreement by the Members that China could change

472 China's second written submission, para. 372.
473 China's second written submission, para. 372.
474 China's response to Panel question No. 95, para. 280.
475 China's second written submission, paras. 374-378; China's response to Panel question No. 95,
para. 282.
476 China's first written submission, para. 199.
477 WT/ACC/CHN/38/Rev.3, endnote 19, (Exhibit USA-43).
478 China's response to Panel question No. 88, para. 256.
479 United States' response to Panel question No. 57, paras. 160-161 (first substantive meeting).
See also United States' response to Panel question No. 56 (first substantive meeting).

that "methodology" .480 Finally, the United States argues that, when read together, endnote 10 and
endnote 19 indicate that the volume purchased by the state -owned enterprises was the
"predetermined" volume. For the United States, this indicate s that the "methodology" utilized by
China with regard to both programmes is consistent with the "methodology" demanded by Annex 3,
paragraph 8, of the Agriculture on Agreement, that is , that the volume of production eligible to
receive the AAP is equivalent to the predetermined maximum purchase volume.481
7.293. As discussed in Paragraph 7.139 above, not everything included in the tables of supporting
material is constituent data and methodology . We are unable to see how , in this case, a mere
reference to "eligible production" in endnote 19 in Supporting Table DS:5 of China's Rev.3 could be
regarded as a binding methodology to be used prospectively in the calculation of China's AMS.
Looking at the plain text of endnote 19 , the usage of t he word "refers" suggests that endnote 19
merely describes the "eligible production" that was used in the tables of supporting material upon
China's accession to the WTO. It does not establish a methodology to assess the quantity of eligible
production that should be applied when calculating AMS at any other point in time.
7.294. This is all the more significant as the text of endnote 19 only mentions eligible production in
the particular context of the "State Procurement Price" and " Protective Price" programmes. These
are specific support measures that China had in place at the time of its accession. We thus
understand the reference to "eligible production" in endnote 19 to be directly tied to these
programmes, which have long since been terminated. 482 In addition, we note that u sing the
description of eligible production contained in China's CDM would lead to calculation of support that
is detached from the operation of the measures challenged by the United States. For these reasons,
we find that endnote 19 does not contain a methodology that would be relevant to our calculation
of China's AMS.
7.295. We find further support for our interpretation of the QEP in the Korea – Various Measures on
Beef report, where the Appellate Body held that "[p]roduction actually purchased may often be less
than eligible production"483, and reiterated that "production eligible" refers to production that is "fit
or entitled" to be purchased rather than production that was actually purchased". 484 Contrary to
China's argument, we consider the Appellate Body's reading of the phrase "quantity of production
eligible" to apply outside of the specific context of the dispute in Korea – Various Measures on Beef;
when making that statement, the Appellate Body was determining the ordinary meaning of the term
used in Paragraph 8 of Annex 3, rather than limiting it to the facts of that case.
7.296. In sum, the Panel considers that based on the plain meaning of the entire phrase "quantity
of production eligible to receive the applied administered price", the QEP should be determined as a
current reflection of the amount of product which qualifies to be purchased from producers at the
AAP. We do not consider the contents of endnote 19 to constitute a reflection of such an amount ,
nor to have any bearing on the quantity of production eligible to receive the AAP in the years 2012-
2015, the years for which AMS must be calculated for wheat and rice. As a result, the Panel must
determine what the QEP actually was in those years, as refl ected in China's regulatory framework
for market price support. Considering the link between the AAP and the QEP, we understand that
the appropriate starting point in this determination is the regulatory framework surrounding China's
challenged market price support for wheat, Indica rice and Japonica rice.
7.297. Turning to the content of the challenged measures, we reiterate that the underlying legal
instruments do not contain explicit numerical limitation s on the quantity of product which could
receive the relevant AAP, nor do they contain any methodology which could definitively determine a

480 United States' comments on China's response to Panel question No. 95, para. 126.
481 United States' comments on China's response to Panel question No. 95, paras. 123-125.
482 "In 2004, China terminated the State Procurement System and the Protective Price Policy, in favor of
a comprehensive opening of the grain procurement market." China's first written submission, para. 25.
483 Appellate Body Report, Korea – Various Measures on Beef, para. 120.
484 Appellate Body Report, Korea – Various Measures on Beef, para. 120. The Panel understands that
this statement, along with other references to that dispute, should be read in the context of the existence of a
clearly defined limitation on purchases of beef by Korea. To the Panel, the referenced statement simply
highlights that (i) the amount that is eligible can be greater than the amount finally purchased, (ii) the eligible
amount may be lower than the amount of total production, and (iii) it is the eligible amount which is to be
included in the AMS calculation, and not any other amount.

specific numerical limitation.485 More specifically, neither the Annual Notices nor the Implementation
Plans explicitly mention any limits on the amount of grain to be purchased by the designated entities.
In fact, the Implementation Plans require the relevant entities to acquire storage capacity to "match
with the expected amount of grain purchased at the minimum price." 486 They further instruct
SinoGrain, ADBC and local authorities to use the available storage space, or procure new space, in
order to "meet farmer's needs for grain selling".487 Additionally, China has confirmed that "there are
no limitations on the number and amounts of loans that the ADBC can provide to SinoGrain f or the
purchase of grain, except for those relating to the financial stability of the bank. "488 Instructions to
accommodate as much grain as is proffered, and the lack of any practical financial restrictions on
buying all grain available for purchase run directly contrary to the idea of a limit on purchasing.
Finally, in certain of the Implementation Plans (notably those related to rice) the quantity of eligible
production is set out: "The [product] eligible to be purchased at the minimum procurement price
refers to the in -grade product produced in [the relevant year] ."489 Similar or identical wording
appears in many Implementation Plans.490 To us, this is a clear indication that the legal instruments
do not impose any explicit limit on the QEP.
7.298. However, China argues that the regulatory framework underlying the challenged measures
reveals five factors implicitly limiting the quantity of production eligible: (i) the geographic scope of
application of the measures491; (ii) the temporal application of the programmes492; (iii) the activation
of the programmes only when the market price falls below the AAP and de-activation when the price
rises above493; (iv) minimum quality requirements on products which may be purchased494; and (v)
consumption of a "significant portion" of production on small-scale farms.495 China argues that by
building limitations into the operation of the market price support programme, it ensures that only
a limited amount of wheat and rice would be purchased at the AAP.
7.299. The United States, for its part, submits that China's wheat and rice Implementation Plans
specify the provinces or autonomous regions where farmers are eligible to receive the AAP for their
wheat, Indica rice and Japonica rice.496 This means to the United States that "the production in the
designated provinces is eligible for support, and in those provinces the state-owned enterprises will
purchase all proffered product. "497 Therefore, in the United States' view , the portion or amount of
the agricultural product produced that is entitled to receive the administered price is identified in the

485 See para. 7.100 above.
486 Article 5, 2012 Wheat Implementation Plan, (Exhibit USA-24/CHN-29B Revised), p. 3; Article 5, 2015
Wheat and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 4; Article 5, 2013 Wheat
Implementation Plan, (Exhibit USA-25/ CHN-19B Revised), p. 3; Article 5, 2014 Mid- to Late-Season Rice
Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 4; Article 5, 2012 Early-Season Indica Rice
Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 3; Article 5, 2014 Wheat and Early-Season Indica
Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), p. 4.
487 Article 5, 2015 Wheat and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 5;
Article 5, 2012 Wheat Implementation Plan, (Exhibit USA-24/CHN-29B Revised), p. 3; Article 5, 2014 Wheat
and Early-Season Indica Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), pp. 5 and 13 See also
Article 5, 2012 Early-Season Indica Rice Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 3
(referring to "actual needs").
488 China's response to Panel question Nos. 43 and 44, paras. 189 and 191.
489 2012 Early-Season Indica Rice Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 2. We
note that the United States' translated version of the same document uses the language "[t]he early-season
Indica rice for which minimum purchase prices will be implemented comprises within grade-standard products
that are produced in 2012". The Panel considers that these two translations are substantively the same in
content.
490 See, for example, 2013 Wheat Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p. 2; 2014
Wheat and Early-Season Indica Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), p. 3; 2014 Mid-
to Late-Season Rice Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 3; 2012 Early-Season Indica
Rice Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 2; 2013 Early-Season Indica Rice
Implementation Plan, (Exhibit USA-46/CHN-35B Revised), p. 2; 2012 Mid-to Late-Season Rice Implementation
Plan, (Exhibit USA-45/CHN-36B Revised), pp. 2-3; 2013 Mid-to Late-season Rice Implementation Plan, (Exhibit
USA-47/CHN-37B Revised), p. 4.
491 China's first written submission, para. 208.
492 China's first written submission, para. 209.
493 China's first written submission, para. 210.
494 China's first written submission, para. 211.
495 China's first written submission, para. 212.
496 United States' first written submission, para. 111.
497 United States' first written submission, para. 107.

measures as all production produced in the identified provinces. 498 China's quantity of production
eligible to receive the AAP is therefore the volume of wheat, Indica rice, and Japonica rice grown in
covered provinces or autonomous regions in the relevant year.499
7.300. We will now consider each of the factors raised by China to determine whether any of them
in fact limits the quantity of production eligible to receive the AAP.
7.4.5.3.1 Geographical scope of the programme
7.301. Regarding the first factor, China claims that each Implementation Plan expressly limits the
provinces in which the measures can operate and that for the years 2012 to 201 5 they covered (i)
six wheat-producing provinces; (ii) five early-season Indica rice-producing provinces; and (iii) eleven
mid- to-late season Indica and Japonica rice producing provinces. 500 According to China, t he six
wheat-producing provinces, which accounted for 79.2% of China's total wheat production in 201 5,
are Hebei, Jiangsu, Anhui, Shandong, Henan and Hubei.501 The five rice-producing provinces covered
by the measures for early -season Indica rice are Anhui, Jiangxi, Hubei , Hunan and Guangxi .502
Finally, the eleven rice-producing provinces covered by the measures for mid- to late-season Indica
rice and Japonica rice are Liaoning, Jilin, Heilongjiang, Jiangsu, Anhui, Jiangxi, Henan, Hubei, Hunan,
Guangxi and Sichua n.503 Together, the rice -producing provinces covered by the Implementation
Plans account for around 79% of China' s total rice production in 2015.504 We note that the parties
agree on the geographical coverage of the challenged measures. 505 The Panel shares this
understanding.
7.302. As a result, the data submitted by the parties, and the data being used by the Panel in its
calculations, is already limited geographical ly.506 The values designated as the QEP, by both the
United States and China, are not the total amount of production of the relevant product throughout
the whole of China, nor was that considered to be the case at any point. They only include data from
the regions specified in the measures, and thus this limitation has inherently been taken into
account. As stated by China, this limitation on geographical scope means that the QEP will initially
be limited to approximately 79% of total national production for wheat and rice (in 2015).507
7.4.5.3.2 Temporal scope of the programme
7.303. As for the second factor, China argues that each Implementation Plan establishes limits on
the time period in which the purchases at minimum prices may be implemented for the applicable
year. The following table presented by China summarizes these temporal limits:508
Table 7: Implementation periods of minimum procurement price for wheat and rice
Year Wheat Early Indica rice Mid- and late-season
Indica/Japonica rice
2012 21/05/2012-
30/09/2012
16/07/2012-
30/09/2012
16/09/2012-31/12/2012 (8 provinces);
16/11/2012-31/03/2013 (3 provinces)

498 United States' first written submission, para. 107.
499 United States' first written submission, para. 117.
500 China's first written submission, paras 68-69 (referring to Article 2, 2012 Wheat Implementation
Plan, (Exhibit USA-24/CHN-29B Revised), p. 2; Article 2, 2013 Wheat Implementation Plan, (Exhibit USA-
25/CHN-19B Revised), p. 2; Article 2, 2014 Wheat & Early-season Indica Rice Implementation Plan, (Exhibit
USA-26/CHN-30B Revised), p. 3; Article 2, 2015 Wheat & Rice Implementation Plan, (Exhibit USA-27/CHN-28B
Revised), p. 2.
501 China's first written submission, para. 70. For production data, see: China's Rural Statistical
Yearbook (2016), (Exhibit USA-76/CHN-33), p. 168.
502 China's first written submission, para. 71.
503 China's first written submission, para. 71.
504 China's first written submission, paras. 72 and 208.
505 The United States lists the same wheat- and rice-producing Chinese provinces that are covered by
the challenged measures. United States' first written submission, paras. 33 and 52.
506 See United States' answer to Panel question No. 94; United States' first written submission,
paras. 117-121; China's first written submission, paras. 68-72.
507 China's first written submission, para. 208.
508 China's first written submission, paras. 73-74.

2013 21/05/2013-
30/09/2013
16/07/2013-
30/09/2013
18/09/2013-31/01/2014 (8 provinces);
16/11/2013-31/03/2014 (3 provinces)
2014 21/05/2014-
30/09/2014
16/07/2014-
30/09/2014
16/09/2014-31/01/2015 (8 provinces);
01/11/2014-31/03/2015 (3 provinces)
2015 21/05/2015-
30/09/2015
16/07/2015-
30/09/2015
16/09/2015-31/01/2016 (8 provinces);
10/10/2015-29/02/2016 (3 provinces)

7.304. The Panel notes, as in paragraph 7.105 above , that generally, these time -periods
immediately follow the annual harvest period in the major wheat and rice produc ing provinces.509
Therefore, the measures are operating at the times during which the vast majority of relevant
products are being sold on the market.510 Indeed, it is during those periods that the supply will be
at its highest as most farmers are seeking to s ell their crops and the prices are most likely to fall
below the minimum level. In addition, there is nothing in the measures that would prevent producers
from timing the sale of their harvests at the AAP during the implementation periods. Therefore, the
Panel finds that restricting the availability of the AAP to certain time -periods does not affect the
eligibility of products to receive the AAP, nor can it lower the quantity of production eligible to receive
the AAP.
7.4.5.3.3 Activation and de-activation of the programme
7.305. Regarding the third factor, China submits that the Implementation Plans also provide that
purchases at minimum procurement prices are activated only "when the grain market price drops to
the minimum procurement pric e stipulated by the government" 511, and that i n addition to the
"switching-on" of the program me when prices fall below the minimum price, there is also a
"switching-off" of the program me in a city/county when the market price rises again above the
minimum price.512
7.306. In this regard, we note that this is simply how market price support operates in this case. It
is inherent to market price support measures that support will only be provided when the market
price falls below the AAP, which is a minimum price. If the market price is above the AAP, purchases
on the market will naturally not be made at the AAP. As soon as the market price falls below the
AAP513, all of a given product can be bought by the relevant entities at the AAP, until the price rises
again above the minimum level . China confirmed t hat if the market price for wheat and rice fell
below the AAP for an extended period of time, the relevant entities would continue to make
purchases without restriction while the measures were activated.514 Activation and deactivation does
not affect the eligibility of products to receive the AAP, nor can it lower the quantity of production
eligible to receive the AAP.
7.4.5.3.4 Minimum grain quality requirements
7.307. Regarding the fourth factor, China argues that only wheat and rice of a certain quality can
be purchased under the programmes. China cites, as an example, Article 4 of the 2015

509 United States' first written submission, para. 54.
510 Article 9, 2012 Wheat Implementation Plan, (Exhibit USA-24/CHN-29B Revised), p. 5; Article 9, 2014
Mid- to Late-Season Rice Implementation Plan, (Exhibit USA-48/CHN-31B Revised), p. 6; Article 9, 2015 Wheat
and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), p. 6; Article 9, 2013 Wheat
Implementation Plan, (Exhibit USA-25/CHN-19B Revised), p.5; Article 9, 2012 Early-Season Indica Rice
Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 5; Article 9, 2014 Wheat and Early-Season Indica
Rice Implementation Plan, (Exhibit USA-26/CHN-30B Revised), pp. 6 and 14.
511 China's first written submission, para. 75 (referring to Article 6, 2015 Wheat and Rice
Implementation Plan, (Exhibit USA-27/CHN-28B Revised), pp. 5-6).
512 China's first written submission, para. 79 (referring to Approving the activation of Wheat 2015
Minimum Procurement Implementation Plan in Linyi City in Shandong Province (Zhong Chu Liang Lu [2015]
No. 141), 25 June 2015, (Exhibit CHN-42B), p. 1).
513 Following a three-day monitoring period, and following approval by the State Administration of Grain.
See China's response to Panel question No. 36, paras. 151-152.
514 See China's response to Panel question No. 41, where China responded similarly through implication,
but noted that the scenario the Panel had described was virtually impossible, and highly unlikely to occur, due
to considerations of supply and demand (but crucially, not considerations regarding limitations on purchases).

Implementation Plan that provides that "[g]rain subject to the minimum procurement price refers
to the in -grade products produ ced in 2015 ", i.e. products which satisfy the minimum grade
requirements prescribed by the applicable national standards .515 Moreover, China's "Notice on
Issuing the Rules on Matters Related to Implementing National Standards of Grain and Oil Quality "
provides that grains below these grades shall not be purchased by the government.516
7.308. China has stated that grain of quality inferior to "grade 5" grain (the minimum quality 517
accepted for purchase under the domestic support measures), known as "out-of-grade" grain, is not
subject to a minimum purchase price and is not able to be procured under the Implementation
Plans.518 The question in relation to this argument is whether this amount of out-of-grade grain has
already been taken into account in the data provided as the "quantity of eligible production" by
either of the parties. If not, this limitation would have to be taken into account when calculating the
respective AMS and the relevant percentage of the production which is considered out -of-grade
would have to be excluded from the QEP, as the AAP would not be able to apply to this out-of-grade
product. This is reinforced by the wording found within many of the Implementation Plans. As noted
above, certain of these reports include the phrase "[t]he [product] eligible to be purchased at the
minimum procurement price refers to the in-grade product".519 Out-of-grade product is explicitly
excluded from eligibility.
7.309. Both China520 and the United States 521 have provided data relating to out -of-grade grain
though neither has expressly indicated whether this number has been taken into account in the data
provided by the parties.522 From each party's arguments we can assume that the data provided by
China does indeed take this limitation into account and deducts the relevant amount fro m what it
determines as the QEP 523, while the United States does not. The United States argues that the
amount is "negligible" and that "off grade grain is a de minimis volume each year".524
7.310. The United States argues that "China' s MPS Programs provide applied administered prices
for all grade-able grain." The United States contends that "[i]f a farmer plants wheat, rice, or corn,
especially if she does so in anticipation of receiving the applied administered price from the
government, the farmer intends to grow sell-able, grade-able grain."525 We agree that "no farmer
intends to grow "off grade" product"526, but we also note this does not change the fact that any
quantity of grain, which is determined to be out-of-grade, could not receive the AAP, and is therefore
ineligible to receive it.
7.311. This fourth limiting factor is compelling, in that it will directly impact the amount of product
that is eligible to receive the AAP. Given the above, the Panel will take this additional limitation into
account in its determination of China's QEP for the respective products.

515 China's first written submission, para. 82 (referring to Article 4, 2015 Wheat and Rice
Implementation Plan, (Exhibit USA-27/CHN-28B Revised), pp. 2-3).
516 China's first written submission, para. 82 (referring to 2010 National Standards of Grain Quality
Notice, (Exhibit CHN-43B Revised).
517 See Article 4, 2015 Wheat and Rice Implementation Plan, (Exhibit USA-27/CHN-28B Revised), pp. 2-
3; National Wheat Standard (GB1351-2008) (English translation), (Exhibit CHN-91B); National Rice Standard
(GB1350-2009) (English translation), (Exhibit CHN-92B).
518 See China's response to Panel question No. 25, paras. 110-113, referring to 2010 National Standards
of Grain Quality Notice, (Exhibit CHN-43B Revised), p. 2.
519 2012 Early-Season Indica Rice Implementation Plan, (Exhibit USA-44/CHN-34B Revised), p. 2.
(emphasis added)
520 China's response to panel question No. 93, Table 6.
521 United States' response to Panel question No. 93. China's State Administration of Grain, Standard &
Quality Center, Quality Survey Reports 2010-2016, (Exhibit USA-98).
522 The Panel notes the United States' argument that China has not provided sources supporting its
data, as well as both parties' acknowledgements that the data that was provided by both parties is consistent.
See also China's response to Panel question No. 93.
523 As China only considers production purchased to be eligible, any out-of-grade product that was not
purchased would necessarily not be included in China's reporting of its QEP.
524 United States' response to Panel question No. 93; United States' comments on China's responses to
question No. 93.
525 United States' response to Panel question No. 25, para. 103.
526 United States' response to Panel question No. 25, para. 103.

7.4.5.3.5 Consumption of grain on small-scale farms
7.312. Regarding the fifth and final factor, China argues that it is necessary to keep in mind that,
similar to the situation in many other developing countries, small -scale farms in China typically
consume a significant portion of the staple foods that they produce and that smallholder farmers
often put aside a portion of their wheat and rice production to be used either as food for the family,
animal feed, or to guard as seeds for the next planting year.527 According to China, these smallholder
farmers also use the wheat and rice they harvest as barter for ot her crops or goods or services.528
As a result, the total amount of wheat and rice available to be sold by farmers on the market or
under the minimum procurement price programme is, in China's view, smaller than the total amount
of wheat and rice actually produced.529
7.313. In this regard, China submits that it tracks the amount of non -marketable production of
wheat and rice through the use of a "commodity rate" - the ratio in any given year between the
annual amount of wheat or rice sold and the total production .530 China states that " between 9-18
percent of total wheat production in China in 2012 -2015, and between 17 -22 percent of total rice
production in China during the same period was consumed or retained by Chinese farmers, and not
available for purchase in the marketplace".531
7.314. As noted, the discussion in this section is about the amount of production that is eligible to
receive the AAP. Whether the grain is consumed on -farm or sold at the market, the pertinent
question is whether the grain that was produced would be able to benefit from the AAP if the seller
so desired. The Panel considers that, as China had not specified a limitation on how much of each
product could be purchased if the market price is below the AAP, the entirety of the crop produced
on the farm would be eligible, in the ordinary meaning of the word, to receive the AAP.
7.4.5.3.6 Conclusion
7.315. As a result, the Panel considers that, in addition to the geographical limitation already taken
into account in the data provided by the parties, only one of the above alleged limitations – the
volume of out-of-grade grain for each year - impacts the eligibility of the relevant products to receive
the AAP. Production which is determined to be out -of-grade cannot benefit from the AAP, and thus
cannot be included in the QEP when calculating AMS. In the absence of any explicit or implicit limits
in the challenged Chinese measures, the Panel understands the QEP, or quantity of production
eligible to receive the AAP, to be the entire volume of production in the relevant specified provinces,
less any out-of-grade grain.
7.4.5.4 Processing-level adjustment
7.316. We turn now to the last outstanding issue regarding the definition of the variables of the
MPS Formula, which relates to the processing -level adjustment that may be required to be applied
to some of these variables.
7.317. Simply put, this issue arises because of the differences between the FERP used in Rev.3.,
which refers to milled and semi-milled rice, and the AAP, which China provides for unmilled paddy
rice sold by farmers. 532 This fact requires the adjustment of some of these variabl es either to a

527 China's response to Panel question No. 54.
528 China's first written submission, paras. 84-86 (referring to John Davis & Ping Zong, "Household own-
consumption and grain marketable surplus in China", Applied Economics, 34:8 (2010), 969-974, (Exhibit CHN-
46); David Buschena, Vincent Smith and Hua Di, "Policy reform and farmers' wheat allocation in rural China: a
case study", Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Ltd, 2005,
(Exhibit CHN-47)).
529 China's first written submission, paras. 84-86.
530 China's first written submission, para. 85; 2016 Agricultural Costs and Benefits, (Exhibit CHN-4B),
p. 123.
531 China's first written submission, para. 86.
532 The United States explains that:

At harvest, rice is known as "paddy" or "rough rice." Typically, paddy rice must be processed or
milled for human consumption. The first stage of milling (cleaning/shelling) creates "brown rice,"
and the rice may be subsequently further polished (removing the bran) into white rice.

higher or lower level of processing: from unmilled rice to milled rice , or vice versa, to avoid a
situation where each of the variables reflects a different processing stage for rice.
7.318. Both parties agree on the necessity of this adjustment.533 However, they disagree on (i) the
extent of the adjustment; and (ii) the variable to which it should be applied. China argues that since
the data for the AAP and the QEP is presented at the processing level of unmilled rice, it is necessary
to adjust both of these to reflect the processing level of "semi-milled or wholly milled rice, whether
or not polished or glazed", that is, the level of the FERP.534 The United States argues for adjustment
of the FERP (milled rice) downwards, to match the unmilled level of the AAP and the QEP.
7.319. Table 9 outlines the various levels of processing for rice in the available data for the FERP,
the AAP and the QEP.
Table 8: Comparison of levels of processing for relevant rice data535
Variable Level of processing
Eligible production Paddy/unmilled rice536
AAP Paddy/unmilled rice537
FERP semi-milled or wholly -milled rice,
whether or not polished or glazed538

7.320. We note that China relies on an OECD report which explains that, in the first level of
processing, 80% of the volume of un milled paddy rice is retained as brown rice, while 20 % of the
volume of unmilled rice is discarded hulls. In the next level of processing, to produce milled rice,
another 10% of the volume is lost. 539 For these reasons, China contends that the average "milling
rate" or "milling yield" of unmilled rice to milled brown rice is 70%540 and that this is consistent with
the United States' own statistics, which applied a conversion rate of 70% to express the relationship
between unmilled rice and milled rice, as exported.541 China's adjustment thus uses a "milling rate"
of 70% to adjust both the volume of eligible production and the AAP from unmilled rice to milled
rice, which China contends is the same rate as used in Rev.3.542 China is therefore maintaining that
the rate used to adjust the volume in the QEP should similarly be applied to the adjustment of price
in the AAP, because "the volume/quantity effect of further processing rice is the predominant factor
affecting the price of rice at different levels of processing."543
7.321. For its part, t he United States explains that it has constructed a price-based adjustment
factor based on a comparison of available monthly pricing data for milled rice versus unmilled rice

Agricultural production statistics typically report rice production on a paddy or rough basis, since
this accounts for the entire weight of the grain, but milled and polished rice accounts for the
majority of international rice exports and imports. (United States' first written submission,
para. 45.)

533 This point was confirmed by the panel in Korea – Various Measures on Beef which found that "both
the FERP and the AAP must be calculated at an equivalent stage of processing or converted accordingly". Panel
Report, Korea – Various Measures on Beef, para. 828.
534 China's response to Panel question No. 99.
535 There is no disagreement between the parties on the level of processing of the different variables.
536 China's first written submission, para. 236; China's response to Panel question No. 38, para. 162.
537 China's first written submission, para. 236; China's response to Panel question No. 38, para. 162.
538 China's tables of supporting material, Appendix DS 5-4: f.o.b. Prices for Corn, Japonica rice and
Indica rice, WT/ACC/CHN/38/Rev.3, (Exhibit USA-43).
539 OECD 2016 Document on Compositional Considerations for New Varieties of Rice, (Exhibit CHN-65),
Table 5.
540 China's first written submission, para. 241 (referring to the OECD 2016 Document on Compositional
Considerations for New Varieties of Rice, (Exhibit CHN-65), Table 5).
541 China's first written submission, para. 228 (referring to United States Department of Agriculture,
World Agricultural Supply and Demand Estimates, August 2017, U.S. Rice Supply and Use (Rough Equivalent of
Rough and Milled Rice), (Exhibit CHN-66)).
542 China's first written submission, para. 235 (referring to Conversion rate applied in WT/ACC/CHN/38/,
(Exhibit CHN-64)).
543 See China's response to Panel question No. 38, para. 170, where China states that the use of a
volume-based conversion rate is also reasonable and appropriate for the price-based conversion required here,
and consistent with an objective assessment of the facts.

in China544 and that the calculated adjustment rate of milled to unmilled rice in China is 60%.545 This
60% price conversion rate was developed by comparing published prices of milled rice to unmilled
rice and calculating an average rate for the 12 year period of available data.546 Any adjustment to a
price within the equation, according to the United States, should be made at a rate of 60%.
7.322. We agree with the parties that a processing -level adjustment is necessary to avoid a
mathematically inappropriate comparison . However, and as mentioned above, we observe two
issues which must be resolved before applying such an adjustment : (i) the variable or variables
which should be adjusted; and (ii) the rate of the adjustment.
7.4.5.4.1 Which variable should be adjusted
7.323. With respect to the question of which variables should be adjusted , we consider that it is
appropriate to first determine whether the Agreement on Agriculture provides any guidance in this
regard.
7.324. The starting point of our analysis is the text of the Agreement on Agriculture. In this regard,
there are two relevant sections: (i) Paragraph 7 of Annex 3 states that the AMS "shall be calculated
as close as practicable to the point of first sale of the basic agricultural product concerned"; and (ii)
Article 1(b) of the Agreement on Agricult ure provides that that ""basic agricultural product" in
relation to domestic support commitments is defined as the product as close as practicable to the
point of first sale as specified in a Member's Schedule and in the related supporting material".
7.325. These provisions furnish some guidance in our determination of the most appropriate
variable to be adjusted. However, they do not, in themselves, set out a mandatory rule as to the
variable that should be adjusted.
7.326. We now turn to assess the possible guidance afforded by the Agreement on Agriculture in
order to be able to calculate China's AMS for the most appropriate rice product at a level closest to
the point of first sale.
7.4.5.4.1.1 Basic agricultural product
7.327. Article 1(b) of the Agreement on Agriculture states that ""basic agricultural product" in
relation to domestic support commitments is defined as the product as close as practicable to the
point of first sale as specified in a Member' s Schedule and in the related supporting material". The
phrase is also relevant in Annex 3: Paragraph 1 states " subject to the provisions of Article 6, an
Aggregate Measurement of Support (AMS) shall be calculated on a product -specific basis for each
basic agricultural product receiving market price support"; Paragraph 7 provides that " [t]he AMS
shall be calculated as close as practicable to the point of first sale of the basic agricultural product
concerned. Measures directed at agricultural processors shall be included to the extent that such
measures benefit the producers of the basic agricultural products"; and Paragraph 9 indicates that
"[t]he fixed external reference price … shall generally be the average f.o.b. unit value for the basic
agricultural product concerned in a net exporting country … in the base period."
7.328. The plain meaning of the phrase "basic agricultural product" is important for our purposes.
"Basic" is defined as " [o]f, pertaining to, or forming a base "547 and "constituting or serving as the

544 United States' first written submission, para. 115.
545 United States' first written submission, paras. 115-116 (referring to the Agreement on Agriculture,
paragraph 9 of Annex 3; Panel Report Korea – Various Measures on Beef, para. 828 (stating that "the fixed
external reference price must be at (or converted to) the same stage in the processing chain as the applied
administered price for the basic agricultural product(s) concerned")).
546 See China National Bureau of Statistics, China Yearbook of Agricultural Price Survey (2006), (Exhibit
USA-69); China National Bureau of Statistics, China Yearbook of Agricultural Price Survey (2008), (Exhibit
USA-70); China National Bureau of Statistics, China Yearbook of Agricultural Price Survey (2012), (Exhibit
USA-71); 2014 China Yearbook of Agricultural Price Survey, (Exhibit USA-72); China National Bureau of
Statistics, China Yearbook of Agricultural Price Survey (2016), (Exhibit USA-99).
547 Oxford English Dictionary Online, defintition of "basic", available at: <OED Online,
http://www.oed.com/view/Entry/15848>, accessed on 22 July 2018.

basis or starting point".548 A "product" is "[a]n object produced by a particular action or process"549
while "agricultural" is "[o]f, relating to, or used in agriculture" 550 which is "the practice of growing
crops, rearing livestock, and producing animal products". 551 As such, a "basic agricultural product"
in the current case would be an object produced through the practice of growing crops which forms
a base or starting point for potential further processing.
7.329. China argues that the phrase "as close as practicable to the point of first sale" is used in the
context of identifying the basic agricultural product. This phrase allegedly emphasizes that the basic
agricultural product specified in a Member's schedule is not simply an identification of the product
variety, but also an identification of the processing level of the product. According to China, the key
to identifying the basic agricultural product lies in the phrase "as specified in a Member's Schedule
and in the related supporting material" which suggests that the basic agricultural product, or more
specifically, the p rocessing level of the basic agricultural product, can be found in a Member 's
schedule and supporting material. In this regard, China states that "Rev.3 … specified the processing
level for [Indica rice and Japonica rice], which is "semi-milled or wholly milled rice, whether or not
polished or glazed".552"553
7.330. The United States argues that "for Indica and Japonica rice, there is no indication of the type
of rice, either for the external reference prices or the AAPs. China asks the Panel to infer a chos en
point of sale and a type of "basic agricultural product" based on the comparison on various draft
Supporting Tables, none of which contains any explicit written reference to this point of sale , and
the recollection of China's negotiators554".555
7.331. Indica rice and Japonica rice were net export products in China's 1996-1998 base period and
thus their external reference prices were determined by the f.o.b. prices, on the basis of China's
Customs statistics.556
7.332. The Panel considers that the reference in Paragraph 9 of Annex 3 to "the average f.o.b. unit
value for the basic agricultural product concerned ..." requires that the AAP and the FERP must both
be for the "basic agricultural product". This reasoning is reinforced by Paragraph 7, discussed further
below, which states that AMS "shall be calculated as close as practicable to the point of first sale of
the basic agricultural product concerned".
7.333. In addition, as pointed out by the United States, the inclusion of the phrase: " measures
directed at agricultural proc essors shall be included to the extent that such measures benefit the
producers of the basic agricultural products" in Paragraph 7 of Annex 3 reinforces the understanding
that product-specific AMS should be calculated so as to measure the benefit at the first point of sale,
which typically would involve the producers.557 According to China, the United States' approach here
ignores the purpose of this part of Paragraph 7, which China alleges is to eliminate (from the AMS
calculation) measures that do not constitute domestic support because they are not provided "in
favour of domestic producers" or "in favour of agricultural producers".558 We disagree. The Panel is
required to holistically interpret the relevant provisions . In this case , this means interpreting the
meaning of "basic agricultural product" in light of the specific exclusion of measures directed at

548 Merriam-Webster Online, definition of "basic", available at: < https://www.merriam-
webster.com/dictionary/basic>, accessed on 22 July 2018 .
549 Oxford English Dictionary Online, defintition of "product", available at: <OED Online,
http://www.oed.com/view/Entry/151988>, accessed on 22 July 2018.
550 Oxford English Dictionary Online, defintition of "agricultural", available at: OED Online,
<http://www.oed.com/view/Entry/4178>, accessed on 22 July 2018.
551 Oxford English Dictionary Online, defintition of "agriculture", available at: OED Online,
<http://www.oed.com/view/Entry/4181>, accessed on 22 July 2018.
552 See the fixed external reference prices for Indica rice and Japonica rice in Table DS5 of Rev.3, which
exactly match the fixed external reference prices for Indica rice and Japonica rice in Appendix DS 5-4 of Rev.3.
See also Conversion rate applied in WT/ACC/CHN/38/, (Exhibit CHN-64), which indicates that the data for the
applied administered price and the eligible production for Indica rice and Japonica rice contained in DS5 of
Rev.3 had been adjusted to reflect milled rice data.
553 China's response to Panel question No. 99, para. 317. (footnote original)
554 Conversion rate applied in WT/ACC/CHN/38, (Exhibit CHN-64).
555 United States' response to Panel question No. 99, para. 179. (footnote original)
556 See WT/ACC/CHN/38/Rev.3, endnote 17(2), and Appendix DS 5-4, (Exhibit USA-43).
557 United States' response to Panel question No. 99, para. 176.
558 China's comments on the United States' response to Panel question No. 99, para. 247 (referring to
Agreement on Agriculture, Article 3.2, 6.1, 6.3, 7.1 and 7.2(a).

agricultural processors from the AMS calc ulation, unless those measures benefit agricultural
producers.
7.334. What the Panel has to determine in this part of its analysis, therefore, is the particular basic
agricultural product in this case. Importantly, while the definition of "basic agricultural pro duct" in
Article 1(b) of the Agreement on Agriculture includes a reference to a Member's schedule, Paragraph
7 of Annex 3 refers only to the "point of first sale" of the agricultural product concerned.
7.335. The United States may be correct in its assertion that China's tables of supporting material
do not explicitly set out the level of processing of each of the rice products at issue here, contrary
to China's argument. However, China's tables of supporting material do refer to HS Code 10063000
for Japonica rice and 10063000 for Indica rice, in Appendix DS 5-4: "f.o.b. Prices for Corn, Japonica
Rice and Indica Rice ". These HS Codes refer to "semi -milled or wholly-milled rice, whether or not
polished or glazed". We consider that while China is able to specify the basic agricultural product in
its Schedule, this may not necessarily extend to specifying the level of processing, especially for the
purposes of calculating AMS . In this regard, while China has include d the HS code of milled rice
variants to which a reader can refer , it has identified each of "Indica rice" and "Japonica rice" by
name.
7.336. The product included in the tables of supporting material (which, in this particular instance,
is milled rice) has an f.o.b. price to determine the FERP. We understand that milled rice is included
for the purposes of demonstrating an f.o.b. price as required by Paragraph 9 (as unmilled rice is
generally not exported or imported to any significant degree ). This product does not necessarily
accord with the overarching requirement that AMS should be calculated as close as practicable to
the point of first sale, as further discussed below. We see a fundamental disconnect between China's
specification of the "basic agricultural product" in its tables of supporting material, and the "point of
first sale" of rice. It is not necessary to decide which of these would prevail in the abstract. Our task
here is to calculate the AMS for each relevant product. This is to be done as close as practicable to
the point of first sale.
7.337. The Panel needs to determine the basic agricultural product here for the purposes of properly
calculating China's AMS. There is no obligation to determine the basic agricultural product on the
basis of China's tables of supporting material alone, and we will also consider the "point of first sale"
which would accord most with the ordinary meaning of "basic agricultural product", as defined above.
We understand that the relevant product in China's tables of supporting material has been specified
as "Indica rice" and "Japonica rice" . We turn to examine the point of first sale of such rice, as
specifically directed by Paragraph 7 of Annex 3.
7.4.5.4.1.2 Point of first sale
7.338. Paragraph 7 of Annex 3, concerned with the AMS calculation itself, states that the AMS "shall
be calculated as close as practicable to the point of first sale of the basic agricultural product
concerned".559
7.339. The United States argues that the phrase " point of first sale " indicates that "the AMS is to
be calculated in relation to the first instance the commodity is sold " and that "[t]he relevant point
of first sale in this dispute is when Chinese farmers in the relevant provinces sell their wheat, Indica
rice, [or] Japonica rice, … to the Chinese government or entities purchasing at the direction of the
Chinese government".560 Specifically in regard to rice, the United States submits that the first sale
defined in this way would be on an unmilled rice basis and that therefore the FERP for rice must be
converted to an unmilled rice equivalent value.
7.340. China, for its part, argues that the phrase "as close as practicable to the point of first sale "
emphasizes that the basic agricultural product specified in the Schedule is not simply an identification
of the product variety, but also an identification of the processing level of the product.561 For China,

559 See also Agreement on Agriculture, Article 1(b) which defines "basic agricultural product" in relation
to domestic support commitments … as the product as close as practicable to the point of first sale as specified
in a Member's Schedule and in the related supporting material".
560 United States' response to Panel question No. 99.
561 China's response to Panel question No. 99.

the words "as close as practicable" indicate that the basic agricultural product is not necessarily the
product at the beginning of the processing chain sold at the point of first sale, but rather, that it can
be a further processed product. China argues that it has specified in its tables of supporting material
that the processing level for the two varieties of rice is "semi-milled or wholly milled rice, whether
or not polished or glazed ", and subsequently that this is the basic agricultural product related to
rice.562
7.341. We believe that the relevant point of first sale of the basic agricultural product would be the
point at which Chinese producers of rice in the relevant provinces sell their product to the
government or its relevant purchasing entities. This is because, as outlined in Paragraph 7 of Annex
3, the calculation of AMS is aimed at assessing measures which benefit producers of basic agricultural
products. In other words, it is the point at which the measure acts to benefit the producers that is
relevant here (that is, the point at which the rice producers sell their rice at the AAP). In addition ,
the plain meaning of "point of first sale" indicates that AMS is to be calculated in relation to the first
instance the commodity is sold. 563 The price at the point of first sale for rice would be the "farm -
gate", "paddy" or "unmilled" price of both Indica and Japonica rice.
7.342. Mindful of this , and i nterpreting the term "basic agricultural product" holistically in the
context of the Agreement on Agriculture, we consider that the basic agricultural product, as close as
practicable to the point of first sale, is unmilled (Indica and Japonica) rice.
7.343. The Panel notes that, mathematically, there is no difference in the resulting MPS when only
the FERP is adjusted to reflect an unmilled equivalent level , or when both the AAP and QEP are
adjusted to reflect milled equivalent levels if the price and quantity conversion rates applied are the
same (that is, for example, if both price and quantity are adjusted at a rate of 70% ). The United
States argues in this regard that the correct rate to use for adjusting price, based on its calculations,
is not 70%, but 60%.564
7.344. Adjustment rate: 𝑟 for quantities and prices
Calculating MPS at a milled level:

𝑀𝑃𝑆 = (𝐴𝐴𝑃
𝑟 − 𝐹𝐸𝑅𝑃) ∗ 𝑟𝑄 = 𝑟𝑄 ∗ 𝐴𝐴𝑃
𝑟 − 𝑟𝑄 ∗ 𝐹𝐸𝑅𝑃 = (𝑨𝑨𝑷 − 𝒓𝑭𝑬𝑹𝑷) ∗ 𝑸

Calculating MPS at an unmilled level:

𝑀𝑃𝑆 = (𝑨𝑨𝑷 − 𝒓𝑭𝑬𝑹𝑷) ∗ 𝑸

7.345. Finally, China contends that adjustment of the fixed external reference price is not legally
permissible. China submits that if any price needs to be adjusted for purposes of calculating AMS,
so as to permit a proper comparison of prices for the same product at the same level of processing
and trade, then the AAP must be adjusted, because that price is not "fixed".565
7.346. The Panel does not find this argument convincing. As noted by the United States, Paragraph
9 of Annex 3 states explicitly that "the fixed reference price may be adjusted for quality differences
as necessary" .566 This indicates that China's argument regarding the immutable nature of the
reference price due to the inclusion of the word "fixed" is misplaced. Clearly, on the wording of
Paragraph 9 itself, the Agreement on Agriculture allows for the adjustment of the FERP and thus the
word "fixed" would not act to prevent the adjustment of the FERP if the Panel considers this
necessary or appropriate.
7.347. In light of the above, we consider that in order to properly calculate the relevant AMS for
Indica and Japonica rice we will adjust the FERP downwards to a level equivalent to unmilled rice.

562 China's response to Panel question No. 99, para. 317.
563 As noted by the United States. See United States' response to Panel question No. 99, para. 176.
564 United States' first written submission, para. 116.
565 China's first written submission, para. 246.
566 United States' second written submission, paras. 97-98.

This approach ensures calculation of the relevant AMS as close as practicable to the p oint of first
sale of the basic agricultural product.
7.4.5.4.2 Adjustment rate to be used in this case
7.348. We have determined that the FERP will be adjusted to reflect an unmilled equivalent level.
We now move to determine the most appropriate rate at which to adjust the FERP. As noted
previously there are two potential options presented by the parties here: a rate of 60%, which the
United States argues must be applied to the FERP (or to any price -based adjustment)567, or a rate
of 70% which China initially argues should apply to both the QEP and the AAP (originally a quantity-
based adjustment, identically applied to price). 568 China has stated, however, that "to adjust
downwards the fixed external reference prices to reflect the processing level of paddy rice, … the
conversion rate should again be 70%, such that the milled rice fixed external reference price would
have to be multiplied by 0.7" .569 China has provided data for the adjusted FERP in this regard. 570
The ability to use either of these adjustment rates depends, first, on the availability of suitable data
provided by the parties to the Panel.
7.349. A major point of contention between the parties is the use, by the United States, of "polished
long-grained non -glutinous rice a nd polished round -grained rice" in determining its price -based
adjustment rate. This rate allegedly results from a n incorrect product comparison, according to
China.571 China argues that the necessary adjustment rate is one that flows from a comparison
between: (i) the rice products exported by China in 1996 -1998 (and on which the FERP is based) ;
and (ii) unmilled rice to which the minimum procurement price applied in 2012-2015. For China, the
product on which the 1996-1998 FERP is based is "semi-milled or wholly milled rice, whether or not
polished or glazed", which is a broad category of rice and includes cheaper semi -milled rice and
broken rice, as well as more expensive forms of rice, such as polished rice with broken rice removed.
China contends that the United States has assumed that the product to use as the proxy for the
external reference price is the highest quality product – "polished long-grained non-glutinous rice
and polished round-grained rice", which is naturally the most expensive.572 As the 1996-1998 FERP
was based on " semi-milled or wholly milled rice, whether or not polished or glazed ", it would be
incorrect to compare the price used there with only polished rice (the highest quality product) in the
current calculations, China argues. The United States , on the other hand, in its second written
submission, argues that China's contention that polished rice is a significantly more refined product
than milled rice is inaccurate, as polished rice is milled rice .573 China's contention appears to be
confirmed by Figure 5 of China's first written submission, an OECD overview of rice at various stages
of processing, reproduced below.574 This problem is exacerbated, according to China, as the 60%
rate is based on the use of Chinese retail prices for polished long-grained and polished round rice575
while the external reference price set out in Rev.3 is a wholesale f.o.b. export price.576

567 United States' response to Panel question No. 101.
568 China's response to Panel question No. 101.
569 China's response to Panel question No. 101.
570 China's response to Panel question No. 101, table 14.
571 China's response to Panel question No. 38.
572 China's first written submission, para. 248 (referring to 2014 China Yearbook of Agricultural Price
Survey, (Exhibit USA-72)).
573 United States' second written submission, para. 103.
574 China's first written submission, para. 240, Figure 5.
575 China's first written submission, para. 250 (referring to 2014 China Yearbook of Agricultural Price
Survey, (Exhibit USA-72)).
576 China's first written submission, para. 250.

Figure 3: OECD overview of rice at various stages of processing
 Source: China's first written submission, Figure 5.577
7.350. As correctly noted by China, the wholesale f.o.b. export price, as set out in Rev.3, covers
both polished rice, and unpolished , or broken rice.578 Restricting that product category to polished
rice, as the United States suggests, would result in taking as the basis for adjust ment the most
expensive type of rice, leaving out the unpolished or broken rice. This approach is, in our view,
incorrect, because it would fail to take into account prices of less expensive types of rice that are
covered by the wholesale f.o.b. export price mentioned in Rev.3. The so-derived conversion rate of
60% would thus be distorted and we cannot use it as the basis for our calculations.
7.351. China argues that, under these circumstances, the use of a volume-based conversion rate
would be appropriate where no better price-based conversion rate is available.579 We agree that in
the absence of more accurate price-based data for the conversion, we can complete our calculations
based on a less-preferable, but equally valid, volume-based conversion rate.580
7.352. We thus conclude that because of the absence of appropriate price-based conversion data,
we will make the adjustment to the FERP using the volume-based conversion rate of 70%.

577 OECD Environment Directorate, Revised Consensus Document on Compositional Considerations for
New Varieties of Rice (Oryza sativa): Key Food and Feed Nutrients, Anti-nutrients and Other Constituents,
2016, (Exhibit CHN-65).
578 The United States relied on data attributable to the "rural free market," which it considers may
underestimate the differential between paddy rice prices and export milled or semi-milled rice prices because
they do not account for the transportation, bagging or packaging, and other costs associated with export.
United States' second written submission, para. 103.
579 China's response to Panel question No. 38, para. 171.
580 While we agree with China's suggestion to use the volume-based conversion rate of 70%, this
conclusion should not be read as endorsing China's argument that the determination of the adjustment rate
should be consistent with the contents of Rev.3. See China's first written submission, paras. 234-235, 243-
251, China's response to Panel question No. 100. While certain elements of China's CDM found within Rev.3
could be relevant for Panel's determination of current AMS, we do not consider the fact that China had
purportedly utilized an identical conversion rate in Rev.3 to be binding or determinative when adjusting the
variables at this stage of our assessment.

7.4.5.4.3 Conclusion on the processing-level adjustment
7.353. To summarize the conclusions that we have arrived at in this section on the processing level
adjustment, we will (i) adjust the FERPs for Indica and Japonica rice, which is the only variable at a
higher level of processing than "unmilled" , and (ii) make the adjustment using the volume -based
conversion rate of 70%, due to the absence of appropriate price-based conversion data.
7.4.6 Calculation of China's Current Total AMS
7.354. We have resolved the issues before us relating to the definition and calculation of each of
the variables of the MPS formula. Br iefly, the AAP is the minimum purchase price identified in the
annual Wheat MPP Notices581 and Rice MPP Notices582 (at Grade 3).583 The FERP to be used in this
case is based on the same years used to calculate China's Base Total AMS, i.e. 1996-1998. For Indica
and Japonica rice, the FERP will be adjusted downward at a rate of 70% to reflect the level of
unmilled rice used in the AAP and QEP. The QEP to receive the AAP is the entire volume of production
in the relevant specified provinces, less any out -of-grade gr ain. Furthermore, the total value of
production for the various products is calculated by multiplying the total amount of wheat (or rice)
produced in China in a certain year by the producer price (or farm gate price) of wheat (or rice) for
that year.584
7.355. These legal and technical considerations will guide o ur calculation of China's Current Total
AMS.
7.356. In this section, we will assess the parties' arguments regarding the prices and quantities that
should inform the calculation of China's domestic support in t he form of market price support for
rice and wheat, in the years 2012 -2015. After doing so and having established the appropriate
figures to be used, we will proceed to make our own calculations of the market price support
component of China's AMS and Current Total AMS for the commodities and in the years at issue. We
will conclude by assessing whether China is in compliance with its relevant domestic support
obligations.
7.357. We begin by addressing the general framework we will use to review the numbers and
supporting evidence that have been presented over the course of these proceedings. In this regard,
we note that in contrast to the findings in the previous sections in relation to the legal definition of
the AAP, the FERP and the QEP, the present assessment is mainly factual in nature.
7.358. In this connection, we asked the parties how the Panel is to assess the calculations presented
by them, including the extent to which we can or should re -run the numbers presented by the
parties. We also asked them how we shou ld treat any discrepancies or inconsistencies in the data
presented by them. For the United States, the Panel should review the calculations, along with the
relevant source material underlying these calculations. The United States also argues that the Panel
should seek to resolve any discrepancies in the calculations by recourse to the source material, and
that, as the trier of fact, the Panel should seek to resolve any discrepancies by evaluating the
respective pieces of evidence to determine their reliabi lity and probative value. 585 China generally
agrees with the United States and posits that in its role as trier of fact, the Panel may make factual

581 2012 Wheat Annual Notice, (Exhibit USA-20/CHN-18B), p. 1; 2013 Wheat Annual Notice (Exhibit
USA-21/CHN-93B) p. 1; 2014 Wheat Annual Notice, (Exhibit USA-22/CHN-20B), p. 1; 2015 Wheat Annual
Notice, (Exhibit USA-23/CHN-21B), p. 1.
582 2012 Rice Annual Notice, (Exhibit USA-39/CHN-23B), p. 1; 2013 Rice Annual Notice, (Exhibit USA-
40/CHN-24B), p. 1; 2014 Rice Annual Notice, (Exhibit USA-41/CHN-25B), p. 1; 2015 Rice Annual Notice,
(Exhibit USA-42/CHN-26B), p. 1.
583 These figures were multiplied by 20 in order to derive a price per ton.
584 Both the United States and China use the same source to determine the producer price (or farm gate
price) for wheat and rice. China's Farm Gate Prices 1995 to 2015, (Exhibit USA-79), Agricultural Product Cost
and Returns 2010-2016, (Exhibit USA-81/CHN-67); China National Development and Reform Commission,
Compilation of Materials on Agricultural Product Cost and Returns (2016), (Exhibit USA-81/CHN-67). Prices are
available for early-, mid-, and late-season Indica rice, and Japonica rice. It appears that the United States has
used the producer price for mid-season Indica rice only as the producer price for mid- to late-season Indica
rice in its calculations, as noted by China. China's comments on the United States' response to Panel question
No. 96.
585 United States' response to Panel's question No. 63 (second substantive meeting).

findings that differ from those advocated by the parties, provided that the Panel's findings have an
evidentiary basis in the record, and they are otherwise consistent with the requirement to make an
objective assessment. In addition, China argues that the Panel's mandate extends to an objective
assessment of any discrepancies in the data, and to making factual fi ndings that resolve any such
discrepancies.586
7.359. We note that under Article 11 of the DSU, we are directed to make an objective assessment
of the facts of the case and the applicability of and conformity with the relevant covered agreements.
In our view and in the context of this case, this implies that we should not accept the calculations
and numbers presented by the parties before carefully examining their accuracy and reliability. In
addition, our task allows us to resolve any inconsistencies or discrepancies that we find by resorting
to the original sources of the data and by running our own calculations on the basis of the available
evidence in the record. In this vein, we asked the parties several questions that sought to clarify
certain inconsistencies in the numbers presented in the parties' written submissions.587 The parties
clarified that most of these inconsistencies were due to differences in the units of measurement
used, the number of decimal places, rounding, and some errors in the transposition of numbers
when aggregating them across different tables.
7.360. After carefully assessing each of these issues and the evidence before us, we decided to
standardize the metrics to be used into millions of tons, for quantities, and renminbi per ton, for
prices. We also decided to work with all the decimal places available so as to avoid any inaccuracies
resulting from rounding. Finally, we ran our own calculations to either confirm or correct the ones
presented by the parties. After doing so, we presented the parties with a table that summarized our
assessment regarding the different figures needed for the calculations of China's Total AMS and
Current Total AMS.588 The parties agreed with most of the numbers presented but, in some instances,
they submitted additional corrections or revisions. We have taken due note of these.
7.361. The tables below present the resulting information.
7.4.7 MPS Calculations
7.4.7.1 Wheat
7.362. Table 9 sets out all the variables required to run the MPS formula and derive a percentage
to compare against China's 8.5% de minimis level, namely the AAP, the FERP, the QEP and the total
value of production. First, we multiply the total national production of wheat by the producer
price for each year, to calculate the total value of production of wheat.
7.363. The table then determines the QEP. This is done by (i) setting out the volume of production
of wheat in each of the covered provinces and then (ii) subtracting the out-of-grade production
from each of these provinces. The QEP per province is then totalled to determine the final QEP.
7.364. The AAP is the price set out in the relevant measures , multiplied by 20 to obtain a price
expressed in renminbi/ton.
7.365. The FERP is the average of three external reference prices for the years 1996-1998, set out
in Appendix DS 5-3 of China's tables of supporting material.
7.366. To calculate an MPS value, first the FERP is subtracted from the AAP. The resulting price
differential is multiplied by the QEP. The resulting monetary value is the MPS for a specific year.
Finally, this MPS is divided by the total value of production above to arrive at a percentage
which is then compared to China's 8.5% de minimis level.

586 United States' response to Panel's question No. 63 (second substantive meeting).
587 See United States' response to Panel's question Nos. 72-74 (first substantive meeting).
588 See United States' response to Panel's question No. 96. See also (Exhibit CHN-88).

Table 9: Calculation of MPS for wheat from 2012-2015
Wheat MPS Calculation Units 2012 2013 2014 2015
Total national production589 million tons 121.023 121.926 126.208 130.185
Producer price590 ¥/ton 2,166.20 2,356.20 2,411.80 2,328.60
Total value of production million ¥ 262,160.02 287,282.04 304,388.45 303,148.79
Volume of production by
covered province591
Hebei million tons 13.377 3.872 14.299 14.350
Jiangsu million tons 10.488 11.013 11.604 11.740
Anhui million tons 12.940 13.320 13.936 14.110
Shandong million tons 21.795 22.188 22.638 23.466
Henan million tons 31.774 32.264 33.290 35.010
Hubei million tons 3.708 4.168 4.216 4.209
Total million
tons 94.082 96.825 99.983 102.885
Out-of-grade percentage592
Hebei percentage 0.0 1.0 0.0 0.0
Jiangsu percentage 2.0 1.0 0.3 1.0
Anhui percentage 1.0 0.0 0.0 1.7
Shandong percentage 0.0 1.0 0.2 0.0
Henan percentage 1.0 0.0 0.0 0.0
Hubei percentage 8.0 0.0 0.0 0.0
QEP per provinces
Hebei million tons 13.377 13.733 14.299 14.350
Jiangsu million tons 10.278 10.903 11.569 11.623
Anhui million tons 12.811 13.320 13.936 13.870
Shandong million tons 21.795 21.966 22.593 23.466
Henan million tons 31.456 32.264 33.290 35.010
Hubei million tons 3.411 4.168 4.216 4.209
MPS Calculation
QEP million
tons 93.128 96.354 99.903 102.528
AAP593 ¥/ton 2,040.00 2,240.00 2,360.00 2,360.00
Average 1996-1998 FERP
(c.i.f price)594 ¥/ton 1698.13 1698.13 1698.13 1698.13
Wheat MPS
= (AAP-FERP)*QEP
million
RMB 31,837.83 52,211.49 66,122.74 67,860.03

589 China's first written submission, para. 87, Table 4. China's Rural Statistical Yearbook (2013), (Exhibit
CHN-49), p. 152; China's Rural Statistical Yearbook (2015), (Exhibit CHN-50), p. 164; China's Rural Statistical
Yearbook (2016), (Exhibit USA-76/CHN-33), p. 168; United States' first written submission, para. 122; United
States' response to Panel question Nos. 72-73; China's Statistical Yearbook, Table 12-10, (2016), (Exhibit
USA-18); China's Statistical Yearbook, Table 12-10 (2015), (Exhibit USA-73); China's Statistical Yearbook,
Table 12-10 (2014), (Exhibit USA-74); China's Statistical Yearbook, Table 13-15 (2013), (Exhibit USA-75)
China's Rural Statistical Yearbook (2016), Table 7-17 (Exhibit USA-76/CHN-33).
590 China's first written submission, para. 272, Table 21; Agricultural Product Cost and Returns 2010-
2016, (Exhibit USA-81/CHN-67). United States' first written submission, para. 122; China's Farm Gate Prices
1995 to 2015 (Exhibit USA-79).
591 United States' response to Panel Question No. 73, Table 8 (first substantive meeting). China's
Statistical Yearbook, Table 12-10, (2016), (Exhibit USA-18); China's Statistical Yearbook, Table 12-10 (2015),
(Exhibit USA-73); China's Statistical Yearbook, Table 12-10 (2014), (Exhibit USA-74); China's Statistical
Yearbook, Table 13-15 (2013), (Exhibit USA-75).
592 China's response to Panel question No. 93, Table 6; United States' response to Panel question No.
93, China's States Administration of Grain, Standard & Quality Centre, Quality Survey Reports 2010-2016
(Exhibit USA-98).
593 China's first written submission, para. 270, Table 20; 2012 Wheat Annual Notice, (Exhibit USA-
20/CHN-18B); 2013 Wheat Implementation Plan, (Exhibit USA-25/CHN-19B Revised); 2014 Wheat Annual
Notice, (Exhibit USA-22/CHN-20B); 2015 Wheat Annual Notice, (Exhibit USA-23/CHN-21B). United States' first
written submission, para 111, Table 6; 2013 Wheat Annual Notice (Exhibit USA-21/CHN-93B).
594 WT/ACC/CHN/38/Rev.3, Appendix DS 5-3, (Exhibit USA-43).

Wheat MPS Calculation Units 2012 2013 2014 2015
MPS / Total value of
production percentage 12.14 18.17 21.72 22.39

7.4.7.2 Rice
7.367. The calculations for rice (Japonica, early-season Indica and late-season Indica) are relatively
more complex. This is mainly due to differences in the mathematical approaches taken by the parties
and differences in the data submitted by the parties responding to the mentioned mathematical
differences.
7.368. There are three discrete issues in this regard: (i) the different ratios used by the United
States (31.6%) and China (33.3%) to determine the proportion of Japonica rice that makes up the
national production of rice in China; (ii) differences between the data submitted by the parties, or
lack thereof, regarding the provincial breakdown of Japonica and Indica rice in the covered provinces
in order to determine the QEP; and (iii) China's use of a weighted average to determine the AAP for
Indica rice that was used in the calculation of the MPS Formula.
7.369. We explore each of these issues below.
7.4.7.2.1 Total value of production of rice
7.370. China's Statistical Yearbook annually provides information on total "rice" production by
province595, and as noted by both parties, China's Rural Statistical Yearbooks 596 do not distinguish
between Indica and Japonica rice.597 Though both parties agree on the total volume of national rice
production, they have differing views on the proportions of national rice production which constitute
Japonica and Indica rice.
7.371. The United States argues that Japonica rice makes up 31.6% of China's rice production and
that the total volume of production of Japonica is thus determined by multiplying the total national
rice production by 0.316.598 China argues that "[r] eflecting the reality of Chinese agricultural
production, japonica rice makes up one third of China's total rice production. "599 China notes that
this proportion has been used in a number of its notifications.600
7.372. We have carefully reviewed the evidence presented by the parties to support their respective
assertions. Regarding the United States' position, we note that the process by which the United
States arrives at 31.6% is not itself entirely clear as we could not identify the precise origin of the
data within the exhibits referenced by the United States. Upon examination of the portion of China's
Statistical Yearbook (2016) submitted by the United States601, we note that it contains multiple years
detailing several stages of the production of rice as well as a breakdown of production of these
products per province, without indicating the year (or years) to which the breakdown refers to.
Without a reference to those years for each province, it is unclear as to whether the 31.6% ratio is
meant to apply uniformly to the years 2012 -2015. We were thus unable to replicate precisely the
results obtained by the United States. Regarding China's arguments, we observe that the 1:2 ratio
is supported by notifications that China has made to the WTO Committee on Agriculture . These,
however, do not explain the calculation process used to arrive at this figure or provide any statistical
data on the production of Japonica vs. Indica rice in China.

595 China's Statistical Yearbook, Table 12-10, (2016), (Exhibit USA-18); China's Statistical Yearbook,
Table 12-10, (2015), (Exhibit USA-73); China's Statistical Yearbook, Table 12-10 (2014), (Exhibit USA-74);
China's Statistical Yearbook, Table 13-15 (2013), (Exhibit USA-75).
596 China's Rural Statistical Yearbook (2013), (Exhibit CHN-49); China's Rural Statistical Yearbook
(2015), (Exhibit CHN-50); China's Rural Statistical Yearbook (2016), (Exhibit USA-76/CHN-33).
597 United States' first written submission, para. 120; China's response to Panel question No. 97,
para. 305; China's comments on the United States' response to Panel question No. 97, para 239.
598 United States' first written submission, fn. 244.
599 China's first written submission, para. 257.
600 See China's Notification (2002-2004), G/AG/N/CHN/17 (24 March 2010), (Exhibit USA-2); China's
Notification (2005-2008), G/AG/N/CHN/21 (13 October 2011); and China's Notification (2009-2010),
G/AG/N/CHN/28 (6 May 2015).
601 China's Statistical Yearbook, Table 12-10, (2016), (Exhibit USA-18).

7.373. We note that b oth parties agree on the fact that Japonica rice production is (roughly) one
third of national rice production.602 Additionally, the difference in the overall results obtained using
each of the two approaches is minimal, as will be discussed below.
7.4.7.2.2 Volume of production of rice per province
7.374. According to the United States, additional information regarding crop production by season
is available in China 's Rural Statistical Yearbook and Agricultural Statistical Reports regarding
production volume by provin ce for early season rice, mid -to-late or single season rice, and late
season rice.603 In this regard, the United States argues that nearly all early season and late season
rice is Indica rice, while middle season single crop rice is Japonica rice.604
7.375. In order to determine the production of early-season Indica rice, mid-late-season Indica
rice and Japonica rice on a provincial basis, the United States attempts to identify those provinces
that primarily or only grow Japonica or Indica rice . Accordingly, the United States submits that
almost all of the rice reported as early -season rice is Indica rice. 605 The United States goes on to
state that in the more temperat e northeast provinces of Liaoning, Jilin, and Heilongjiang, farmers
grow primar ily Japonica rice, and the measures for Japonica rice operate only in those three
provinces.606 The southern provinces of Jiangxi, Henan, Hubei, Hunan, Guangxi Zhuang and Sichuan
primarily grow Indica rice 607, and Jiangsu and Anhui provinces grow both Indica rice and Japonica
rice.608 For the provinces which grow both mid-late-season Indica rice and Japonica rice609, the total
rice volume has been subdivided by the United States to reflect the portion of production estimated
to be attributed to each species.610
7.376. China disagrees with the data provided by the U nited States concerning the division of
Indica and Japonica rice production in the MPP provinces, as "the United States' division is not based
on any official source".611 As a result, China characterises the production data provided by the United
States for the different types of rice per province as being a rough estimation by the United States,
based on elements from three reports, dated 2001612, 2006613 and 2011614, respectively. In addition,
China argues that the United States does not appear to have applied the percentage that it had itself

602 See United States' first written submission, fn. 244.
603 United States' first written submission, para. 120.
604 United States' first written submission, fn. 234.
605 China's Rural Statistical Yearbook (2016), Table 7-18, (Exhibit USA-76/CHN-33); China Agricultural
Statistical Reports (2011-2014), (Exhibit USA-77) pp. 5, 11, 19.
606 United States' first written submission, para. 121; China's Rural Statistical Yearbook (2016), Table 7-
17, and 7-18, (Liaoning, Jilin, and Heilongjiang reporting no early (Indica) rice production, and only a single
season of mid-late-season rice), (Exhibit USA-76/CHN-33); see also Funing, et al., Alternative Approach to
Measure Comparative Advantage in China's Grain Sector (2001), p. 7, (Exhibit USA-35) and Chen, Current
Situation and Trends in Production of Japonica Rice in China (2006), p. 2 (2006) (discussing three northeast
provinces and Jiangsu), (Exhibit USA-36).
607 United States' first written submission, para. 121; China's Rural Statistical Yearbook (2016), Table 7-
17, and 7-18 (2016), (Exhibit USA-76/CHN-33); Chen, Current Situation and Trends in Production of Japonica
Rice in China (2006), p. 4 (2006) (noting the difficulty of the southern provinces switching to Japonica rice)
(Exhibit USA-36); see also Hansen, et al., China's Japonica Rice Market, 32 (2002) (Exhibit USA-34).
608 United States' first written submission, para. 121.
609 According to the United States, Anhui and Jiangsu both grow both Japonica and mid-late-season
Indica rice, however in different proportions. Jiangsu is a major producer of Japonica and 86 percent of its
production is estimated to be Japonica. Anhui is a lesser producer of Japonica and 19 percent of its production
is estimated to be Japonica. United States' first written submission, fn. 231; See Yuzhu, Basic Knowledge about
Japonica Rice (2011), p. 7 (Exhibit USA-78), compare with China Agricultural Statistical Reports (2011-2014),
(Exhibit USA-77).
610 United States' first written submission, para. 121; Yuzhu, Basic Knowledge about Japonica Rice
(2011), p. 7, (Exhibit USA-78). Compare with China Agricultural Statistical Reports (2011-2014), (Exhibit USA-
77).
611 China's response to Panel question No. 96, para. 305; China's comments on the United States'
response to Panel question No. 97, paras. 239-240.
612 Funing, et al., Alternative Approach to Measure Comparative Advantage in China's Grain Sector
(2001), p. 7 (Exhibit USA-35)
613 Chen, Current Situation and Trends in Production of Japonica Rice in China (2006), p. 2 (2006)
(Exhibit USA-36)
614 Yuzhu, Basic Knowledge about Japonica Rice (2011), p. 7 (Exhibit USA-78)

identified from the three reports615, for the data it submitted to the Panel.616 China thus states that
it is not in a position to confirm the accuracy of these data, let alone to agree with them.
7.377. We agree with China that China's Statistical Yearbooks do not distinguish between Indica
and Japonica rice when reporting production values. We also ag ree with China that the evidence
provided by the United States does not refer to the years at issue in this dispute, i.e. 2012 -2015,
and that it is not sourced from official reports. In this connection, we have not been able to determine
how the United States has arrived at its proportions of Japonica rice in various provinces from the
evidence provided – the relevant information to do this does not seem to be present in the exhibits
provided by the United States. We note, however, that China did not submit any evidence to support
its contention of the inaccuracy of the United States' calculation, nor did it provide any alternative
proportions to be used by the Panel. The evidence on the record does not contain any other source
with more recent or official data on the breakdown of the two types of rice by province.
7.378. Given the above, particularly the differences between the parties' approaches when
determining the total proportion of Japonica rice produced in China, the Panel will conduct two sets
of calculations: one set will broadly follow the United States' approach, using the data provided by
the United States , where available, for the volumes of rice used to determine the total value of
production and the QEP, and the other set of calculations will broadl y follow China's approach and
will use the data provided by China, where available, for the volumes of rice used to determine the
total value of production and the QEP.
7.4.7.2.3 Weighted average AAP
7.379. The third and final issue relates to the use of a weighted average to calculate one single AAP
value for Indica rice when running the MPS Formula.
7.380. China argues that , given there are separate AAPs for early -season and mid -late-season
Indica rice, a weighted average AAP should be determined for Indica rice as a whole.617 The weight
China assigns to each type of rice for each year is the actual purchased amount in the respective
year.618
7.381. We agree with China that its measures provide for two separate AAP values: one for early -
season and the other for mid -late-season Indica rice. However, we are not persuaded tha t a
weighted average is the best approach. This is so because China bases its weighting of the AAP on
the amount of rice purchased, and not the QEP as defined by the Panel.619 In our view, a simple
average of the two AAPs is suitable to determine an AAP for Indica rice as a whole. Thus, the Panel
will not use China's weighted average approach for the AAPs for Indica rice. It will instead use a
simple average where necessary.

615 Hansen, et al., China's Japonica Rice Market, p. 38 (2002), (Exhibit USA-34); Chen, Current
Situation and Trends in Production of Japonica Rice in China (2006), p. 7 (2006), (Exhibit USA-36), Yuzhu,
Basic Knowledge about Japonica Rice (2011), p. 7, (Exhibit USA-78).
616 China's comments on the United States' response to Panel question No. 97, para. 240.
617 China's first written submission, para. 237, Table 10.
618 China's first written submission, para. 237.
619 In any event, if the Panel were to consider that China had meant for the weight to derive from a
variable QEP (however defined), rather than a static "amount purchased", the Panel notes that the results
would be mathematically equivalent in this case, if the other data inputs remained constant. See the formula
below:

Summed MPS for early- and mid-late-season Indica rice:
𝑀𝑃𝑆𝑖𝑛𝑑 = 𝑀𝑃𝑆𝑒 + 𝑀𝑃𝑆𝑚𝑙 = (𝐴𝐴𝑃𝑒 − 𝐹𝐸𝑅𝑃𝑖𝑛𝑑) ∗ 𝑄𝐸𝑃𝑒 + (𝐴𝐴𝑃𝑚𝑙 − 𝐹𝐸𝑅𝑃𝑖𝑛𝑑) ∗ 𝑄𝐸𝑃𝑚𝑙
China uses the following weighted average AAP in its calculation of MPS for Indica rice:
𝑀𝑃𝑆𝑖𝑛𝑑 = (𝐴𝐴𝑃𝑒 ∗ 𝑄𝐸𝑃𝑒 + 𝐴𝐴𝑃𝑚𝑙 ∗ 𝑄𝐸𝑃𝑚𝑙
𝑄𝐸𝑃𝑒 + 𝑄𝐸𝑃𝑚𝑙 − 𝐹𝐸𝑅𝑃𝑖𝑛𝑑) ∗ (𝑄𝐸𝑃𝑒 + 𝑄𝐸𝑃𝑚𝑙)
Both methodologies used in this case are mathematically equivalent.
𝑀𝑃𝑆𝑖𝑛𝑑 = 𝑀𝑃𝑆𝑒 + 𝑀𝑃𝑆𝑚𝑙 = (𝐴𝐴𝑃𝑒 − 𝐹𝐸𝑅𝑃𝑖𝑛𝑑) ∗ 𝑄𝐸𝑃𝑒 + (𝐴𝐴𝑃𝑚𝑙 − 𝐹𝐸𝑅𝑃𝑖𝑛𝑑) ∗ 𝑄𝐸𝑃𝑚𝑙
= 𝐴𝐴𝑃𝑒 ∗ 𝑄𝐸𝑃𝑒 + 𝐴𝐴𝑃𝑚𝑙 ∗ 𝑄𝐸𝑃𝑚𝑙 − 𝐹𝐸𝑅𝑃𝑖𝑛𝑑 ∗ (𝑄𝐸𝑃𝑒 + 𝑄𝐸𝑃𝑚𝑙)
= (𝑨𝑨𝑷𝒆 ∗ 𝑸𝑬𝑷𝒆 + 𝑨𝑨𝑷𝒎𝒍 ∗ 𝑸𝑬𝑷𝒎𝒍
𝑸𝑬𝑷𝒆 + 𝑸𝑬𝑷𝒎𝒍 − 𝑭𝑬𝑹𝑷𝒊𝒏𝒅) ∗ (𝑸𝑬𝑷𝒆 + 𝑸𝑬𝑷𝒎𝒍)

7.4.7.2.4 Conclusion on these issues
7.382. For the reasons outlined above, we will conduct two sets of calculations:
a. In the first set of calculations, we broadly follow the United States' approach. This involves
using the United States' national breakdown of Japonica and Indica rice (at a 31.6% ratio),
as well as the United States' breakdown in the covered provinces. For the calculation of
MPS for Indica rice, specifically, we will calculate two different MPS values, one for early-
season and the other for mid - late-season, using the two separate AAPs in China's
measures. Finally, we will add them up to arrive at an MPS for Indica rice as a whole. This
MPS value is then divided by the total value of production of all Indica rice in China (a sum
of early- and mid-late-season based on the United States' 31.6% ratio).
b. In the second set of calculations, we broadly follow China's approach. This involves using
China's national breakdown of Japonica and Indica rice ( at a 33.3% ratio), as well as a
proxy breakdown of rice production in the covered provinces. For the calculation of MPS
for Indica rice, specifically, we will calculate one MPS value for Indica rice, using a simple
average of the early - and mid-late-season AAPs. This MPS value is then divided by the
total value of production of all Indica rice in China (based on China's 33.3% ratio).
7.383. As will be seen below, in either set of calculations , the result is above China's 8.5% de
minimis level for both Indica and Japonica rice , and the average difference between the United
States' and China's alternatives is approximately 0.27 percentage points for Indica and 0.25
percentage points for Japonica. In our view, this difference is negligible and does not affect our final
conclusion regarding China's compliance with its domestic support commitments.
7.4.7.2.5 Japonica rice
7.4.7.2.5.1 Japonica rice (United States' approach)
7.384. Table 10 sets out all the variables required to carry out the MPS formula and derive a
percentage to compare against China's 8.5% de minimis level, namely the AAP, the FERP, the QEP
and the total value of production. First, it sets out the total national production of Japonica rice (the
total national production of all rice in China multiplied by 0.316, which the United States argues is
necessary to arrive at the correct proportion of Japonica). It goes on to multiply this total national
production of Japonica rice by the producer price for each year, to calculate the total value of
production of Japonica rice.
7.385. The table then determines the QEP. This is done by (i) setting out the volume of production
of Japonica rice in each of the covered provinces, as provided exclusively by the United States, and
then (ii) subtracting the out-of-grade production from each of these provinces. The QEP per
province is then totalled to determine the final QEP.
7.386. The AAP is the price set out in the relevant measures, multiplied by 20 to obtain a price
expressed in renminbi/ton.
7.387. The FERP is the average of three external reference prices for the years 1996-1998, as set
out in Appendix DS 5-4 of China's tables of supporting material. We adjust this FERP downwards to
the level of unmilled rice by multiplying it by 0.7, as discussed earlier.
7.388. To calculate an MPS value, the adjusted FERP is subtracted from the AAP. The resulting
price differential is multiplied by the QEP. The resulting monetary value is the MPS for a specific
year. Finally, this MPS is divided by the total value of production above to arrive at a percentage
which can be compared with China's 8.5% de minimis level.

Table 10: Calculation of MPS for Japonica rice from 2012-2015
(United States' breakdown)
Japonica rice MPS
Calculation (US) Units 2012 2013 2014 2015
Total national production620 million tons 64.539 64.341 65.256 65.760
Producer price621 ¥/ton 2,919.60 2,936.60 3,035.20 2,951.20
Total value of production million ¥ 188,426.83 188,944.93 198,065.65 194,070.65
Average 1996-1998 FERP
(f.o.b. prices - milled)622 ¥/ton 3290.63 3290.63 3290.63 3290.63
Volume of production by
covered province623
Liaoning million tons 5.078 5.069 4.515 4.677
Jilin million tons 5.320 5.633 5.876 6.301
Heilongjiang million tons 21.712 22.206 22.510 21.997
Jiangsu million tons 16.360 16.551 16.461 16.811
Anhui million tons 2.422 2.364 2.431 2.592
Total million tons 50.892 51.823 51.793 52.378
Out-of-grade percentage624
Liaoning percentage 0.0 0.0 0.0 0.0
Jilin percentage 0.0 0.0 0.0 0.0
Heilongjiang percentage 0.0 0.0 0.0 0.3
Jiangsu percentage 0.0 0.0 0.0 1.5
Anhui percentage 0.0 0.0 0.0 0.0
QEP per province
Liaoning million tons 5.078 5.069 4.515 4.677
Jilin million tons 5.320 5.633 5.876 6.301
Heilongjiang million tons 21.712 22.206 22.510 21.931
Jiangsu million tons 16.360 16.551 16.461 16.559
Anhui million tons 2.422 2.364 2.431 2.592
MPS Calculation
QEP million
tons 50.892 51.823 51.793 52.060
AAP (unmilled)625 ¥/ton 2,800.00 3,000.00 3,100.00 3,100.00
Average 1996-1998 FERP
(unmilled equivalent) ¥/ton 2303.44 2303.44 2303.44 2303.44
Japonica MPS
= (AAP-adjusted FERP)*QEP
million
RMB 25,270.76 36,097.66 41,256.06 41,468.62
MPS / Total value of
production percentage 13.41 19.10 20.83 21.37

620 United States' response to Panel question No. 73, Table 9 (first substantive meeting); China's
Statistical Yearbook, Table 12-10, (2016), (Exhibit USA-18); China's Statistical Yearbook, Table 12-10 (2015),
(Exhibit USA-73); China's Statistical Yearbook, Table 12-10 (2014), (Exhibit USA-74); China's Statistical
Yearbook, Table 13-15 (2013), (Exhibit USA-75).
621 China's first written submission, para. 258, Table 15; Agricultural Product Cost and Returns 2010-
2016, (Exhibit USA-81/CHN-67). United States' first written submission, para. 122; China's Farm Gate Prices
1995 to 2015 (Exhibit USA-79).
622 WT/ACC/CHN/38/Rev.3, Appendix DS 5-3, (Exhibit USA-43).
623 United States' response to Panel question No. 73, Table 8 (first substantive meeting); China's
Statistical Yearbook, Table 12-10, (2016), (Exhibit USA-18); China's Statistical Yearbook, Table 12-10 (2015),
(Exhibit USA-73); China's Statistical Yearbook, Table 12-10 (2014), (Exhibit USA-74); China's Statistical
Yearbook, Table 13-15 (2013), (Exhibit USA-75).
624 China's response to Panel question No. 93, Table 6; United States' response to Panel question No.
93, China's States Administration of Grain, Standard & Quality Centre, Quality Survey Reports 2010-2016
(Exhibit USA-98).
625 China's first written submission, Table 8; 2012 Rice Annual Notice, (Exhibit USA-39/CHN-23B); 2013
Rice Annual Notice, (Exhibit USA-40/CHN-24B); 2014 Rice Annual Notice, (Exhibit USA-41/CHN-25B); 2015
Rice Annual Notice, (Exhibit USA-42/CHN-26B); United States' first written submission, para. 112, Table 6.

7.4.7.2.5.2 Japonica rice (China's approach)
7.389. Table 11 sets out all the variables required to run the MPS formula and derive a percentage
to compare against China's 8.5% de minimis level, broadly using China's approach. First, it sets out
the total national production of Japonica rice (the total national production of all rice in China
multiplied by 0.333, which China argues is necessary to arrive at the correct proportion of Japonica).
It goes on to multiply this total national production of Japonica rice by the producer price for
each year, to calculate the total value of production of Japonica rice.
7.390. The table then determines the QEP. While China does provide the percentage of out-of-
grade production in each province, it did not provide data on production by province. Thus, in
the case of Japonica rice, the table first sets out the data on the total volume of production of
Japonica rice in all of the covered provinces , without any provincial breakdown . This value was
arrived at by multiplying the total volume of production of all rice in the covered provinces by 0.333.
The table then averages the per centages of out-of-grade production provided by China into a
single figure. Calculating the QEP involves (i) setting out the total volume of production of Japonica
rice in all of the covered provinces and then (ii) subtracting the out-of-grade production
(calculated using the average of the out-of-grade percentages) from this total. The result is the final
QEP.
7.391. The AAP is the price set out in the relevant measures, multiplied by 20 to obtain a price
expressed in renminbi/ton.
7.392. The FERP is an average of three external reference prices for the years 1996-1998, as set
out in Appendix DS 5-4 of China's tables of supporting material. We adjust this FERP downwards to
the level of unmilled rice by multiplying it by 0.7.
7.393. To calculate an MPS value, first the adjusted FERP is subtracted from the AAP. The resulting
price differential is multiplied by the QEP to arrive at an MPS for a specific year, expressed as a
monetary value. Finally, this MPS is divided by the total value of production above to arrive at a
percentage which can be compared with China's 8.5% de minimis level.

Table 11: Calculation of MPS for Japonica rice from 2012-2015 (China's breakdown)
Japonica rice MPS
Calculation (China) Units 2012 2013 2014 2015
Total national production626 million tons 68.011 67.803 68.767 69.339
Producer price627 ¥/ton 2,919.60 2,936.60 3,035.20 2,951.20
Total value of production million ¥ 198,563.71 199,109.69 208,721.09 204,633.04
Average 1996-1998 FERP
(f.o.b. prices - milled)628 ¥/ton 3290.63 3290.63 3290.63 3290.63
Volume of production629
Total in covered provinces million tons 53.059 53.309 53.966 54.659
Out-of-grade percentage630
Liaoning percentage 0.0 0.0 0.0 0.0
Jilin percentage 0.0 0.0 0.0 0.0
Heilongjiang percentage 0.0 0.0 0.0 0.3
Jiangsu percentage 0.0 0.0 0.0 1.5
Anhui percentage 0.0 0.0 0.0 0.0
Average percentage 0.0 0.0 0.0 0.4
MPS Calculation
QEP million tons 53.059 53.309 53.966 54.462
AAP (unmilled)631 ¥/ton 2,800.00 3,000.00 3,100.00 3,100.00
Average 1996-1998 FERP
(unmilled equivalent) ¥/ton 2303.44 2303.44 2303.44 2303.44
Japonica MPS
= (AAP-adjusted FERP)*QEP million RMB 26,347.09 37,132.90 42,987.41 43,382.13
MPS / Total value of
production percentage 13.27 18.65 20.60 21.20

626 Production amount of Japonica rice = national total * 33.3%; See China's first written submission,
Table 5; China's Rural Statistical Yearbook (2013), (Exhibit CHN-49), p. 152; China's Rural Statistical Yearbook
(2015), (Exhibit CHN-50), p. 164; China's Rural Statistical Yearbook (2016), (Exhibit USA-76/CHN-33), p. 168;
China's Rural Statistical Yearbook (2016), (Exhibit USA-76/CHN-33), p. 167.
627 China's first written submission, para. 258, Table 15; Agricultural Product Cost and Returns 2010-
2016, (Exhibit USA-81/CHN-67). United States' first written submission, para. 122; China's Farm Gate Prices
1995 to 2015 (Exhibit USA-79).
628 WT/ACC/CHN/38/Rev.3, Appendix DS 5-3, (Exhibit USA-43).
629 These figures were arrived at by taking the total production of rice in the provinces covered by the
measures and multiplying this by 0.333. China's Rural Statistical Yearbook (2013), (Exhibit CHN-49), p. 152;
China's Rural Statistical Yearbook (2015), (Exhibit CHN-50), p. 164; China's Rural Statistical Yearbook (2016),
(Exhibit USA-76/CHN-33), p. 168; China's Rural Statistical Yearbook (2016), (Exhibit USA-76/CHN-33), p. 167.
630 China's response to Panel question No. 93, Table 6; United States' response to Panel question No.
93, China's States Administration of Grain, Standard & Quality Centre, Quality Survey Reports 2010-2016
(Exhibit USA-98).
631 China's first written submission, Table 8; 2012 Rice Annual Notice, (Exhibit USA-39/CHN-23B); 2013
Rice Annual Notice, (Exhibit USA-40/CHN-24B); 2014 Rice Annual Notice, (Exhibit USA-41/CHN-25B); 2015
Rice Annual Notice, (Exhibit USA-42/CHN-26B); United States' first written submission, para. 112, Table 6.

7.4.7.2.6 Indica rice (United States' approach)
7.4.7.2.6.1 Early-season Indica rice
7.394. Table 12 sets out all the variables required to run the MPS formula for early-season Indica
rice following the United States' approach. First, it sets out the total national production of early-
season Indica rice, provided exclusively by the United States . It goes on to multiply this total
national production by the producer price for early-season Indica rice for each year, to calculate
the total value of production.
7.395. The table then determines the QEP. This is done by (i) setting out the volume of production
of early-season Indica in each of the covered provinces, as provided exclusively by the United States,
and then (ii) subtracting the out-of-grade production from each of these provinces. The QEP per
province is then totalled to determine the final QEP.
7.396. The AAP is the price set out in the relevant measures, multiplied by 20 to obtain a price
expressed in renminbi/ton.
7.397. The FERP is the average of three external reference prices for the years 1996 -1998 for
"Indica rice", as set out in Appendix DS 5-4 of China's tables of supporting material. We adjust this
FERP downwards to the level of unmilled rice by multiplying it by 0.7, as discussed above.
7.398. To calculate an MPS value, first the adjusted FERP is subtracted from the AAP. The resulting
price differential is multiplied by the QEP. The resulting monetary value is the MPS for a specific
year. Finally, this MPS is divided by the total value of production above to arrive at a percentage.
This percentage, in the case of early -season and mid -late-season Indica rice, is for descriptive
purposes only, as it is a total MPS percentage for Indica rice that we will compare against China's
8.5% de minimis value.

Table 12: Calculation of MPS for early-season Indica rice from 2012-2015
(United States' breakdown)
Early-Season Indica rice MPS
Calculation (US) Units 2012 2013 2014 2015
Total national production632 million tons 33.291 34.145 34.012 33.687
Early-season producer price633 ¥/ton 2,622.00 2,603.20 2,681.60 2,687.40
Total value of production million ¥ 87,289.00 88,886.26 91,206.58 90,530.44
Average 1996-1998 FERP (f.o.b.
prices - milled) ¥/ton 2343.00 2343.00 2343.00 2343.00
Volume of production by
covered province634
Anhui million tons 1.320 1.308 1.283 1.092
Jiangxi million tons 8.002 8.280 8.201 8.119
Hubei million tons 2.089 2.228 2.387 2.523
Hunan million tons 8.187 8.605 8.548 8.589
Guangxi Zhuang
Autonomous Region million tons 5.449 5.552 5.433 5.288
Total million tons 25.047 25.973 25.852 25.611
Out-of-grade percentage635
Anhui percentage 0.0 0.0 0.0 0.0
Jiangxi percentage 1.0 1.0 0.0 0.0
Hubei percentage 0.0 0.0 0.0 0.0
Hunan percentage 1.0 0.0 3.0 1.0
Guangxi Zhuang Autonomous
Region percentage 1.0 1.0 1.0 0.0
QEP per province
Anhui million tons 1.320 1.308 1.283 1.092
Jiangxi million tons 7.922 8.197 8.201 8.119
Hubei million tons 2.089 2.228 2.387 2.523
Hunan million tons 8.105 8.605 8.292 8.503
Guangxi Zhuang Autonomous
Region million tons 5.395 5.496 5.379 5.288
MPS Calculation
QEP million
tons 24.831 25.835 25.541 25.525
AAP (unmilled)636 ¥/ton 2,400.00 2,640.00 2,700.00 2,700.00
Average 1996-1998 FERP
(unmilled equivalent)637 ¥/ton 1640.10 1640.10 1640.10 1640.10
Early-season Indica MPS
= (AAP-adjusted FERP)*QEP
million
RMB 18,868.79 25,832.10 27,071.15 27,054.06

632 United States' response to Panel question No. 73, Table 9 (first substantive meeting); China's
Statistical Yearbook, Table 12-10, (2016), (Exhibit USA-18); China's Statistical Yearbook, Table 12-10 (2015),
(Exhibit USA-73); China's Statistical Yearbook, Table 12-10 (2014), (Exhibit USA-74); China's Statistical
Yearbook, Table 13-15 (2013), (Exhibit USA-75).
633 China's first written submission, para. 258, Table 15; Agricultural Product Cost and Returns 2010-
2016, (Exhibit USA-81/CHN-67). United States' first written submission, para. 122; China's Farm Gate Prices
1995 to 2015 (Exhibit USA-79).
634 United States' response to Panel question No. 73, Table 8 (first substantive meeting); China's Rural
Statistical Yearbook (2016), Table 7-18, (Exhibit USA-76/CHN-33); China Agricultural Statistical Reports
(2011-2014), (Exhibit USA-77), pp. 5, 11, 19.
635 China's response to Panel question No. 93, Table 6; United States' response to Panel question No.
93, China's States Administration of Grain, Standard & Quality Centre, Quality Survey Reports 2010-2016
(Exhibit USA-98).
636 China's first written submission, Table 8; 2012 Rice Annual Notice, (Exhibit USA-39/CHN-23B); 2013
Rice Annual Notice, (Exhibit USA-40/CHN-24B); 2014 Rice Annual Notice, (Exhibit USA-41/CHN-25B); 2015
Rice Annual Notice, (Exhibit USA-42/CHN-26B).
637 WT/ACC/CHN/38/Rev.3, Appendix DS 5-3, (Exhibit USA-43).

Early-Season Indica rice MPS
Calculation (US) Units 2012 2013 2014 2015
MPS / National value of
production of Indica percentage 21.62 29.06 29.68 29.88

7.4.7.2.6.2 Mid-Late-Season Indica rice
7.399. Table 13 sets out all the variables required to run the MPS formula for mid-late-season Indica
rice following the United States' approach. First, it sets out the total national production of mid-late-
season Indica rice, which the United States asserts is calculated by subtracting the volume of early-
season Indica and Japonica rice from the total volume of Chinese rice production. The table goes on
to multiply this total national production by the producer price for an average of the mid - &
late-season producer price for each year, to calculate the total value of production.
7.400. The table then determines the QEP. This is done by (i) setting out the volume of production
of mid-late-season Indica rice in each of the covered provinces, as provided exclusively by the United
States, and then (ii) subtracting the out-of-grade production from each of these provinces. The
QEP per province is then totalled to determine the final QEP.
7.401. The AAP is the price set out in the relevant measures, multiplied by 20 to obtain a price
expressed in renminbi/ton.
7.402. The FERP is the average of three external reference prices for the years 1996 -1998 for
"Indica rice", as set out in Appendix DS 5-4 of China's tables of supporting material. We adjust this
FERP downwards to the level of unmilled rice by multiplying it by 0.7, as discussed above.
7.403. To calculate an MPS value, first the adjusted FERP is subtracted from the AAP. The resulting
price differential is multiplied by the QEP. The resulting monetary value is the MPS for a specific
year. Finally, this MPS is divided by the total value of production above to arrive at a percentage.
This percentage, in the case of early -season and mid -late-season Indica rice, is for descriptive
purposes only, as it is a total MPS percentage for Indica rice which is to be compared against China's
8.5% de minimis value.
Table 13: Calculation of MPS for mid-late-season Indica rice from 2012-2015
(United States' breakdown)
Mid-late-season Indica rice
MPS Calculation (US) Units 2012 2013 2014 2015
Total national production638 million tons 106.406 105.136 107.239 108.739
Average of Mid- & Late-season
producer price639 ¥/ton 2,733.40 2,670.30 2,748.10 2,694.30
Total value of production million ¥ 290,851.32 280,743.61 294,702.91 292,975.22
Average 1996-1998 FERP
(f.o.b. prices - milled) ¥/ton 2343.00 2343.00 2343.00 2343.00
Volume of production by
covered province640
Jiangsu million tons 2.641 2.672 2.658 2.714

638 United States' response to Panel question No. 73, Table 9 (first substantive meeting); China's
Statistical Yearbook, Table 12-10, (2016), (Exhibit USA-18); China's Statistical Yearbook, Table 12-10 (2015),
(Exhibit USA-73); China's Statistical Yearbook, Table 12-10 (2014), (Exhibit USA-74); China's Statistical
Yearbook, Table 13-15 (2013), (Exhibit USA-75).
639 China's first written submission, para. 258, Table 15; Agricultural Product Cost and Returns 2010-
2016, (Exhibit USA-81/CHN-67). United States' first written submission, para. 122; China's Farm Gate Prices
1995 to 2015 (Exhibit USA-79). It is prudent to use an average of the producer prices for mid- and late-season
Indica rice. As an incorrect average of the producer price for mid-late-season rice was submitted by the United
States, the calculation for this type of rice is performed using the correctly averaged producer price for mid-
late-season Indica rice.
640 United States' response to Panel question No. 73, Table 8 (first substantive meeting); China's Rural
Statistical Yearbook (2016), Table 7-18, (Exhibit USA-76/CHN-33); China Agricultural Statistical Reports
(2011-2014), (Exhibit USA-77), pp. 5, 11, 19.

Mid-late-season Indica rice
MPS Calculation (US) Units 2012 2013 2014 2015
Anhui million tons 10.193 9.951 10.232 10.910
Jiangxi million tons 11.758 11.760 12.051 12.153
Henan million tons 4.926 4.858 5.286 5.315
Hubei million tons 14.425 14.539 14.908 15.584
Hunan million tons 18.130 17.011 17.792 17.859
Guangxi Zhuang
Autonomous Region million tons 5.971 6.010 6.228 6.090
Sichuan million tons 15.354 15.490 15.261 15.526
Total million
tons 83.398 82.291 84.416 86.151
Out-of-grade percentage641
Jiangsu percentage 0.0 0.0 0.0 0.0
Anhui percentage 1.0 1.0 0.8 0.0
Jiangxi percentage 1.0 0.0 0.0 0.0
Henan percentage 0.0 3.0 2.2 1.1
Hubei percentage 0.0 4.0 0.7 0.0
Hunan percentage 0.0 1.0 0.0 1.7
Guangxi Zhuang
Autonomous Region percentage 1.0 1.0 0.0 0.0
Sichuan percentage 0.0 0.0 1.3 1.0
QEP per province
Jiangsu million tons 2.641 2.672 2.658 2.714
Anhui million tons 10.091 9.851 10.150 10.910
Jiangxi million tons 11.640 11.760 12.051 12.153
Henan million tons 4.926 4.712 5.170 5.257
Hubei million tons 14.425 13.957 14.804 15.584
Hunan million tons 18.130 16.841 17.792 17.555
Guangxi Zhuang
Autonomous Region million tons 5.911 5.950 6.228 6.090
Sichuan million tons 15.354 15.490 15.063 15.371
MPS Calculation
QEP million
tons 83.119 81.234 83.915 85.634
AAP (unmilled)642 ¥/ton 2,500.00 2,700.00 2,760.00 2,760.00
Average 1996-1998 FERP
(unmilled equivalent) ¥/ton 1640.10 1640.10 1640.10 1640.10
Mid-late-season Indica MPS
= (AAP-adjusted FERP)*QEP
million
RMB 71,473.84 86,099.90 93,976.52 95,901.15
MPS / Value of Production percentage 24.57 30.67 31.89 32.73

7.4.7.2.6.3 Total Indica rice MPS calculation
7.404. Table 14 sets out the total value of production of all Indica rice calculated by summing
the value of production of early - and mid-late-season Indica rice, provided in Tables 12 and 13
above.

641 China's response to Panel question No. 93, Table 6; United States' response to Panel question No.
93, China's States Administration of Grain, Standard & Quality Centre, Quality Survey Reports 2010-2016
(Exhibit USA-98).
642 China's first written submission, Table 8; 2012 Rice Annual Notice, (Exhibit USA-39/CHN-23B); 2013
Rice Annual Notice, (Exhibit USA-40/CHN-24B); 2014 Rice Annual Notice, (Exhibit USA-41/CHN-25B); 2015
Rice Annual Notice, (Exhibit USA-42/CHN-26B).

Table 14: Total value of production for Indica rice from 2012-2015
(United States' breakdown)
7.405. Table 15 sets out the total MPS for Indica rice, which is the sum of the MPS for early- and
mid-late-season Indica rice, set out in Tables 12 and 13 above. This total MPS is divided by the total
value of production of Indica rice (calculated in Table 14) to arrive at a percentage which can be
compared with China's 8.5% de minimis level.
Table 15: Calculation of total MPS for Indica rice from 2012-2015
(United States' breakdown)
Total Indica rice MPS
calculation Units 2012 2013 2014 2015
Total MPS for Indica rice
= early-season MPS +
mid-late-season MPS)
million RMB 90,342.63 111,931.99 121,047.67 122,955.21
MPS / Total value of
production Indica rice percentage 23.89 30.28 31.37 32.06

7.4.7.2.7 Indica rice (China's approach)
7.406. Table 16 sets out all the variables required to run the MPS formula for Indica rice broadly
following China's approach. First, it sets out the total national production of Indica rice, which
China asserts is the amount of rice which is not Japonica rice (i.e. 66.7% of total national
production).
7.407. The table goes on to multiply this total national production by the producer price
calculated as an average of the early-, mid- & late-season producer price s for each year, to
calculate the total value of production.
7.408. The table then determines the QEP. While China does provide the percentage of out-of-
grade production in each province, it did not provide data on production by province. Thus, in
the case of Indica rice, the table first sets out the data on the volume of production of Indica rice
in all of the covered provinces. This is the total volume of prod uction of all rice in the covered
provinces, multiplied by 0. 667. The table then averages the percentages of out-of-grade
production provided by China into a single figure. Calculating the QEP involves (i) setting out the
total volume of production of Indica rice in all of the covered provinces and then (ii) subtracting
the out-of-grade production (calculated using the average out-of-grade percentage) from this
total.
7.409. The AAP is an average of the early and mid -late prices set out in the relevant measures,
multiplied by 20 to obtain a price expressed in renminbi/ton.
7.410. The FERP is the average of three external reference prices for the years 1996 -1998 for
Indica rice, as set out in Appendi x DS 5-4 of China's tables of supporting material. We adjust this
FERP downwards to the level of unmilled rice by multiplying it by 0.7, as discussed above.
7.411. To calculate an MPS value, first the adjusted FERP is subtracted from the AAP. The resulting
price differential is multiplied by the QEP. The resulting monetary value i s the MPS for a specific
year. Finally, this MPS is divided by the total value of production above to arrive at a percentage
which can be compared with China's 8.5% de minimis level

 Units 2012 2013 2014 2015
Total value of
production (all
Indica rice)
million
RMB 378,140.32 369,629.88 385,909.49 383,505.66

Table 16: Calculation of MPS for Indica rice from 2012-2015 (China's breakdown)
Indica rice MPS Calculation
(China) Units 2012 2013 2014 2015
Total national production643 million tons 136.225 135.809 137.740 138.886
Average of early-, mid- and
late-season producer price ¥/ton 2,696.27 2,647.93 2,725.93 2,692.00
Total value of production million ¥ 367,300.04 359,613.72 375,470.52 373,881.31
Average 1996-1998 FERP (f.o.b.
prices - milled) ¥/ton 2343.00 2343.00 2343.00 2343.00
Volume of production644
Total in covered provinces million tons 106.278 106.778 108.095 109.481
Out-of-grade percentage645
Anhui percentage 0.5 0.5 0.4 0.0
Jiangxi percentage 1.0 0.5 0.0 0.0
Hubei percentage 0.0 2.0 0.4 0.0
Hunan percentage 0.5 0.5 1.5 1.4
Guangxi Zhuang Autonomous
Region percentage 1.0 1.0 0.5 0.0
Jiangsu percentage 0.0 0.0 0.0 0.0
Henan percentage 0.0 3.0 2.2 1.1
Sichuan percentage 0.0 0.0 1.3 1.0
Average percentage 0.4 0.9 0.8 0.4
MPS Calculation
QEP million tons 105.879 105.777 107.250 109.009
AAP average of Early & Mid-
Late (unmilled)646 ¥/ton 2,450.00 2,670.00 2,730.00 2,730.00
Average 1996-1998 FERP
(unmilled equivalent) ¥/ton 1640.10 1640.10 1640.10 1640.10
Indica MPS
= (AAP-adjusted FERP)*QEP
million
RMB 85,751.59 108,939.72 116,891.99 118,809.17
MPS / Total value of
production percentage 23.35 30.29 31.13 31.78

7.4.8 Conclusion on the calculation of China's Current Total AMS
7.412. From the above calculations, we observe that China's product-specific AMS, as provided
through market price support, for each of wheat, Indica rice and Japonica rice in the years 2012 ,

643 Production amount of Indica rice = national total * (1-33.3%); See China's first written submission,
Table 5; China's Rural Statistical Yearbook (2013), (Exhibit CHN-49), p. 152; China's Rural Statistical Yearbook
(2015), (Exhibit CHN-50), p. 164; China's Rural Statistical Yearbook (2016), (Exhibit USA-76/CHN-33), p. 168;
China's Rural Statistical Yearbook (2016), (Exhibit USA-76/CHN-33), p. 167.
644 These figures were arrived at by taking the total production of rice in the provinces covered by the
measures and multiplying this by 0.667. No provincial breakdown is given due to insufficient data on the
record. China's Rural Statistical Yearbook (2013), (Exhibit CHN-49), p. 152; China's Rural Statistical Yearbook
(2015), (Exhibit CHN-50), p. 164; China's Rural Statistical Yearbook (2016), (Exhibit USA-76/CHN-33), p. 168;
China's Rural Statistical Yearbook (2016), (Exhibit USA-76/CHN-33), p. 167.
645 China's response to Panel question No. 93, Table 6; United States' response to Panel question No.
93, China's States Administration of Grain, Standard & Quality Centre, Quality Survey Reports 2010-2016
(Exhibit USA-98).
646 China's first written submission, Table 8; 2012 Rice Annual Notice, (Exhibit USA-39/CHN-23B); 2013
Rice Annual Notice, (Exhibit USA-40/CHN-24B); 2014 Rice Annual Notice, (Exhibit USA-41/CHN-25B); 2015
Rice Annual Notice, (Exhibit USA-42/CHN-26B).

2013, 2014 and 2015, is above China's 8.5% de minimis threshold. For rice, this is so regardless of
which of the variations in the calculations is employed to produce the AMS values, as discussed
above. Therefore, an above-nil AMS value is to be included in China's Current Total AMS figures.
7.413. We thus find that China's level of support in favour of domestic producers is in excess o f
China's commitment level of "nil", set forth in Section I of Part IV of China's Schedule of Concessions
on Goods (CLII) . Therefore, China is not in compliance with its domestic support commitments
pursuant to Articles 3.2 and 6.3 of the Agreement on Agriculture.
7.5 Claim under Article 7.2(b) of the Agreement on Agriculture
7.414. The Panel recalls that the United States made an alternative claim, to the extent that China's
commitment level of "nil" were understood as not setting out any commitment, requesting the Panel
to find that the challenged measures are inconsistent with China's obligation under Article 7.2(b) of
the Agreement on Agriculture.647 Given our findings under Articles 3.2 and 6.3 of the Agreement on
Agriculture, we do not find it necessary to conduct an assessment of the United Stat es' alternative
claim.
8 CONCLUSIONS AND RECOMMENDATIONS
8.1. The Panel concludes that in the years 2012, 2013, 2014 and 2015, China provided domestic
support, expressed in terms of its Current Total AMS, in the form of market price support to
producers of wheat, Indica rice and Japonica rice in excess of its commitment level of "nil", set forth
in Section I of Part IV of China's Sc hedule of Concessions on Goods CLII . As such, China acted
inconsistently with its obligations under Articles 3.2 and 6.3 of the Agreement on Agriculture.
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. The Panel concludes that, to the extent that the measures at issue are
inconsistent with certain provisions of the Agreement on Agriculture, they have nullified or impaired
benefits accruing to the United States under that agreement.
8.3. Pursuant to Article 19.1 of the DSU, the P anel recommends that China bring its inconsistent
measures into conformity with its obligations under the Agreement on Agriculture.