CHINA – DOMESTIC SUPPORT FOR AGRICULTURAL PRODUCERS RECOURSE TO ARTICLE 21.5 OF THE DSU BY CHINA REQUEST FOR THE ESTABLISHMENT OF A PANEL
Document: REQUEST FOR THE ESTABLISHMENT OF A PANEL
Date: 7 August 2020
Document codes: WT/DS511/19
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
RECOURSE TO ARTICLE 21.5 OF THE DSU BY CHINA
REQUEST FOR THE ESTABLISHMENT OF A PANEL
The following communication, dated 5 August 2020, from the delegation of China to the Chairperson
of the Dispute Settlement Body, is circulated pursuant to Article 21.5 of the DSU.

Article 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Disputes
("DSU") and Article 19 of the Agreement on Agriculture, with standard terms of reference, as set
out in Article 7 of the DSU. China's request for the establishment of a panel relates to the
"disagreement", within the meaning of Article 21.5 of the DSU, "as to the existence or consistency
with a covered agreement of measures taken to comply with the recommendations and rulings " of
the Dispute Settlement Body ( "DSB") in China — Domestic Support for Agricultural Producers
(DS511), as identified in Section II, below. Pursuant to Article 21.5 of the DSU, China requests that
the DSB refer the matter to the original panel wherever possible.

I. Background

2. On 26 April 2019, the DSB adopted the report of the panel in China — Domestic Support for
Agricultural Producers (DS511). The report found that, in the years 2012, 2013, 20 14 and 2015,
China had provided domestic support in the form of market price support to producers of wheat,
Indica rice and Japonica rice that, expressed in terms of its Current Total AMS, exceeded China 's
commitment level of "nil", set forth in Section I of Part IV of China 's Schedule of Concessions on
Goods CLII. The report concluded that China had acted inconsistently with its obligations under
Articles 3.2 and 6.3 of the Agreement on Agriculture . In accordance with the report, the DSB
recommended that China bring its measures into conformity with its obligations under the
Agreement on Agriculture.1

II. The matter at issue: China's measures taken to comply have achieved compliance

3. On 18 June 2020, 2 China notified the DSB that it had implemented the recommendations
and rulings of the DSB by adopting the following measures taken to comply:

a. For wheat, China promulgated, on 12 October 2019, the Notice on Announcing the
Minimum Procurement Price for Wheat for 2020 (Fa Gai Jia Ge [2019] No. 1617), and the
Notice on Improving the Wheat Minimum Procurement Price Policy (Guo Liang Liang
[2019] No.284).

1 Minutes of 26 April 2019 DSB Meeting, WT/DSB/M/428, para. 7.5; Panel Report, China – Domestic
Support for Agricultural Producers, WT/DS511/R, paras. 8.1-8.3.
2 Status Report Regarding Implementation of the DSB Recommendations and Rulings by China,
Addendum, WT/DS511/15/Add.2.

b. For rice, China promulgated, on 28 February 2020, the Notice on Announcing the Minimum
Procurement Price for Rice for 2020 (Fa Gai Jia Ge [2020] No.290) and the Notice on
Improving the Rice Minimum Procurement Price Policy (Guo Liang Liang [2020] No.41).

4. As set forth in these measures taken to comply, starting from 2020, maximum procurement
amounts for wheat and rice shall be fixed each year under the Minimum Procurement Price ("MPP")
policies for those products, and the amount of production that is eligible to receive the minimum
procurement price shall be limited to the maximum procurement amount.

5. The maximum procurement amounts and minimum procurement prices for wheat and rice,
fixed each year in advance of the respective planting seasons, are designed to work together to
ensure that China provides domestic support, in the form of market price support to producers of
wheat, Indica rice and Japonica rice, within the limit of applicable de minimis level (i.e., 8.5% of the
total value of production of a basic agriculture product during the relevant yea r), and that is,
therefore, consistent with China 's obligations under Articles 3.2 and 6.3 of the Agreement on
Agriculture.

6. Therefore, as of 31 March 2020, the date of expiry of the originally agreed reasonable period
of time ("RPT") for China to impleme nt, China had complied with the DSB 's recommendations and
rulings through the adoption of the measures identified in paragraph 3, above.

III. Procedural developments since China's adoption of measures taken to comply

7. China has engaged, and continues to engage, in good faith with the United States on its
implementation of the DSB's recommendations and rulings. To recall, the parties originally a greed
an RPT for China to implement those recommendations and rulings. That RPT was to end on
31 March 2020. Before the expiry of the originally agreed RPT, the United States asked China to
agree to extend the RPT to 30 June 2020, so as to "allow the United States additional time to
evaluate China's actions".3 China, in good faith, agreed to the request from the United States.4
Moreover, China has been frequently updating the DSB and the United States on the implementation
status of this dispute.5

8. Nonetheless, the United States filed a request, under Article 22.2 of the DSU, for
authorization from the DSB to suspend concessions or other obligations under the GATT 1994 or
other agreements listed in Annex 1A to the WTO Agreement, in the amount of US$ 1.3 billion
for 2020.6 The United States filed this request despite China 's good faith cooperation with the
United States, and despite China's adoption and notification of measures taken to fully comply with
the DSB's recommendations and rulings. While the United States acknowledges the existence of
those "actions" by China, in the form of the measures identified in paragraph 3, above, 7 the
United States filed its Article 22.2 request without formally addressing those actions, though its
request reveals the United States' disagreement with China that those actions achieve compliance.

9. China has objected to the level of suspension of concessions or other obligations, as
proposed by the United States, and the DSB referred the matter to arbitration under Article 22.6 of
DSU.8

10. It is significant that the United States has filed its Article 22.2 request absent a multilateral
finding that China 's measures taken to comply fail to achieve compliance. Under the DSU, the
United States was required to seek recourse to review of China 's measures taken to comply under
Article 21.5 of the DSU. 9 As the Appellate Body explained in US – Continued Suspension, "before
obtaining the DSB 's authorization to suspend concessions, a Member must initiate a dispute

3 Modification of the Agreement under Article 21.3(b) of the DSU, WT/DS511/16.
4 Modification of the Agreement under Article 21.3(b) of the DSU, WT/DS511/16.
5 Status Report Regarding Implementation of the DSB Recommendations and Rulings by China and
Addenda thereto, WT/DS511/15, WT/DS511/15/Add.1, WT/DS511/15/Add.2.
6 Recourse to Article 22.2 of the DSU by the United States, WT/DS511/17.
7 Modification of the Agreement under Article 21.3(b) of the DSU, WT/DS511/16.
8 Recourse to Article 22.6 of the DSU by China, WT/DS511/18.
9 Article 21.5 states, in relevant part, that "[w]here there is disagreement as to the existence or
consistency with a covered agreement of measures taken to comply with the recommendations and rulings
such dispute shall be decided through recourse to these dispute settlement procedures, including wherever
possible resort to the original panel" (emphasis added).

settlement process in which it challenges the consistency with the covered agreements of a measure
taken by another Member".10 Indeed, absent a multilateral finding that measures taken to comply
have failed to achieve compliance, there is no basis for an Article 22.6 arbitrator to determine a level
of nullification or impairment res ulting from such an alleged non -compliance. Moreover, the DSB
cannot grant authorization to suspend concessions in any amount where the responding Member
concerned has come into compliance.11

11. Nonetheless, in this dispute, the United States has failed to initiate compliance proceedings
under Article 21.5 of the DSU to seek multilateral review of what it explicitly acknowledged as
"actions" by China to comply. Moreover, the United States has not followed the established practice
of seeking to agree a sequencing arrangement with China that would set out the "logical way
forward"12 in light of the apparent US disagreement that China 's measures taken to comply have
achieved compliance.

12. In these cir cumstances, China, as the original respondent, is filing this request for the
establishment of a compliance panel under Article 21.5 of the DSU. 13 Irrespective of whether the
parties reach, in future, a sequencing arrangement for purposes of this dispute, China considers that
the arbitrator under Article 22.6 should suspend its work, pending resolution of the dispute under
Article 21.5 proceedings. Prompt findings under Article 21.5 will, therefore, assist the parties in
securing a positive solution to the dispute.14

DSB shall be equivalent to the level of the nullification or impairment").
12 Decision by the Arbitrator, EC – Bananas III (US) (Article 22.6 – EC), para. 4.9.
13 China continues to be open to hold consultation with the United States on the implementing measures
if requested by the United States.
14 DSU, Art. 3.7 ("The aim of the dispute settlement mechanism is to secure a positive solution to the
dispute").