Shortly after the collapse of the Doha Round in 2008, there was a marked increase in subsidies provided to farmers in developing countries, particularly in the form of price supports and input subsidies. DTB worked with clients to estimate the size of these subsidies and analyze compliance with the WTO commitments of these countries. In 2011, DTB released a report on subsidies in four countries: India, Brazil, Turkey, and Thailand. In 2014, that report was updated to include China. The primary crops covered were corn, wheat, and rice and DTB found that each country was in violation of its WTO commitments on domestic support due to these subsidies.
As a result of these studies, DTB worked with clients to change the narrative in Geneva on domestic support. This had long been seen as a developed country problem, since developing countries were presumed to be too poor to provide significant trade-distorting subsidies. DTB demonstrated that this was not the case, and that the primary sources of trade distorting subsidies were now advanced developing countries with large agriculture sectors.
WTO Litigation Strategy
But the question remained, what could be done about it? At the urging of DTB’s clients, the U.S. government relentlessly questioned these developing countries at the WTO, but with little apparent effect: price support levels grew practically uninterrupted for several years. DTB worked with its clients to develop a WTO litigation strategy that resulted in two cases being launched against China in 2016. The first case (DS511) targeted China’s market price supports for wheat, corn, and rice. The second (DS517) targeted China’s administration of its WTO tariff rate quotas, which were operated in a way that minimized imports of these commodities.
In 2019, the panels sided with the United States in both cases. As part of the U.S. China Phase One deal, China agreed not to appeal and implement these decisions. That process is ongoing.