WASHINGTON, D.C., U.S. — U.S. President Donald Trump announced the phase one trade deal between the United States and China will be signed at the White House on Jan. 15. Indications were the Chinese delegation will be led by Vice-Premier Liu He. The Chinese delegation was expected to return to Beijing on Jan. 16.

Farm and food organizations eagerly awaited the signing. U.S. trade officials have asserted that China will import at least $40-billion-worth of U.S. farm and food products in each of the next two years, up $16 billion each year over a baseline $24 billion in imports in 2017, the year before the trade war began. It was hoped there would be details on just how China will reach $40 billion in annual imports and how various food and farm products may be affected.

In response to press inquiries about the possibility of China raising its tariff rate quotas for grain as part of the phase one deal, Han Jun, China’s vice-minister of agriculture and rural affairs, said import quotas for wheat, corn and rice will not increase.

“These are global quotas,” he said. “We will not adjust them just for one country.”

The question of raising tariff rate quotas for wheat and other grain may not be an issue at any rate given that there was plenty of room within existing TRQs for China to sharply increase its wheat and other grain imports, including from the United States. 

China hasn’t imported anywhere near its wheat TRQ, 9.64 million tonnes annually, to which it agreed on joining the World Trade Organization (WTO) in 2001. China was forecast to import 3.2 million tonnes of wheat in 2019-20. In each year since China’s accession to the WTO, its wheat imports have fallen well short of the TRQ ranging from a low of 49,000 tonnes in 2007-08 to a high of 6,773,000 tonnes in 2013-14. Since its accession to the WTO, China’s imports of U.S. wheat reached a high of 3,965,000 tonnes in 2013-14.

Additionally, a TRQ is not a commitment to buy a certain amount of grain, it is a commitment to provide zero-tariff or specified very low-tariff access to imports up to the level of the TRQ. Grain imports above that level may face higher, even sharply higher, tariffs.

U.S. complaints about China’s grain imports haven’t been centered on raising the grain TRQs. Rather, they have been concerned with how the current TRQs are administered. In that connection, WTO panels in 2019 found in favor of the United States in two related disputes.

In April, a WTO panel agreed with the United States that China administers its grain TRQs in a manner inconsistent with its accession protocol through its eligibility criteria, allocation and reallocation procedures, public comment process and processing restrictions. Additionally, China was found to allocate a significant portion of each TRQ to a designated state-trading enterprise that is not subject to the same rules applying to non-state trading enterprises seeking to import grains under the TRQ.

The argument was that if China administered its grain TRQs in an open, fair and transparent manner, it would have imported much more grain in the past several years. China agreed not to appeal the finding and was said to be revising its TRQ administration procedures. U.S. wheat growers were hopeful the revisions will result in increased imports of U.S. wheat.

And in February, a WTO panel agreed with the United States that China provides trade-distorting domestic support to its grain producers well in excess of its commitments under WTO rules.