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Lawyers, other representatives, expert(s), tribunal’s secretary

Report of the Panel

ABBREVIATIONS

AbbreviationDescription
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 titleFull 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 Services, 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 and 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, EuropeanCommunities – 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
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 Argentina, 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 2009, 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
US – Gasoline Panel Report, 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

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 matter 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, Japan, 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 Panel proceedings as third parties.

1.3 Panel proceedings

1.3.1 General

1.7.
After consultation with the parties, the Panel adopted its Working Procedures5 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 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 detail 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 that 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 the Agreement on Agriculture, because, in 2012, 2013, 2014, and 2015, China provided domestic 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 Panel, 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 arguments of the parties are reflected in their executive summaries, provided to the Panel in accordance with paragraph 19 of the Working Procedures adopted by the Panel (see Annexes B-1 and B-2).

5 Arguments of the third parties

5.1.
The arguments of Australia, Brazil, 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 Annexes 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 appropriate, 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.
6.4.
As an additional observation of a general nature, we would like to note that, in the "Findings" section of the 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 paragraph 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 paragraph 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 China 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 parties' 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 modify the wording of the first sentence of paragraph 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 notes that the language used appears 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 United 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 notes 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 suggests 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 fourth sentence by replacing "China's domestic 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 suggests 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 States, 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 exceeded 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 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 States 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 disputes22, 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 prejudiced 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 and 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 meeting 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 third 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 requested 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 invoke 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 previously 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 limited 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, balancing 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 public37, 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 into two arguments: the "underlying rationale" for previous decisions by panels and the Appellate Body to open their meetings to observation by other WTO Members and the public38 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 United 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 the public access to the United States' statements during the Panel meetings.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 session44, 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 the 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 treat 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 mentioned 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 disclosing their position to the 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, regardless 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 DSU 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 previous 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 that 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 Body 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 to 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 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 accommodate 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 fact 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 authorization 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 Appellate 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 session 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' right 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 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 the 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 that 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 States' 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 China'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 problematic 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 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 United 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 follow 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 limitation 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 right 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 arbitrator was able to address the fact that Mexico expressly opposed such request being granted. According 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 issue 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, impartiality, independence and integrity72, and that it had the power to authorize requests for holding fully open hearings, provided 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 submits 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 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 standard working procedures in order to hold partially open meetings in this 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 parties 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 the 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 challenging 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 "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' first written submission, which mentions market price support programmes 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 States 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 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 grain 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 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 products, 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 and 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 regard 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 producers 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 payments. 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 by 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 resulted 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 finds 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 subsidy programs 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, Indica 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-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 States' 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 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 involved, 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 provision 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
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, where 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 that 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 supports 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 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 incomes 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 governments 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 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 market 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 emphasized 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, similar 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 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, the 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 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

[SEE IMAGE IN SOURCE DOCUMENT]

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

Figure 2: Corn prices, 2012 – 2017

[SEE IMAGE IN SOURCE DOCUMENT]

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 Figure 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 major corn-producing Chinese provinces. If such a practice had been maintained, one would 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 the form of market price support. We base our conclusion on the documentary evidence, which reflects 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 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 following 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 Article 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 supportfor 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 question 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.
7.86.
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 connection, 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 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, including 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 market 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 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 Documents").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 issues, 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 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 products 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 publicize 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 the Annual Notices.241 The Implementation Plans relating to wheat, Indica rice and Japonica rice follow a similar structure and use a similar language, allowing analogous conclusions about the operation of the wheat and rice measures. Therefore, we consider below 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 various 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 guidance 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 price."247 They further instruct Sinograin 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 minimum 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

YearWheatEarly-season Indica riceMid- 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 encourage other entities' involvement in implementing the minimum 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 China's obligation under Article 7.2(b) of the Agreement on Agriculture.263
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 rice265 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 programmes 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, accordingly, 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 under 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.

7.4.2 Domestic support obligations 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 Part 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 domestic 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 during 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 Agriculturecontains 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 Measurement of Support or] AMS".279 China also contends 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, in 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 deminimis 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, we 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 China'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 in assessing a Member's compliance with its domestic support reduction 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 of 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 supporting 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 methodology 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 well 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.
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 calculated. 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 in 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 calculated "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 of 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 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":

[SEE IMAGE IN SOURCE DOCUMENT]

Where:

[SEE IMAGE IN SOURCE DOCUMENT]

[SEE IMAGE IN SOURCE DOCUMENT]

[SEE IMAGE IN SOURCE DOCUMENT]

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 that 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 less 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 the 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 AMS."291 According to China, the dictionary meaning of "data" refers to "an item of information"292 and that in 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 particular 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 formulae), 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 Member at the time of accession.296 For the United States, this 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 "related items of (chiefly numerical) information 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.
7.144.
As a whole, taken in the context of Articles 1(a) and 1(h) of the Agreement on Agriculture, the Panel understands the 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 tables 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) and 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 the 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 relevant 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 Current 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 supporting material incorporated by 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 the 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 it 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 in 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 the 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 after 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 aggregating 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 instrument 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 separate and distinct prepositions. The United States claims that if "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 relevant 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 calculation of AMS and Current Total AMS321, 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 AMS324, the United States emphasises that Articles 1(a)(ii) and 1(h)(ii) 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 compared 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 differences, 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 different 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 differences 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 express 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, 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 incorporated 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 higher 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 Body 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 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 because 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 production (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 Agriculture.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 domestic-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 assess China's compliance with its domestic support commitments under the Agreement on Agriculture. As we have stated 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 rights 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

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", it 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 the 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, this 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 otherwise 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 Agriculturedoes not define "the applied administrative price", nor does it contain any specific guidance concerning the methodology to use to determine 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 characterization 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.
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/MT2012201320142015
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 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." 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 terms 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, 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 the 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 average 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 requirement 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 Agriculturesupport 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.

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.
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, the 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 given that no explicit requirement exists with regard to the base period in the context of domestic support, acceding Members can utilize a "base period" other than 1986 to 1988 when they provide domestic support information 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 of 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 an "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 base 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 States claims that the fifth column of supporting table DS 5 is labelled "external reference price" and not "fixed" 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 supporting 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 provide 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 base periods, only 10 used alternative FERPs and that this does not amount to a consistent practice.385 The United States explains that these Members were Saudi Arabia, Jordan, Croatia, Lithuania, China, 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 nine 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 one 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 accessionBase period used389Supporting documentNotes
Afghanistan 29 July 2016 2009-2011 WT/ACC/SPEC/AFG/2
Albania 8 September 2000 1996-1998 WT/ACC/SPEC/ALB/4/Rev.4
Armenia 5 February 2003 1995-1997 WT/ACC/SPEC/ARM/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/KHM/3/Rev.2
Cape Verde 23 July 2008 2003-2005 WT/ACC/SPEC/CPV/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/HRV/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/EST/4
Georgia 14 June 2000 1996-1998 WT/ACC/SPEC/GEO/2/Rev.1
Jordan 11 April 2000 1994-1996 WT/ACC/SPEC/JOR/2/Rev.3 Includes MPS for the base period.
Kazakhstan 30 November 2015 2010-2012 WT/ACC/SPEC/KAZ/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/LAO/1/Rev.1 Includes MPS for the base period.
Latvia 10 February 1999 1994-1996 WT/ACC/SPEC/LVA/2
Liberia 14 July 2016 2011/2012-2013/2014 WT/ACC/SPEC/LBR/1/Rev.1
Lithuania 31 May 2001 1995-1997 WT/ACC/SPEC/LTU/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/807/5/Rev.2 Includes MPS for the base period.
Moldova 26 July 2001 1996-1998 WT/ACC/SPEC/MOL/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/CGR/1/Rev.2
Nepal 23 April 2004 1995/1996-1997/1998 WT/ACC/SPEC/NPL/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/OMN/2/Rev.2
Panama 6 September 1997 1991-1993 G/AG/AGST/PAN
Russia 22 August 2012 2006-2008 WT/ACC/SPEC/RUS/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/SAM/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 2002/2003-2007/2008 (a 6-year period).
Saudi Arabia 11 December 2005 2001-2003 WT/ACC/SPEC/SAU/1/Rev.10 Includes MPS for the base period.
Seychelles 26 April 2015 2010-2012 WT/ACC/SPEC/SYC/4/Rev.2
Chinese Taipei 1 January 2002 1990-1992 WT/ACC/SPEC/TPKM/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)
Tajikistan 2 March 2015 2008-2010 WT/ACC/SPEC/TJK/3/Rev.5
Tonga 27 July 2007 1996/1997-1998/1999 WT/ACC/SPEC/TON/3/Rev.3
Ukraine 16 May 2008 2004-2006 WT/ACC/SPEC/UKR/1/Rev.12 Includes MPS for the base period.
Vanuatu 24 August 2012 2006-2008 WT/ACC/SPEC/VUT/6/Rev.3 Uses the term "representative period".
Viet Nam 11 January 2007 1999-2001 WT/ACC/SPEC/VNM/3/Rev.7 Includes MPS for the base period.
Yemen 26 June 2014 2006-2008 WT/ACC/SPEC/YEM/1/Rev.2