WTO panel set up on China-USA row on grain import quotas

GENEVA (Reuters) - A World Trade Organization (WTO) dispute panel was set up on Friday to rule on a U.S. complaint over Chinese import quotas on farm goods including wheat, rice and corn, a trade official said.

The panel on tariff rate quotas (TRQs) for agricultural products was automatically established as it was the second request by the United States at the WTO Dispute Settlement Body, after China blocked the first attempt on Aug. 31.

The row was initiated under the Obama administration which sought consultations on Dec. 15, but the Trump administration moved ahead with the case saying that the quotas hurt U.S. farm exports.

China's delegation told the WTO's meeting on Friday that it was disappointed at U.S. moves against its "legitimate measures with regard to vital agricultural staples", the trade official said. China was seriously fulfilling its WTO commitments, it said.

The U.S. delegation said that when China joined the trade watchdog it pledged to remove import restrictions and operate its tariff-rate quotas in a transparent, predictable and fair manner. "But the reality appears very different," it said.

The U.S. Trade Representative has said global prices for the three commodities were lower than China's domestic prices, yet China did not maximize its use of TRQs, which offer lower duties on a certain volume of imported grains every year.

The USTR said that limited market access for shipments from the United States, the world's largest grain exporter, and other countries.

Some 14 countries including Australia, Brazil, Canada, Japan, and Thailand - as well as the European Union (EU) - have joined the dispute as third parties.

(Reporting by Stephanie Nebehay; Editing by Hugh Lawson)