Jan 06, 2015
WASHINGTON, DC -- The United States joined four other members of the World Trade Organization (WTO) late last month in objecting to Korea's new rice tariffication scheme. The action did not prevent Korea from imposing the new tariff-based rice import system on January 1, but the new system has not been approved by the WTO, and Korea will very likely enter into negotiations with the five countries in order to lift the objections. The USA Rice Federation supports this action by the U.S. because Korea's new import regime is a significant step backwards on market access for U.S. rice.
Representatives from Australia, China, Thailand, and Vietnam, all rice exporters to Korea, joined the U.S. in "reserving," in WTO-speak, their country's position with respect to Korea's new tariff schedule for rice imports.
Korea's new scheme is designed to replace the previous system that was based on rigid import controls by the Korean government and expired on December 31, 2014.
Korea chose not to seek an extension of "special treatment" for rice imports within WTO rules, and instead opted to move to a tariff-based system. Korea has now imposed a rice import duty of 513 percent on any rice imported in excess of a quota of 408,700 metric tons annually. The Korean government will remain the sole importer of rice for this "in-quota" amount, and private entities may import above this amount, but would face the hefty over-quota duty.
Korea's new system abolished existing country-specific import quotas, including a 50,076-mt quota for the United States. Korea was also required to allocate 30 percent of rice imports each year to the "table" or retail market. This was a critical requirement that has enabled U.S. rice to establish demand among Korea's quality-conscious consumers and allowed effective promotion of U.S. rice. The over quota duty of 513 percent is prohibitive to trade and will effectively cap Korea's rice imports. Each of these developments is detrimental to U.S. access.
Korea imported just under 159,000 mt of U.S. rice in 2013. Exports lagged considerably last year however, with shipments down 86 percent through October.
"Bilateral discussions between the United States and Korea did not sufficiently address U.S. market access concerns, leading to the U.S. objection in Geneva," said USA Rice President and CEO Betsy Ward. "Korea's new import regime is in place, but will not be officially adopted by the WTO until member country reservations are lifted. The negotiating calendar is unclear now, but USA Rice will continue close coordination with the administration to ensure market access is preserved."
Contact: Bob Cummings (703) 236-1473