Market Access an Uphill Climb in EU

Oct 21, 2016
BRUSSELS, BELGIUM -- Popular opposition to trade agreements and EU protectionism of “sensitive” agricultural products, including rice, are two factors holding back progress on a massive trade deal between the United States and the European Union called the Trans-Atlantic Trade and Investment Partnership, or T-TIP.  A delegation of USA Rice members and staff traveled here last week to meet with EU officials, private sector agriculture groups, and the U.S. Department of Agriculture’s office at the U.S. Mission to the EU.  

“The EU imports a large amount of rice – 1.3 million metric tons each year, but the U.S. never recovered the market share lost following the Liberty Link incident ten years ago,” said Chris Bonnesen, USA Rice EU Trade Policy Subcommittee chairman and president, ADM Rice, Inc.  “The U.S. exports about 50,000 metric tons of rice to the EU, with at least 90 percent going to the UK, far below our traditional annual sales of nearly 300,000 tons distributed all over the EU.  Unreasonable import duties on U.S. rice are responsible.”

The EU runs a highly complex and discriminatory import regime for rice based on extensive use of tariff rate quotas (TRQ) by country and region, and by type and form of rice.  Least Developed Countries, such as Cambodia and Myanmar (Burma), receive duty free access for rice and imports have surged in recent years while U.S. access is largely constrained by a 38,721-metric-ton TRQ for fully milled rice.

“If we don’t ship milled rice under the TRQ, then our customers face an EU import duty of about $194 per metric ton,” said Producers’ Rice Mill VP and EU Subcommittee member Johnny Sullivan.  “It’s very hard to be competitive in Europe with that level of tariff when rice imported from most other origins has little or zero tariffs.”

USA Rice is calling for the full elimination of the EU’s import duties on all types and forms of U.S. rice.  

“The market in Europe has changed over the past ten years, with buyers more price conscious and less familiar with U.S. rice,” said delegation member Terry Harris, vice president at Riceland Foods, Inc.  “This is a new trading environment and yesterday’s import policies and tariffs need major reform.”  

While the Obama Administration has a goal of completing the T-TIP negotiations this year, the two sides are far apart on key areas and European public opinion is increasingly hostile to the idea of any agreement of this type.  

Bonnesen said in order to make it worthwhile for the entire rice industry to participate in this important and traditional market, USA Rice will continue to advocate for a robust and comprehensive trade agreement with the EU as the vehicle to improve access and the U.S’s competitive position in Europe.