Korea bound?

ARLINGTON, VA -- As expected, the Korean government announced late last week that the country would seek approval in the World Trade Organization (WTO) to move to rice "tariffication" beginning on January 1, 2015.  For 20 years, Korea has enjoyed an exemption from WTO rules that require members to use a tariff-based system for imports.  This special treatment has allowed Korea to fix the absolute maximum amount of rice imports - currently 408,700 metric tons in a calendar year - in exchange for not setting up a tariff-based system. 

The highly political nature of rice in Korea had prevented the government from moving to tariffs, and Korea negotiated a 10-year extension of special treatment with WTO members in 2004.  As a result of this negotiation, the United States, China, Thailand, and Australia received country-specific tariff rate quotas (CSQ) which in effect committed Korea to import a minimum amount of rice from those countries.  The U.S. CSQ is 50,076 MT per year. U.S. rice exports to Korea averaged just under 90,000 MT in 2004-2013.

WTO rules provide guidelines for how Korea will transition to the new system.  Korea will establish a tariff rate quota (TRQ) that will provide at least as much access as provided for in 2014 at a zero, or very low duty rate, and establish a tariff rate that will apply to imports above the TRQ.  Korean media has reported over-quota duty rates ranging from 200 to 700 percent.  The USA Rice Federation has been in close contact with the Obama Administration on both the within quota level and out-of-quota duty.

"Going forward, the size of Korea's tariff rate quota, import duties inside and outside of the TRQ, and the future of country-specific quotas are going to be established through negotiations with affected suppliers," said Bob Cummings, USA Rice COO.  "We are looking to U.S. negotiators to be aggressive to make sure that Korea lives up to its WTO obligations, and that the new tariff-based regime provides meaningful and real access for U.S. exporters, particularly in the all-important table rice market.  All parties will need to move quickly if Korea is to meet the January 1 deadline."

Contact:  Michael Klein, (703) 236-1458

ARLINGTON, VA -- Last week, the CODEX Alimentarius Commission, a working group of the United Nations Food and Agriculture Organization and World Health Organization, approved a recommendation from their Committee on Contaminants in Foods (CCCF) to establish a maximum level (ML) for inorganic arsenic in polished (white) rice of 0.2 mg/kg, along with the future development of a code of practice for growing rice.

Reece Langley, USA Rice Federation's vice president for government affairs participated on behalf of the U.S. industry in the April CCCF meeting where the recommendation to CODEX was made (see USA Rice Daily, April 4, 2014).

"We feel now, as then, that this white rice ML is not expected to present a problem for U.S.-grown rice based on testing to date," said Langley.  "Of course no ML was established for brown rice and that is something that we'll continue to monitor and work on."

Langley says the CCCF will discuss the brown rice ML issue at their next meeting in early 2015 and that he will participate in the sessions.

It is expected that countries will use the CODEX standard as a benchmark for establishing their own national standards. Under World Trade Organization agreements these levels are considered to be protective of human health and requirements in trade unless individual nations that want to establish a different level can show special circumstances.

Contact:  Michael Klein, (703) 236-1458

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