U.S., EU reach agreement on American rice exports
The United States has reached an agreement with the European Union ensuring market access for American brown rice exports to the EU, cooling a major trade dispute and preventing the March 1 withdrawal of tariff concessions.
On Sept. 1, 2004, the EU changed its rice import system by raising tariffs on brown rice imports above the rate to which it had agreed as part of the EU’s WTO obligations. Under the WTO rules, when a member makes a change in its tariff obligations, its major trading partners in the affected products are able to negotiate offsetting benefits.
If the United States and EU had not been able to reach this agreement, the U.S. government had the right to raise tariffs on an offsetting amount of imports on products of which the EU is the dominant supplier to compensate for the higher EU tariff.
“We felt that the new European system was unfair, and working with our industry, we have been actively discussing how to solve this problem with our European counterparts for a number of months,” said acting U.S. Trade Representative Peter Allgeier, in a statement Monday. “While we were ready to exercise our WTO rights to withdraw concessions, resolving this issue bilaterally is a much better outcome for everyone.”
“I am very pleased that our negotiating teams have managed through this agreement to find a solution to a complex issue to our mutual satisfaction,” said EU Agriculture Commissioner Mariann Fischer Boel in a statement. “This agreement will enable us to preserve balance in our rice market, whilst keeping our markets largely open to rice imports from all countries.”
The U.S.-EU rice agreement will increase market access opportunities for American brown rice exports into the EU market, valued at about $33 million a year since 1999. The EU is a top market for U.S. brown rice exports.