Mariann Fischer Boel

No. 23/05
February 28, 2005

EU AND US AGREE ON NEW EU RICE IMPORT REGIME

The European Union and the United States have agreed on a new regime for imports of husked rice into the EU. The agreement constitutes a positive and pragmatic solution, balancing the interests of EU producers with the need to supply the EU market on the one hand, while avoiding a potential trade dispute and preserving WTO rights of all parties concerned on the other.

EU Agriculture Commissioner Mariann Fischer Boel welcomed the agreement:

"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. 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 agreement establishes a mechanism to calculate applied duties on husked rice. The applied duty may be adjusted every six months based on a comparison between actual imports and a reference import level. In practice, the applied duty can be €65/ton, €42.5/ton or €30/ton depending on the operation of the mechanism. In July last year, the EU decided to adopt a bound duty for husked rice of €65/ton and for milled rice of €175/ton. These bound duties will be notified to the WTO.

Background

In order to adapt its rice import regime to the reform of the Common Agricultural Policy (CAP), the European Commission on 15 July 2003 notified the WTO of its intention to modify its system of import duties for rice, based on Article XXVIII of the General Agreement on Tariffs and Trade (GATT), which enables WTO members to modify concessions contained in their schedules of commitments. The European Commission then conducted negotiations with WTO members having negotiating rights. Two agreements were successfully concluded with India and Pakistan in July 2004, and negotiations are continuing with Thailand.