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EU introduces new rice import tariffs from September 1 2004
At the July Agriculture Council, Commission proposals to alter the EU’s import duties for rice were approved by the Council. From September 1, 2004, brown rice will face a duty of EUR 65/MT and milled rice EUR 175/MT. India and Pakistan will face zero duties for basmati rice exported to the EU, with in addition a couple of hybrid varieties of basmati being added to the list of basmati varieties recognized by the EU.

These new import tariffs are temporary1. For these changes to become permanent, a change to the EU’s rice market organization legislation will be needed. This would have to be completed by the summer of 2005.

As part of the CAP Reform package agreed in the summer of 2003, the European Commission received a mandate from the Council to renegotiate the EU’s import duty calculation system known as the Margin of Preference (MOP). This mandate was based on Article 28 of WTO rules. Negotiations between the Commission and the four main suppliers to the EU rice market – U.S., Thailand, India and Pakistan – lead to agreements between the Commission and India and Pakistan, but the Commission were unable to reach an agreement with either Thailand or the U.S. Council approval of the Commission proposals was not unanimous. UK, Denmark and Sweden voted against while Poland, Lithuania, Czech Republic and Slovakia abstained. This meant that the proposal was very close to being blocked.

The German delegation issued a statement, which welcomed the agreements reached with India and Pakistan and called upon the Commission to continue the negotiations with Thailand and the US in order to reach a satisfactory outcome for all the parties concerned.

This statement was supported by the Irish, Finnish, Luxembourg, Dutch, Austrian, Belgian, Slovenian, Latvian and Hungarian delegations. The United Kingdom, Sweden and Denmark also issued a joint statement. This declaration welcomed the agreements reached with India and Pakistan on basmati rice and underlined the concerns of these delegations as regards the calculation and the level of the new tariff rates and urged the Commission to negotiate with the US and Thailand with a view to finding a mutually accepted outcome. The Czech Republic also supported this statement. USA Rice Federation swiftly condemned the EU’s unilateral replacement of the MOP system with a fixed import tariff of EUR 65 for brown rice, with Carl Brothers, chairman of USA Rice’s International Trade Policy Committee, stating that “The withdrawal of the margin of preference concession by the EU without adequate compensation means the imminent loss of a cash market for U.S. brown rice that’s averaged just over $90 million annually in the last five years”. From the same USA Rice Federation press release, Paul T. Combs, a Missouri rice farmer and member of USA Rice’s EU Trade Policy Subcommittee explains “Rice prices in Europe are set to drop significantly starting in September, and the import duties on U.S. brown rice would go to zero in response if the MOP were applied. Instead, the EU is putting up more trade barriers when there should be none”. USA Rice then calls on the U.S. government to respond strongly to the EU’s withdrawal of a negotiated concession.
MGR Archive 4.8.2004
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Russia Rapan $ 700
USA Jupiter Rice $630
USA Calrose #1 $830
USA Calrose #1 Paddy $480
EU Prices Baldo €660
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