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2004-11-24 20:02:08
US Gets Tough to Rice Market Access
US Gets Tough to Rice Market Access

[Korea Times 2004-11-23 16:18]  

By Bae Keun-min
Staff ReporterSouth Korea is facing last-minute pressure from the United States, with conflict over its conditions for allowing another suspension of the opening of Korea’s rice market.Instead of China, the U.S. has emerged as Seoul’s biggest obstacle, as Beijing has shown signs of flexibility in its demands while Washington has shifted its stance, seeking to squeeze South Korea as much as it can. South Korea and the U.S. are scheduled to hold a seventh round of one-on-one meeting today in Washington, but hope for a settlement appears slight.According to industry sources, Washington has demanded that Seoul allow imported rice to be sold to consumers at retail stores, gradually increasing the quantity of this rice to 75 percent of imports over the next 10 years, in return for granting Korea another 10-year suspension for the liberalization of its rice market. So far imported rice, which has increased from 1 percent of average domestic consumption between 1988 and 1990 to 4 percent for the last 10 years based on the minimum market access (MMA) rule of the 1994 Uruguay Round agreement, has only been sold to food processors. But Seoul is finding it hard to accept the U.S.’ demand as farmers’ coalitions have staged street rallies against a further opening of the market or any raising of the import quota in return for the extended suspension of the full-scale opening of the market. Moreover, the U.S. is asking Korea to double the MMA quota, also known as the tariff rate quota, to 8 percent of domestic consumption.Seoul has acknowledged that an increase in the import quota would be required for securing another grace period.But policymakers and economists believe that it would be better for Korea to make a full opening of the market at a higher tariff rate if Korea was asked to open the rice market to 8 percent of domestic consumption.Through the tariffication formula set by the World Trade Organization, it is estimated that private companies would not increase imports to more than 8 percent of domestic consumption due to the prohibitive tariff rate.Last week, Seoul held talks with Beijing without specific results. But officials participating in the session said China showed flexibility by softening its demand that Korea import up to 8.9 percent of domestic consumption, the toughest demand among the countries negotiating with Korea. In addition, China said the grace period must be limited to five years.The Korean government has been holding rice talks with nine nations, namely the United States, China, Australia, Thailand, India, Pakistan, Egypt, Argentina and Canada, since May.Under WTO rules, Korea is required to specify the manner in which it will open its rice market.Korea needs to gain the consent of all nine countries in order to receive another grace period for the tariffication.

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