USA Rice Works to Overcome Trade Issues with South Korea

Last week’s Agricultural Trade Mission (ATM) to Korea gave USA Rice the opportunity to highlight strong market opportunities for U.S. rice but also to underscore continued obstacles put in our way by Korea’s government.

Jim Guinn, USA Rice director of Asia Promotion Programs, participated in the ATM organized by the U.S. Department of Agriculture (USDA) along with 49 companies, commodity trade associations, two regional trade groups, and representatives from four state Departments of Agriculture. The mission was led by USDA’s Foreign Agricultural Service Administrator Ken Isley.

USA Rice delivered to Isley and to the Office of Agricultural Affairs personnel stationed in the U.S. Embassy in Seoul the concerns of the U.S. rice industry relative to the Korean rice import regime. Isley was also briefed by USA Rice staff on those issues prior to the start of the trade mission.

“South Korea offers a multitude of opportunities for U.S. agricultural exports due to the lack of arable land, just 17 percent, and the small size of the average farm, just 4 acres,” said Guinn.

While most agricultural products were covered in the U.S.-Korea free trade agreement (KORUS), rice was specifically excluded, and agriculture was not part of the recently concluded update of the agreement.

Guinn explained that “the U.S. rice industry has three issues with the Korean rice import scheme as it is currently being implemented.

First, the U.S. and several other rice exporting countries have never agreed to the calculated over quota tariff of 513 percent, which is indefensibly high.

Second, the U.S. does not support the elimination of country specific quotas and elimination of the table rice provision.

And, third, the suspension of table rice auctions has made it extremely difficult for retailers to satisfy demand by regular customers of U.S. rice creating an artificial shortage resulting in price increases. It also goes against the spirit of the agreement and is discriminatory since it does not affect Thai rice.”

“In short,” Guinn said, “the industries using U.S. rice would like better and more consistent access to U.S. rice.”

End users of U.S. rice for both table rice and rice for processing have expressed concerns about the import regime in South Korea since all imports are implemented by a sole entity tied to the Korean government.

Guinn said, “Retailers have had great difficulty in maintaining access to U.S. rice. In September 2017 the government suspended auctions of U.S. table rice, reportedly due to political pressure because of a large local harvest, and did not resume auctions until April 2018. Auctions since then, however, have been so delayed that as of September 2018, only 45 percent of the 2016 table rice quota had been auctioned. Furthermore, in September 2018 the government again suspended table rice auctions for U.S. rice.”

While USA Rice made its case in Seoul, officials from USDA and the Office of the U.S. Trade Representative met separately with Korean government officials in Washington, DC last week to discuss a range of market access issues, including rice.

“The terms of rice access in Korea have been uncertain since 2015,” said Bob Cummings, USA Rice COO. “And we’ve made clear to the Administration that it’s time to restore certainty and access to this market.”

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