EU, US resolve trade fight over rice

By: | at 07:00 PM | International Trade  

The Bush administration announced that it has resolved a dispute with the European Union over US-grown brown rice that had threatened to spark another trade battle with Europe.

The administration said Europe had agreed to demands to modify higher tariffs it had imposed on brown rice grown in the US Europe is the biggest market for US rice, accounting for $33 million in exports.

“I am pleased that we have been able to resolve this dispute with Europe in a way that expands markets opportunities for US rice exporters,” Acting US Trade Representative Peter Allgeier said in a statement announcing the agreement.

US rice farmers also applauded the deal.

“We believe today’s agreement maintains the EU as the No. 1 market for US brown rice,” said Carl Brothers, chairman of an international trade panel for the USA Rice Federation, a trade group. “We commend our trade negotiators ... for supporting the US industry in an extremely complex and lengthy negotiation.”

The announcement came one day before a March 1 deadline in which the administration had said it would raise tariffs on a variety of European products, including fruit, vegetables, cheese and spices. The action was to be in retaliation for higher tariffs the E.U. was imposing on U.S. rice shipments that the administration contended were in violation of World Trade Organization rules.

On Sept. 1, the EU changed its rice import system by raising tariffs on brown rice imports above the rate it had agreed to set in global trade negotiations. The administration in turn said it would seek compensation for these higher tariffs by raising tariff rates on E.U. products.

Under the negotiated settlement, if EU imports of brown rice, excluding basmati rice, fall below a certain level, the tariff being imposed will automatically be lowered by EUR30 per metric ton.

The EU also agreed to allow for growth in US shipments of rice and to set the initial tariff at EUR42.50 per metric ton.

“This is a very good agreement for US rice farmers, as well as European consumers, who will enjoy better access to our high-quality rice,” said Allen F. Johnson, chief US agriculture negotiator. (Dow Jones & Company, Inc.)


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