Under the agreement, South Korea will receive 132,304 tons of U.S. rice annually at an annual value of approximately $110 million. South Korea has also accepted important disciplines to ensure transparency and predictability around the tendering and auctioning of American rice. In most global markets, the U.S. rice industry faces fierce competition from Asian suppliers, with Thailand being the world`s largest rice exporter, followed by Vietnam, Pakistan, India and China. These six countries, including the United States, account for more than four-fifths of annual rice exports. “Thanks to President Trump`s leadership, this agreement provides our farmers with the largest guaranteed volume of access to the rice market in Korea that the United States has ever enjoyed,” said U.S. Trade Representative Robert Lighthizer. “It will be extremely beneficial for U.S. producers and their customers in Korea, who will have access to high-quality and competitive U.S. rice.” In 2014, the United States, Australia, China, Thailand and Vietnam concluded negotiations with South Korea at the end of its special treatment for rice access under the World Trade Organization (WTO). Trade agreements under the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA) have helped to increase the level of U.S.
rice exports to the world market since the mid-1990s. As part of the 1994 Uruguay Round Agreement, which created the WTO, Japan and South Korea agreed to partially open their domestic markets to imported rice. In 2002, Taiwan also agreed to partially open its domestic market to rice imports. Since then, Northeast Asia has become one of the largest markets for rice exports to the United States and a stable export market, with annual import volumes determined by its WTO commitments. As a result of these negotiations, South Korea agreed to include in its WTO schedule a tariff quota of 408,700 tonnes for rice imports, with a 5% quota duty and a quota duty of 513% above quota duty. Of these 408,700 tonnes, South Korea will divide 388,700 tonnes of rice into country-by-country quotas under a multi-lateral agreement with the United States, Australia, China, Thailand and Vietnam. The remaining 20,000 tonnes are managed worldwide, for which U.S. suppliers can also supply. With regard to the rice trade in particular, evFTA includes all the most exported rice varieties from Vietnam to the EU: ground rice, shelled rice, chips and fragrant rice. These will result in largely tax-free tariff quotas once the free trade agreement is implemented, with the exception of the rice break-up, which, when the free trade agreement comes into force, will be subject to a 50% tariff reduction after a five-year linear reduction. 123With that the United States produces less than 2% of the world`s rice, it is a major exporter that accounts for more than 10% of the annual volume of world rice trade. The United States is considered a consistent, reliable and fast supplier of high-quality rice to global long and combined grain markets.
Exports are important to the U.S. rice industry, as the global market accounts for about half of its annual sales. “Today`s announcement is another tremendous testament to President Trump`s determination to expand export opportunities for U.S. farmers and ranchers,” said Sonny Perdue, U.S. Secretary of Agriculture. “Exports are essential to the economic health of the U.S. rice industry, with half of our crop exported each year.