For 20 years, Korea has enjoyed an exemption from WTO rules that require members to use a tariff-based system for imports But as announced last week Korea looks for rice pricing from World Trade Organization which is going to begin on Jan 1, 2015.
This special treatment to Korea has allowed Korea to fix the absolute maximum amount of rice imports — currently 408,700 metric tons in a calendar year — in exchange for not setting up a tariff-based system.
Firstly the Korea was given relaxation for the ten years and it had to expire in the year 2004 but the highly political nature of rice in Korea had prevented the government from moving to tariffs, and Korea negotiated a 10-year extension of special treatment with WTO members in 2004. More at http://www.riceoutlook.com/south-korea-liberalization-of-imports-agitates-farmers/
As a result of this negotiation, the United States, China, Thailand, and Australia received country-specific tariff rate quotas (CSQ) which in effect committed Korea to import a minimum amount of rice from those countries. The U.S. CSQ is 50,076 MT per year. U.S. rice exports to Korea averaged just under 90,000 MT in 2004-2013.
WTO has assigned some guidelines and rules for Korea to transit into new system from Jan1.
According to that guidelines, Korea will establish a tariff rate quota (TRQ) that will provide at least as much access as provided for in 2014 at a zero, or very low duty rate, and establish a tariff rate that will apply to imports above the TRQ. Korean media has reported over-quota duty rates ranging from 200 to 700 percent. The USA Rice Federation has been in close contact with the Obama Administration on both the within quota level and out-of-quota duty.
Bob Cummings, USA Rice COO said that”Going forward, the size of Korea’s tariff rate quota, import duties inside and outside of the TRQ, and the future of country-specific quotas are going to be established through negotiations with affected suppliers,”.
“We are looking to U.S. negotiators to be aggressive to make sure that Korea lives up to its WTO obligations, and that the new tariff-based regime provides meaningful and real access for U.S. exporters, particularly in the all-important table rice market. All parties will need to move quickly if Korea is to meet the Jan. 1 deadline.”