WASHINGTON – Facing an imminent deadline, the United States announced today
it has asserted its World Trade Organization (WTO) rights and notified the WTO
of its intent to withdraw certain tariff concessions because it has not reached
agreement with the European Union (EU) over access to the European rice
market.
The EU unilaterally decided last September to change its rice import system
by raising tariffs on brown rice imports above the rate to which it had agreed
as part of the EU’s Uruguay Round obligations. The new system unfairly limits
the access of American rice farmers to the European market, affecting U.S. brown
rice exports valued at approximately $33 million a year on average since
1999.
Under WTO rules, when a Member makes a change in its tariff obligations,
certain trading partners are able to negotiate offsetting benefits. Because the
U.S. and the EU were not able to reach agreement, the U.S. has the right to
raise tariffs on an offsetting amount of imports. The EU has substantially
increased tariffs on U.S. rice exports. The U.S. action will allow tariffs
to be increased on products of which the EU is the dominant supplier in order to
compensate for the higher EU tariff. March 1, 2005 is the deadline for the U.S.
to assert its rights, and WTO rules require the U.S. to provide a 30 day notice
of the action.
"I’m disappointed we have not been able to resolve this dispute with Europe.
We feel that the new European system is unfair," said U.S. Trade Representative
Robert B. Zoellick. "We have been trying for months to find a fair resolution
that balances the concerns of both sides. Since we have not resolved this
problem through negotiations, we have to notify the WTO of our intent to
exercise our rights to withdraw concessions."
Background:
Until September 1, 2004, the EU had determined the tariff for brown rice
imports under the margin of preference (MOP) regime negotiated during the
Uruguay Round. The MOP regime allowed the EU’s applied tariff rate to be set
lower than the bound tariff rate, based on the differential between the EU
intervention (support) price and the reference import price, taking into account
an adjustment factor. EU reforms to the Common Agricultural Policy (CAP) in 2003
significantly lowered the intervention price for rice, which would have led to a
substantial reduction in the EU rice tariff under the MOP. As part of the CAP
reform package, the EU received a mandate from the Council to renegotiate the
MOP under the terms of GATT Article XXVIII.
Pursuant to WTO rules, the EU has been negotiating with the United States
since 2003 with respect to trade compensation, but no agreement has been
achieved appropriately compensating the U.S. for the EU’s tariff change.
List of Products Subject To Possible Withdrawal of Concessions
in Response to European Union (EU) Changes to its Rice Import Regime
HSCode |
Product |
04031090 |
Yogurt, not in dry form, whether or not flavored or containing add fruit or
cocoa |
04063085 |
Processed cheese (incl. mixtures), nesoi, n/o 0.5% by wt. butterfat, not
grated or powdered, subject to Ch4 US note 23, not GN15 |
07052100 |
Witloof chicory, fresh or chilled |
07108065 |
Brussels sprouts, uncooked or cooked by steaming or boiling in water, frozen,
not reduced in size |
08052000 |
Mandarins (including tangerines and satsumas); clementines, wilkings and
similar citrus hybrids, fresh or dried |
09042020 |
Paprika, dried or crushed or ground |
09102000 |
Saffron |
20019025 |
Artichokes, prepared or preserved by vinegar or acetic acid |
20032000 |
Truffles, prepared or preserved otherwise than by vinegar or acetic
acid |
20049010 |
Antipasto, prepared or preserved otherwise than by vinegar or acetic acid,
frozen |
20057050 |
Olives (not green) in a saline solution, canned, not pitted |
20057070 |
Olives (not green), in a saline solution, in airtight containers of glass or
metal but not canned |
20057075 |
Olives (not green) in a saline solution, not canned, nesoi |
20059030 |
Sauerkraut, prepared or preserved otherwise than by vinegar or acetic acid,
not frozen |
20087020 |
Peaches (excluding nectarines), otherwise prepared or preserved, not
elsewhere specified or Included |
Note: The product descriptions supplied above for the items of the Harmonized
Tariff Schedule of the United States (HTS) are for the convenience of the reader
and are not intended to delimit in any way the scope of the products that would
be subject to increased duties.