USTR - United States Files WTO Case Against Turkey Over Rice Restrictions
Office of the United States Trade Representative

 

United States Files WTO Case Against Turkey Over Rice Restrictions
11/02/2005

WASHINGTON – At a hearing before the House Agriculture Committee, U.S. Trade Representative Rob Portman announced that the United States filed a World Trade Organization (WTO) case against Turkey today due to its unfair restrictions on U.S. rice exports.

Turkey restricts rice imports in various ways through its import licensing requirements. Just yesterday, Turkey reinstituted its domestic purchase requirement. This requirement allows limited imports of rice at reduced duty rates, but only if an importer also purchases significant quantities of domestic rice – in some cases, more than three times the quantity to be imported. As a result of these unfair restrictions, Turkey’s imports of U.S. rice of all types have declined by two-thirds since 2003, with imports of U.S. milled and semi-milled rice down by 91 percent over the same period.

"American rice farmers deserve fair access to Turkey’s market," said Portman. "Right now American rice exports are being unfairly restricted. That’s wrong. We have raised this issue with the Government of Turkey on several occasions, both bilaterally and in Geneva, but our concerns have not been addressed. We sincerely hope that Turkey uses the opportunity of WTO consultations to resolve these concerns."

"The Bush Administration is committed to leveling the playing field to ensure our farmers are treated fairly by opening markets around the world and aggressively enforcing our trade agreements," said Agriculture Secretary Mike Johanns. "America’s farmers have world-class products and are eager to compete in the global market place but deserve fair treatment."

With 70 million potential consumers, Turkey’s domestic rice market is forecast to be worth more than $200 million in 2006.

Consultations are the first step in a WTO dispute. Under WTO rules, parties that do not resolve an issue through consultations may refer the matter to a WTO dispute settlement panel.


Background:

U.S. rice exporters face serious market access restrictions in Turkey resulting from that country’s import licensing system for rice.

Current Turkish regulations establish a tariff-rate quota for rice. The regulations permit the importation of 300,000 metric tons of milled rice equivalent at preferential tariff levels (20 percent for paddy rice, 25 percent for brown rice, and 43 percent for milled rice) below the over quota rate of 45 percent, provided that importers purchase significant quantities of domestic rice from the Turkish Grain Board or Turkish producers or producer associations. The amount of domestic rice that must be purchased, which in some cases is more than three times the quantity of rice to be imported, varies according to the type of rice being imported and the source of the domestic rice. Turkey does not permit the import of rice at the over-quota rate. Thus, when the domestic purchase requirement is not in effect, such as during the Turkish rice harvest, no imports are permitted. As a result of these restrictions, Turkish imports of U.S. rice of all types have declined dramatically over the past three years.

The U.S. Government has expressed its concerns regarding Turkey’s import restrictions on rice on several occasions over the past three years. Turkey has consistently denied that a problem exists.

By conditioning the issuance of licenses to import at preferential tariff levels upon the purchase of domestic rice, not permitting imports at the bound rate, and implementing a de facto ban on rice imports during the Turkish rice harvest, Turkey appears to be acting inconsistently with several WTO agreements, including the Agreement on Trade-Related Investment Measures, the General Agreement on Tariffs and Trade 1994, the Agreement on Agriculture, and the Agreement on Import Licensing Procedures.

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