Rice leaders seek strong EU response

USA Rice Federation leaders have written the Bush administration urging it to strongly oppose any attempts by the European Union to renegotiate the margin of preference concessions for sales of U.S. brown rice to the EU.

The letters to Agriculture Secretary Ann Veneman and U.S. Trade Representative Robert Zoellick came on the heels of the European Commission's vote to reform the EU's Common Agricultural Policy, including a 50 percent reduction in the intervention price for rice and other commodities.

But the European Commission also notified the World Trade Organization that it intends to try to alter the margin of preference concession on rice, which was first agreed to under the Uruguay Round of the old General Agreement on Tariffs and Trade.

“The WTO notification earlier this month by the European Communities that the EC intends to renegotiate, under Art. XXVIII, the margin of preference concession as regards rice is a serious threat to market access for U.S. rice,” the letter said.

“This notification also runs completely counter to the market access expectations of the United States and many other WTO members in the Doha Round negotiations. We urge a strong response in opposition by the administration formally in the WTO and bilaterally with the European Commission.

The letter explained that the MOP concession is the foundation for the U.S. market for brown rice in the EC, the fifth largest market for U.S. rice. The United States shipped 396,000 metric tons of rice, valued at $72 million, to the EU in 2002. Because of prohibitive duties outside of the MOP, and the failure of the EC to implement fully the MOP for milled rice, access for U.S. rough and milled rice is severely limited.

U.S. exporters are unlikely to benefit from these lower duties, however, if the MOP is negotiated, said the letter signed by USA Rice Chairman Gary Sebree and President and CEO Stuart Proctor.

“In fact, the EC is moving backwards on rice by seeking to restrict market access (through a new MOP) in an effort to backstop domestic reform,” they said.

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