Ministry holds out for better deal
Bangkok Post, Wednesday, 7 July, 2004
EU's latest tariff offer creates too wide a gap
Phusadee Arunmas
Negotiations between the European Union and Thailand on new rice tariff rates have yet to be finalised, with the Commerce Ministry insisting that the difference in rates for white and husked rice should not be more than 80 to 90 euros per tonne.
The gap under the latest EU proposal is 110 euros per tonne, with white rice imports taxed at 175 euros per tonne and husked rice, or brown rice, carrying a tariff of 65 euros per tonne.
Commerce Minister Watana Muangsook, in a letter to EU Trade Commissioner Pascal Lamy and EU Agriculture Minister Franz Fischler, said the difference in tariffs between the two rice types should be no more than 80 to 90 euros per tonne.
A response to the letter is expected later this week.
Apiradi Tantraporn, the director-general of the Trade Negotiations Department, said a wider gap in tariffs between the two would potentially lead to higher imports of brown rice while hurting white rice exporters.
She said Thai white rice had relatively high added value, while brown rice could be further processed by EU millers.
"More negotiations are still needed, particularly on the gap between the tariffs for white rice and husked rice," Mrs Apiradi said.
"We have to wait for the EU's response to see whether the EU would still insist on the proposed price or come up with other forms of compensation."
Under the World Trade Organisation's rules, the EU could proceed with its proposed prices even as talks with trading partners are at an impasse. But in such a case, the affected country would be able to impose retaliatory measures.
"We think optimistically that we eventually could find appropriate solutions to the issue without resorting to retaliatory measures," Mrs Apiradi said.
Under the EU's Common Agricultural Policy reform programme, intervention prices, or subsidies, were cut by 50% from 298.35 euros per tonne to 150 euros, with import tariffs to be adjusted accordingly.
The rice import tariffs are to take effect on Sept 1.
India and Pakistan have already agreed on a proposed tariff rate with the EU, but Thailand has extended negotiations through three rounds on the issue.
Mrs Apiradi said the tariff issue was separate from the EU's existing quota system allowing duty-free rice imports.
"The rice import tariffs under negotiation have nothing to do with the existing duty-free quota system that the EU granted Thailand to offset losses when the EU expanded to 15 countries from 12 in 1995."
Thailand is allowed to export 21,455 tonnes of white rice, 1,812 tonnes of brown rice and 41,600 tonnes of broken rice duty free under the quota scheme.
In 2003, the EU imported a total of 167,552 tonnes of white rice, with Thai rice accounting for 72,127 tonnes or 43.05% of the total imports. The EU's husked rice imports totalled 717,037 tonnes last year, with shipments from Thailand totalling 60,143 tonnes, or 8.39%. India , Pakistan and the US were the top three rice exporters to the EU.
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