U.S., EU Resolve Dispute Over EU Restrictions on U.S. Rice (U.S. Will Not Raise Duty Rates)
The Office of the U.S. Trade Representative (USTR) has issued a press release announcing that on February 28, 2005, the U.S. reached an agreement with the European Union (EU) ensuring market access for U.S. brown (husked) rice exports to the EU.
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(In September 2004, the EU unilaterally decided 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 its Uruguay Round obligations.)
U.S. No Longer Intends to Raise Certain "Column 1" Duty Rates Effective 03/01/05
In light of this agreement, the U.S. no longer intends to increase duty rates on certain goods from all "column 1" countries, effective March 1, 2005, in order to compensate the U.S. for the higher EU brown rice tariff.
(See ITT's Online Archives or 02/01/05 and 02/02/05 news, 05020105 and 05020210, for BP summaries of the U.S.' intent to raise duties on certain products (yogurt, processed cheese, olives, etc.) prior to this agreement.)
U.S., EU Agreement Contains Applied Tariff Adjustment Mechanism
The USTR explains that this agreement contains an applied tariff adjustment mechanism which provides that if EU imports of brown rice, excluding basmati rice, fall below a certain reference level, the applied tariff will automatically be lowered to 30 euros per metric ton. If there is little change in trade, the applied tariff will be set at 42.5 euros per metric ton. The USTR notes that the adjustment mechanism also allows the EU tariff to return to the bound rate of 65 euros per metric ton if imports substantially increase. This adjustment mechanism will be applied starting March 1, 2005.
USTR Press Release (dated 02/28/05) available at http://www.ustr.gov/Document_Library/Press_Releases/2005/February/United_States_Europe_Reach_Agreement_on_U.S._Rice_Exports_Exping_U.S._Access_to_European_Markets.html