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WTO decision helps level the playing field for market access for rice in Turkey

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Washington, DC
September 24, 2007

A World Trade Organization (WTO) dispute settlement panel decision agreeing that Turkey’s failure to grant licenses to import rice and its operation of a discretionary import licensing system for rice are in breach of Turkey’s market access obligations under the WTO Agreement on Agriculture will help to level the playing field in trade with Turkey, USA Rice Federation Chairman Al Montna said today.

“This finding should result in fair and greater access for U.S. rice to Turkey’s rice market,” Montna said. “It is also good news for the industry, but it is equally a victory to Turkish consumers and importers.”

The panel also agreed with the United States that Turkey’s domestic purchase requirement, under which Turkey requires importers of rice to purchase large quantities of domestic rice in order to import rice at preferential tariff rates, is in breach of WTO national treatment provisions, according to a news release issue Friday by U.S. Trade Representative (USTR) Susan C. Schwab’s office. “I am extremely pleased with today’s panel report,” Schwab said.

“The U.S. Rice Industry is very thankful for the diligent work by U.S. Trade Representative Schwab and Acting U.S. Department of Agriculture Secretary Chuck Connor and their staffs to help bring this matter to a successful conclusion,” Montna said.

The “finding by the World Trade Organization in favor of the United States in the Turkey rice dispute is great news for American rice producers,” Connor said Friday. “Turkey is a key market for U.S. rice and we felt strongly that Turkey’s system for granting import licenses violated the country’s international trade commitments. These unfair trade barriers had a significant effect on U.S. rice exports to Turkey —causing them to drop 74-percent from 2005 to 2006, from almost $34 million to $9 million.”

“It is gratifying to see industry and government efforts result in a positive outcome. We look forward to working in cooperation with Turkey to implement the WTO Panel finding and to resume our mutually beneficial trade relationship,” Connor said.

The USTR news release provides background on the dispute. “The [United States] argued that U.S. rice exporters face serious market access restrictions in Turkey resulting from its import licensing system for rice. By instituting a discretionary import licensing system and making the receipt of import licenses contingent upon the purchase of domestic rice, The WTO panel found Turkey has acted inconsistently with several WTO covered agreements, including the Agreement on Trade Related Investment Measures (TRIMS), Articles III and XI of the GATT 1994, the Agreement on Import Licensing Procedures, and the Agreement on Agriculture.

“Turkey imposes a tariff-rate quota (TRQ) for rice. The most recent TRQ opening governed the period November 1, 2005, to July 31, 2006. Under that opening, Turkish regulations permitted the importation of 300,000 metric tons of milled rice equivalent at preferential tariff levels below Turkey’s 45 percent bound rate. In order to obtain a license to import at these levels, however, the regulations required that importers purchase significant quantities of domestic rice from the Turkish Grain Board or Turkish producers. Further, importers not wishing to make these purchases cannot import at the bound rate because Turkey’s Ministry of Agriculture (MARA) fails to grant import licenses for imports outside the TRQ. While Turkey has not re-opened the TRQ since July 2006, it has imposed minimum import prices for rice that are enforced by Turkish Customs.

“The United States requested formal WTO consultations with Turkey on November 2, 2005. Consultations were held in Geneva on December 1, 2005, but failed to resolve the dispute. The WTO established the dispute settlement panel on March 17, 2006. The United States and Turkey each have an opportunity to appeal [Friday’s] report.”

The USA Rice Federation is the global advocate for all segments of the U.S. rice industry with a mission to promote and protect the interests of producers, millers, merchants and allied businesses.

 

 

 

 

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