South Korea on Edge Over Possible Rice Market Liberalization

Strategic Insights -

As the World Trade Organization (WTO) drafts an agreement to cut agricultural tariffs, South Korea is facing pressure to liberalize its rice market, a move that could lead to cheaper imported rice flooding the domestic market and threatening the livelihoods of local farmers. The country's agricultural officials are concerned that a full liberalization of the rice market could lead to imported rice being sold at half the price of domestically produced rice. China and Thailand, the world's largest rice producer and exporter respectively, are advocating for a tariff system, while the United States and Australia are pushing for an increase in the import quota.

Key Takeaways:

  • The WTO's draft agreement proposes a framework for cutting agricultural tariffs, including a system that would reduce high import tariffs by a larger percentage than low ones.
  • South Korea is facing pressure to liberalize its rice market, with the country's agricultural officials warning that imported rice could be sold at half the price of domestically produced rice.
  • China and Thailand are advocating for a tariff system, citing the significant price difference between their rice and South Korea's domestically produced rice.
  • The United States and Australia are pushing for an increase in the import quota, seeking a substantial and stable opening of the market.
  • Talks between the WTO member states have been ongoing since November 2001, with the goal of reaching framework agreements on agricultural issues by the end of July.
  • The Doha Development Agenda (DDA) negotiations aim to conclude by the end of the year, but have been on hold since the collapse of a ministerial meeting in Cancun, Mexico, in September 2003.
  • South Korea has the option to maintain its right to bar most imports of rice, raise its import quota, or shift to a tariff system.

Statistics:

  • The WTO's proposed framework for cutting agricultural tariffs would reduce high import tariffs by a larger percentage than low ones [1].
  • China's rice prices are about five times lower than South Korea's domestically produced rice, according to analysts [1].
  • The import quota for rice in South Korea is currently set at 4 per cent of domestic consumption [1].
  • The Doha Development Agenda (DDA) negotiations aim to conclude by the end of 2004 [2].
  • The talks on market access for farm products have been ongoing since November 2001 [3].

Sources:

[1] Asia Pulse

[2] Yonhap

[3] WTO (World Trade Organization) website.