Positive sign in EU rice tariff saga

06 Dec 2018 2120 | Business & Trade Fairs

The European Union yesterday failed to come to a consensus on taxing Cambodia fragrant and white rice, giving leaders of the local rice sector more time to plan the next step in their fight to stop the EU from imposing tariffs.

Yesterday’s vote, hailed as a positive sign for Cambodia, failed to deliver a decision on the regressive rice tariff imposition that is expected to start from Jan 1 next year, with 15 of 28 member states either rejecting the proposal or abstaining from the vote.

13 nations voted in favour of the activation of the clause that would enable the tariffs, including Spain and Italy, the countries that allegedly prompted a revision of the rice trade with Cambodia when they complained of price imbalances impacting their rice farmers.

The European Commission (EC)’s Directorate-General of Agriculture and Rural Development noted that the vote might provoke some further discussion within the Commission but “the assumption should still be that this proposal will be adopted”.

As a result, EC has been tasked with making a final decision before the January deadline. The tax imposition amounts to 175 euros per tonne in the first year, 150 euros in the second year, and 125 euros the following year.

But this uncertainty means that Cambodia gets more time to continue lobbying the EU, said Cambodia Rice Federation (CRF) vice president Hun Lak.

“We will work with the Ministry of Commerce and other relevant stakeholders to lobby our case because it is not clear now,” he told Khmer Times over the telephone.

“It was a positive result as the vote to impose tariffs on Cambodia rice exports did not win a majority, with some countries against the proposal. The countries that rejected it obviously feel that there will be an impact on the livelihood of the farmers.

“It would also impact EU’s effort to alleviate poverty in least developed, and developing countries. In addition, the tariffs would affect EU importers and its own consumers,” he added.

The EC launched a safeguard investigation in March to see if the volume with or without prices of imports of semi-milled and milled Indica rice from Cambodia and Myanmar resulted in serious difficulties to EU producers of similar or competing products.

Czech Republic, Denmark, Estonia, Finland, Luxembourg, Netherlands, Sweden and the United Kingdom voted against the proposal.