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Opening S. Korea's rice market
Publication Date : 21-07-2014
South Korea has decided to open its rice market next year, inviting strong opposition from special interests representing farmers. Now the question is how high a tariff it can impose on rice imports to protect the embattled domestic rice growers.
In the past, Korea has tried to protect the domestic market by limiting imports to the minimum level permitted under the Uruguay Round of trade negotiations. The minimum market access, which is set to increase incrementally in the coming years, has now reached 410,000 tonnes for this year, or 9 per cent of its needs.
It is a matter of time until Korea opens up its market and begins to import at the tariff rate it successfully negotiates with rice-exporting countries.
The Korean government expects the tariff to be somewhere between 300 per cent and 500 per cent. It also promises additional protection against an upsurge in imports in the form of a special safeguard.
Militant farmer groups vow to fight the government’s decision to the end. But they will have to realize that keeping minimum market access to restrict rice imports is not a viable option for Korea, which will have to push for freer trade as a nation poor in natural resources.
The main opposition party proposed to the ruling party that the issue be dealt with in a four-party forum involving government and farming representatives.
Given that few trade issues are as sensitive as the liberalization of rice imports, the government should have started talks long ago, either with farmer representatives alone or at a four-party forum as suggested by the opposition party. It is truly regrettable that the government has been sitting on the issue, instead of making efforts to produce a general consensus.
The government’s decision to impose no nontariff barriers on rice imports demands an overhaul of its agricultural policy. Its review will have to include whether or not to encourage corporate farming and how much to spend to make domestic agriculture competitive against imports.
The government will also have to learn from Japan and other countries that abandoned minimum market access long ago. It may take heart from the fact that liberalized rice imports in those countries dealt no insurmountable damage to their farmers.