Seoul to open rice market

By Korea Herald

Market liberalization to start in January with heavy tariffs

  • Published : Jul 18, 2014 - 20:49
  • Updated : Jul 18, 2014 - 20:49
The South Korean government will officially open up the domestic rice market, but with heavy tariffs in order to protect the local rice industry.

The Ministry of Agriculture, Food and Rural Affairs on Friday announced that it will be liberalizing the rice market, starting from January next year. The related procedures will kick off in September.

“We have reached the conclusion that tariffs are not only an inevitable, but also the optimal way to protect the future of the South Korean rice industry,” said Minister Lee Dong-phil at a press conference at the Central Government Complex in Seoul.

Within the limits of the World Trade Organization regulations, the ministry plans to impose the highest tariff rate possible on imported rice, he added.

Opening up the rice market has long been a pending issue for Korea, which stands at a crossroads as it is torn between protecting the country’s agricultural industry and adopting global trade standards.

If South Korea were to postpone its market opening once more, its compulsory rice import quota would soar from 409,000 tons this year to 820,000 tons or more in 2015 based on a related WTO agreement.

“Although imports will soar, the imported rice will be charged with extra tariffs, so there will effectively be no price changes in the market concerning the consumers,” the minister said.

The average tariff rate is expected to range between 300 percent and 500 percent.

“We will also be sure to include an explicit statement on special safeguards (for our markets) when submitting our plan to the WTO,” said Lee Jun-won, assistant vice minister.

The corresponding clause would allow the government to impose an additional tariff on imported goods whenever it detects an excessive amount of imports in the market.

Also, in order to prevent further market encroachment from abroad, the ministry pledged to exclude the rice sector from all international trade pact negotiations, such as the Korea-China bilateral Free Trade Agreement and the multilateral U.S.-led Trans-Pacific Partnership roundtables, the minister said.

“(Once the rice market is liberalized once and for all) rice will be excluded from further tariff concession, even if the TPP is concluded.”

The local agricultural industry, however, has mainly refused to accept the government’s logic and continued to protest.

Farmers’ unions have been gathering at the Government Complex to hold all-night rallies, rebuking the ministry for enforcing the tariffication without sufficient communication.

The Korea Advanced Farmers Federation, on the other hand, agreed to the market opening policy but pushed the government to guarantee protective measures, including an import tariff rate of 400 percent or more.

By Bae Hyun-jung (