For Countries Seeking Access to Korea’s Rice Market, Stakes Are High

The first round of bilateral negotiations with nine rice exporters participating in rice renegotiation talks finished with the “Korea-Canada” and “Korea-Argentina”’ negotiations held in Geneva, Switzerland on June 3.

At the first-round talks, which had a “get-acquainted” type of atmosphere, detailed conditions were not presented. However, fierce attempts to grasp other countries’ intentions were undertaken. Differences in the negotiation strategies could be seen among the countries seeking access to the Korean rice market.

--Rice exporters: “In the same bed, but with different dreams”

The bargaining chips of the rice exporters that were revealed at the first-round talks can be divided into three types. A “quantity expanding with minimum market access (MMA) type” in which Korea is under the obligation to import, a “market opening through tariffs (liberalizing the importation of agricultural products but controlling the volume of imports through tariffs) type,” and a “compensation type.”

The U.S. is representative of the “quantity expanding with MMA type.” In the first round of negotiations, the United States demanded direct market access without any mention of tariffs. This position is interpreted as a request to expand MMA quantity to sell at household sizes in exchange for the “present” of “extending the tariff grace period” to Korea, since price competitiveness for U.S. rice falls back from the Chinese rice.

Australia also emphasized a “long-term and stabilized market advance” in its first round talks, and so is observed as to have similar thoughts as the U.S.

However, China and Thailand are setting forth market opening through tariffs.

The two countries each mentioned “realizing mutual profit” and “qualitative improvement in market access” while stressing trade liberalization, the basic principles of the WTO, and tariffs as the basic principle for agricultural negotiations. It seems that these countries have given indirect intentions of opening the market through tariffs since they have price competitiveness compared to the U.S or Australia.

The other five countries, Canada, Argentina, Pakistan, India and Egypt, seem to be playing the “compensation card,” in which beef, barley, corn and other agricultural products are exported rather than rice. These countries either do not produce rice at all or produce the short single-grain (Japonica) type of rice that Koreans like.

--The schedule for the second round of rice talks and government countermeasures

The second round of talks are to start in the middle of this month. While the first round of talks ended smoothly with an exchange of each country’s opinions and bargaining positions, the second round is expected to have difficulties because detailed demands will be mentioned.

Since the government is concerned with the economic well-being of domestic farmers in regards to a rice tariff on the premise that the market opens up, it will negotiate to extend the grace period. However, the government does not intend to pursue a grace-period extension to the point of lost utility.

Jin-Hup Song jinhup@donga.com