Guyana and Suriname rice may face price reductions on European market

The Ministry of Foreign Trade and International Cooperation said there is a possibility that Guyana and Suriname could face price reductions for their rice on the European market if a proposal to treat rice as a tropical product is adopted by the World Trade Organisation (WTO).

Minister Dr Henry Jeffrey has engaged his Suriname counterpart and has also written to the European Trade Commissioner Peter Mandelson on the issue.

Guyana currently enjoys duty-free quota access to the European Union rice market and with the EU being Guyana’s largest importer of rice, the WTO proposal will result in the EU having to reduce its third country most favoured nation (MFN) tariff on rice in the current Doha round.

“The preferential access that has just been secured and even improved through the Economic Partnership Agree-ment (EPA) would then be of much less value to Guyana,” the statement from the Ministry of Foreign Trade said.

The treatment of rice as a tropical product would result in even higher tariff reductions for that product – up to 85 per cent – than for most other agriculture products and would thereby seriously erode the preferential margin that Guyana has in the EU market.

“Such a steep reduction in the tariff for third countries could substantially reduce the price that Guyanese rice exporters receive in the EU market. Estimates are that the price could go down by as far as US$100 per tonne. Guyana’s capability to compete against other exporters – which often heavily subsidize their rice production – would be constrained significantly,” the statement said.

The proposal also negates the benefits to be derived from the EPA. It would also make it more difficult for Guyana to start exporting milled rice, for which this country will soon enjoy duty-free and quota-free access through the EPA and profits from a substantial preferential margin compared with other exporters, such as the USA, said the statement.

The ministry said that following Jeffrey’s intervention, the ACP Council of Ministers, in its resolution adopted at the meeting, mandated: “The chairpersons of the various ACP working groups on commodities, in their participation at the various consultations to be organised in Geneva in June/July to ensure that ACP concerns relating, inter alia, rice, sugar, bananas, are fully taken on board.”

The ministry said it continues to collaborate with all stakeholders, including the Guyana Rice Development Board (GRDB), the Caribbean Regional Negotiating Machinery and the Guyana Embassy in Brussels in an effort to lobby support on the issue.

The release said Guyana is actively supporting the Doha round, but it has to be ensured that the outcome will be balanced and will not be biased against the interests of small, vulnerable economies that heavily rely on preferential market access for their key export products. “Only then can it be ensured that [the] Doha round will be a true development round,” the release said.

In a statement to the ACP Council of Ministers issued at Addis Ababa, Ethiopia this month it was recommended that all relevant rice tariff headings should be included on the list of preference related products, that rice should not be treated as a “tropical product” regardless of whether or not it continues to be stated on the tropical products list. The ACP explained that this is possible if it is transferred to the “Annex X” of the WTO process, which allows for case-by-case treatment.

“We support a modality that would have the effect of delaying the commencement of tariff reduction by the EU for a reasonable period. The proposal in the current text for a ten-year moratorium and an additional five-year implementation period appears reasonable,” the ACP said.