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EU farmers association reacts to likely duty-free rice imports from Vietnam under bilateral FTA

JPEG - 66.3 kb | 24 Jul 2015

EU farmers association reacts to likely duty-free rice imports from Vietnam under bilateral FTA

As negations between the European Union and Vietnam regarding the EU-Vietnam Bilateral Free Trade Agreement (EU-V BFTA) are in their final stages, the European association of EU farmers unions and cooperatives (Copa-Cogeca) has expressed concern about the future of the EU rice growing sector.

The EU may import about 76,000 tons of rice, mostly husked and milled, from Vietnam at zero percent duty if the EU-V BFTA goes ahead. The Secretary General of Copa-Cogeca is reportedly sending a document highlighting all the concerns regarding the EU rice sector in the light of increasing duty free imports from Asian countries to the Directorate General (DG) Trade and DG Agriculture.

In the document, the Copa-Cogeca Secretary General noted that already increasing rice imports from Cambodia (about 22% of EU rice imports) and Myanmar (about 3% of EU rice imports) in the past three years have led to a decline of about 40% in the EU indica rice acreage to around 96,000 hectares from around 156,000 hectares. He warned that if the zero-duty rice imports continue at this pace, there is a danger that the cultivation of Indica rice in Europe will disappear entirely by 2020.

The Copa-Cogeca official noted that inclusion of Vietnam rice will further deteriorate the EU rice situation as Vietnam FOB prices are the lowest in the South East Asia region and at zero percent duty, they would be even more competitive and may directly compete with European local indica varieties.

He also noted that the EU’s ongoing FTA negotiations with India (which already accounts for 24% of EU rice imports), Thailand (which accounts for 18% of EU imports) and the U.S. (which accounts for 4% of EU imports) despite granting all the tariff rate quotas (TRQs) to the third world countries are likely to lead to an unrecoverable crisis in the EU rice sector.

He reiterated that the EU’s stance to decouple specific support for rice production since 2012 has put the position of European rice producers in even more vulnerable position. He also noted that continuation of rice production in the delta area of the EU is most important to maintain biodiversity in the region.

The official urged the EU not to grant further duty free TRQ for rice to any other country after the EU-Vietnam FTA. He also stressed on the inclusion of a strict safeguard clause mechanism in the same FTA in order to avoid any future crises in the EU rice sector.