EU members fail to agree on rice tax, EC to make final call

Sok Chan and Sangeetha Amarthalingam / Khmer Times No Comments Share:
The EU did not reach a consensus on imposing tariffs on Cambodian rice. KT/Chor Sokunthea

The European Union has failed to come to a consensus on the decision of imposing tariffs on Cambodian rice import into the bloc after eight countries voted against slapping a regressive tax on Jasmine fragrant rice and white rice, with seven countries choosing to abstain.

Of the 28 member states, 13 nations including Italy and Spain, the alleged source of contention over the price imbalance and negative economic impact on its rice farmers that spurred the proposal, however voted in favour of European Commission (EC)’s proposal to activate the safeguard clause, enabling tariff imposition starting Jan 1, 2019.

Although unclear on the exact result, the bloc said in light of the non-opinion, it is up to the College of Commissioners to decide whether it will adopt the proposal of rice tax imposition of 175 euros per tonne in the first year, 150 euros in the second year, and 125 euros the following year.

“According to the Directorate-General of Agriculture and Rural Development, today’s (yesterday) vote may provoke some further discussion within the Commission but the assumption should still be that this proposal will be adopted,” it said in a statement.

The EC launched a safeguard investigation in March to see if the volume with or without prices of imports of semi-milled and milled Indica rice from Cambodia and Myanmar resulted in serious difficulties to EU producers of similar or competing products.

Based on the member states that voted on EC’s proposal to impose tariffs on Cambodian rice exports yesterday, Czech Republic, Denmark, Estonia, Finland, Luxembourg, Netherlands, Sweden, and United Kingdom opposed the move.

In contrast, Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Portugal, Poland, Romania, Slovakia and Spain opted to stay the proposal while Austria, Croatia, Germany, Lithuania, Luxembourg, Malta and Slovenia decided to remain neutral.

In the meantime, EC included a “shipping clause” stating that imports already on the way to EU on the date of entry into force of this regulation (Jan 1, 2019), provided that the destination of such products cannot be changed, shall not be subject to the duty specified in its law.

“The date of entry into force will be the day after the publication of the regulation. The timing of publication, for the time being, should be assumed to be as previously indicated, namely early January,” it added.

EU is Cambodia’s major rice importer with approximately 213,000 tonnes, followed by China at 127,000 tonnes, ASEAN member states (47,000 tonnes) and 48,000 tonnes to other destinations. In the first nine months of 2018, Cambodia exported 389,264 tonnes of rice, a drop of 8.4 percent year-on-year.

When asked, one of the largest rice exporters in the country, Amru Rice (Cambodia) Co Ltd chief executive officer and president Song Saran told Khmer Times that the final decision is now in the hands of the EC following the failure to gain a majority vote.

“This is exactly what we were informed (would happen). However, the commission has made it clear that it will decide in the event an uncertainty happens,” he said.

 

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