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UPDATE 2-S.Korea sets rice import tariff at 513 pct from 2015
September 18, 2014 / 4:17 AM / 3 years ago

UPDATE 2-S.Korea sets rice import tariff at 513 pct from 2015

* Seoul is scrapping import quotas but wants to protect farmers

* Will inform WTO by end-Sept; WTO to review from Oct

* Import tariff above 500 pct had been expected

* 513 pct tariff will apply to imports above 409,000 tonnes (Adds agriculture minister’s quotes and farmers’ reaction)

By Meeyoung Cho

SEOUL, Sept 18 (Reuters) - South Korea has set a rice import tariff at 513 percent from next year as it looks to protect farmers after scrapping a cap on politically sensitive imports of the grain in line with international trade commitments.

The World Trade Organization (WTO) will be officially informed of the level by the end of this month and will start a review of the tariff in October, the agriculture, trade and finance ministries said in a joint statement on Thursday.

Imports of 409,000 tonnes a year - the amount shipped in under a WTO quota agreement that ends this year - would attract a tariff of 5 percent, the statement said, and the 513 percent would apply to shipments above that level.

Farmers groups had called for a tariff of at least 400 percent and local media had reported it would be at least 500 percent.

“The tariff to be informed to the WTO has been decided at 513 percent, the highest level possible within the ranges in a WTO agriculture agreement to protect the domestic rice industry,” Agriculture Minister Lee Dong-phil said in a televised briefing.

Earlier, about 10 people from farmers’ groups had briefly disrupted a meeting between the government and the ruling party over the import tariff, saying the government was opening up the rice market without any preparation.

The Korean Peasants League criticised the decision in a statement, saying it was made without consulting opposition parties and members of a rice industry development committee.

But not all farmers’ groups disagreed with the scheme. Son Jae-beom, secretary general of the Korean Advanced Farmers Federation, said: “Switching to the tariff scheme is unavoidable. We think protecting the industry by imposing this appropriate level of 513 percent is more what is needed.”

Son, however, also thought the government should have made more effort to support farmers by raising subsidies.

South Korea is broadly self-sufficient as regards rice but, under the current WTO agreement, it must buy 408,700 tonnes of foreign rice this year, 9 percent of its demand. The amount that must be purchased abroad has gradually increased from 51,000 tonnes in 1995.

Under the new scheme, Seoul would still be required to import at least 408,700 tonnes a year.

U.S. and Chinese rice exporters have been waiting for the Korean government’s decision on grain import tariffs since Seoul said in July it would scrap caps on rice imports from 2015. The 20-year-old quota agreement with the WTO expires at the end of this year.

Although the decision potentially opens up the market to more imports, Seoul has said all along that steep tariffs would be used to protect its farmers.

A free trade agreement between South Korea and the United States took effect on March 15 last year. Seoul has been in talks with China on a similar deal and also wants to join the U.S.-led Trans-Pacific Partnership trade pact.

The tariff level would not be amended as part of any free trade deals with other countries, the joint statement said. (Reporting by Meeyoung Cho; Additional reporting by Chris Lee; Editing by Richard Pullin and Alan Raybould)

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