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China and South Korea are expected to launch another round of talks to seek a resolution to South Korea's rice import system.
The talks will focus on whether South Korea will open up its rice market according to World Trade Organization regulations. During the Uruguay round of WTO talks 10 years ago, South Korea was given a 10-year grace period to limit its rice imports to 4 percent of total domestic consumption. But this exemption expires at the end of this year.
Chinese officials are hopeful South Korea will gradually open its rice market, a move that will benefit both countries.
The two sides are wrangling over how much rice imports should be increased by and whether a tariff system should be adopted, according to a Ministry of Commerce official.
The official, who declined to be named, said China expects to increase its rice export quotas while South Korea can keep its current system to protect its farmers.
"The volume will not increase too much," said the official.
China currently exports about 100,000 tons of rice annually to South Korea.
China has had seven rounds of talks on the rice market since April, with the latest ones being held last Friday.
Both sides will have another round of talks after South Korea and the United States have their own rice talks tomorrow.
Seoul is currently holding talks with nine rice exporting countries including the United States, China and Thailand to decide how it will approach the liberalization of its rice market.
South Korea is required to reach a settlement that will either retain its import quota at the expense of more mandatory imports or adopt a tariff system from 2005.
If no deal is struck, the country will have to accept a tariff system that may run into opposition from South Korea's farmers.
Many exporter nations want to raise the quota to 8 percent, or 410,000 tons, in 10 years' time, while some want 8.9 percent, or 455,000 tons. The quota for this year is 4 percent or 205,000 tons.
The duration of the tariff waiver was a matter of dispute with some countries, which are opposed to giving South Korea the 10 years it wants.
Analysis by the China Rice Research Institute said rice grown in northern China enjoys a considerable advantage over its rivals in South Korea in terms of quality and price.
Chinese rice trades at US$410 per ton, or 36,000 won (US$33.3) per a 80-kilogram sack in South Korea. This is far lower than the 170,000 won (US$159.17) for the same amount of locally-produced rice.
But the analysis said China is unlikely to export much more rice which may lead to short supply on the domestic market.
China's total rice output has been declining since 1999, and China needs to control its exports in order to ensure food security, the analysis said.
China exported less rice while importing more in recent years. In the first half of this year, China exported 745,000 tons of rice, a fall of 35 percent year-on-year.
And imports totaled 376,000 tons, surging by 110 percent.
China now is running up a huge trade deficit with South Korea, which stood at US$26.3 billion in the first three quarters of this year and US$23 billion in 2003.
At the same time, at least 15,000 South Korean farmers clashed with riot police during a protest against the government's plan to further ease restrictions on rice imports in Seoul on November 19.
(China Daily November 23, 2004)
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