Although Costa Rica temporarily dropped out of the negotiations, bilateral arrangements with Guatemala, El Salvador, Nicaragua and Honduras indicate that sufficient safeguards are in place to maintain the second largest U.S. long grain market, they note, making CAFTA a “win-win situation” for the entire rice industry.
“We and our Central American partners have worked diligently for years to build this market from practically nothing to the second largest long grain customer for the US industry,” said USRPA Chairman Chris Williams.
“We are delighted that what took years of promotional efforts to build can be maintained because the negotiators on both sides had the foresight to develop an agreement that preserves this good trade relationship.”
When CAFTA is approved and ratified by the United States and Central American governments, Tariff Rate Quotas or TRQs, will insure that a minimum of 293,000 metric tons U.S. rough and 39,000 tons of U.S. milled rice will be imported duty-free, Williams said.
Central America will have the right to fill the remainder of its import requirements (an estimated 200,000 tons annually) with whatever form it desires. Historically, these additional import requirements have been met with US rough rice. TRQs will grow over time further insuring the United States of a growing share of this market, he said.
Tariffs on rice imported outside TRQs will remain in effect for 10 years and then be phased out over time.
“This grace period will allow the market to make any necessary adjustments,” said Williams. “Central American producers have been supportive of filling their import needs with U.S. rough rice and promoting sales jointly with U.S. producers and marketers. Central American rice producers will be protected by the continuation of existing local policies that require marketers to purchase available local supplies as a condition for importing.
“Having lost other good markets to geo-political events, USRPA has been diligent in their efforts to preserve this market,” International Programs Committee Chairman Penn Owen said. “To that end, they have participated in all Rounds of the CAFTA negotiations. We were anxious to mediate any differences between our industry and theirs. This meant telling our negotiators from the beginning that keeping our customers was our main concern.”