WTO Rice Import Talks

Talks on rice imports will start in the near future, as Korea has recently notified the World Trade Organization that it is ready to negotiate with rice-exporting WTO members. But the Korean government will have to fight an uphill battle, not only against its negotiating partners, but also against domestic farmers' groups.

Korea has a choice between continuing to restrict rice imports through incremental minimum market access or removing this trade restriction to adopt tariffs and open markets. To the chagrin of combative farmers' groups, the nation is set to import more rice either way in the years ahead.

If it decides to uphold minimum market access, Korea will have to negotiate on how long this will be extended and to what level it will be raised during that period. Under the Uruguay Round of trade negotiations, concluded in 1994, rice exporters' minimum access to the Korean market has risen from the equivalent of 1 percent of domestic consumption in 1995 to 4 percent this year.

As an alternative to minimum market access, Korea may choose to liberalize rice imports. In that case, it is most likely to demand that import tariffs start at 380 percent to 400 percent and decline slowly over a long period of time. This should not be too high a demand because Japan and other rice-importing WTO members were allowed to convert to tariffs - liberalizing imports by removing all non-tariff trade barriers - under similar conditions.

Given that trade liberalization is a global trend, be it for rice or any other product, the Korean government should prefer tariffs to minimum market access. But it claims that it has made no formal decision as to which of the two methods it will propose when it starts negotiations with the United States, China, Thailand and other rice-exporting countries.

With farmers' groups voicing strong opposition to introducing tariffs, the Korean government is simply boxing clever when it apparently pretends to weigh one option against the other. It may have to pay close attention to farmers' demands for nothing less than a moderate increase in minimum market access - at least until the April 15 general elections - because the farmers wield greater voting power than is demographically warranted.

But the government needs to persuade the farmers that Korea will have to open up its domestic rice market if it is to generate growth through exports, as it has done in the past. Political parties and nongovernmental organizations should refrain from letting them fall into the illusion that the government can indefinitely afford to prop up domestic rice prices, which are four to five times higher than those in the world markets.

In addition, it should tell them that Korea will also have to lower tariffs on all other agricultural imports if the WTO negotiations on the Doha development agenda are concluded by the end of this year, as scheduled.

What needs to be done in this changing trade environment is to make domestic agricultural production competitive enough to put up a fight against imports. This should not be a mere dream because Japanese farmers set a precedent when they won consumer confidence by developing new strains and enhancing food security.

In this regard, the government should guard against backtracking from its earlier commitment to spend 119 trillion won on restructuring the agricultural sector during the next 10 years. Farmers deserve the administration's support more than any others, as they have been victimized during the nation's long process of industrialization.

As it promised, the government should assist efforts to turn family farming into industrial farming and upgrade the quality of livestock and dairy products. Agriculture, like other industries, needs an economy of scale if it is to survive fierce competition from abroad.