USA Rice Federation members and rice-state members of Congress have been urging the Bush administration to counter Mexico’s anti-dumping duties. Federation representatives said bilateral talks last month between the two countries failed to address U.S. concerns.
“This step is very good news for the U.S. rice industry,” said USA Rice Federation chairman Gary Sebree. “It emphasizes the fact our government leaders believe we have a legitimate case that has a good chance of winning.”
Sebree praised the work of U.S. Trade Ambassador Robert Zoellick and the USTR’s chief agriculture negotiator, Ambassador Allen Johnson.
“They’ve been working hard on the resolution of this issue, and we’ll support them in any way we can,” Sebree said. “These duties violate WTO rules and obviously go against the spirit of the NAFTA agreement.”
The settlement panel could be formed as early as December, and the two countries will submit briefs shortly after the panel is formed. It will likely be mid-2004 before the panel renders a decision, Sebree said. Mexico is the number one export market for U.S. rice. Sales for the first seven months of 2003 totaled 485,000 metric tons.
The Senate Finance Committee, meanwhile, held a hearing on "Unfulfilled Promises: Mexican Barriers to U.S. Agricultural Exports" that included testimony from Travis Satterfield, a rice producer from Benoit, Miss., for the Delta Council of Mississippi, the USA Rice Federation, and the U.S. Rice Producers Association.
"It is important for us to point out that Mexico's decision to impose punitive anti-dumping duties on certain imports of milled rice from the United States is a serious blow which threatens to erode the full benefits of NAFTA to U.S. rice producers, millers and exporters," Satterfield told the committee.
Satterfield, who serves as chairman of the Delta Council Rice Committee, was asked to appear before the committee by Sen. Trent Lott, R-Miss., and a senate Finance Committee member.
According to Satterfield, Mexico has become the largest importer of U.S. rice, with U.S. sales accounting for 92 percent of Mexico’s rice imports. A total of 730,000 metric tons of U.S. rice was exported to Mexico in 2002.
“Since NAFTA agreements and obligations lifted import duties on all rice from the United States on Jan. 1, 2003, there has been great anticipation that the Mexican rice market would grow even more in years to come,” Satterfield said.
“However, almost simultaneous with the duties on U.S. rice being ended earlier this year, the Mexican Ministry of the Economy has imposed an anti-dumping duty on U.S. milled rice which we believe to be counter to any trade policies which have previously been agreed to between the two countries.”
The Mexican Ministry of the Economy imposed an anti-dumping duty of 10.18 percent on imports of long-grain white rice and other rice mixtures in January of 2003, only weeks after import duties on all rice from the United States to Mexico were lifted under the terms of NAFTA.
Although the anti-dumping action is restricted to milled rice only, as a component of total U.S. rice exports, the U.S. rice industry has expressed a concern that a pattern may be developing which would suggest that North American Free Trade Agreement partners might not choose to enforce the principles and obligations under the previously-ratified treaty.
The U.S. rice industry, according to Satterfield’s testimony, will continue legal action in the form of appeals to the Mexican Ministry of Economics. Also, Satterfield urged the Congress and the Administration to take the steps toward filing a dispute settlement case with Mexico in the WTO.
“Agricultural trade, and especially the U.S. rice export trade with Mexico is vitally important to the U.S. rice farmer and the entire industry, but if we allow Mexico’s recent actions to impose punitive anti-dumping duties on long-grain milled rice from the United States go unchallenged, this action could undermine the integrity of the WTO agreement and create uncertainty throughout U.S. agriculture as it pertains to future trade agreements,” he noted.