* Current WTO agreement over rice import quotas expires
* WTO wants S.Korea to further open up rice mkt under a new
* Seoul understood to be mulling proposing higher quotas
* Or could propose charging high import duty
* Farmers oppose all changes, want to keep status quo
By Meeyoung Cho
SEOUL, April 3 South Korea should shift away
from a quota system on rice imports to ease pressure from the
World Trade Organisation (WTO) to open its markets for the
grain, agricultural industry and government officials in the
country said on Thursday.
Although they suggested switching to a system of high
tariffs that would still curb shipments into the country,
removing caps would mark a key psychological shift in a
politically-sensitive sector and could potentially pave the way
for lower duty in future.
Rice exporters in countries including China and the United
States have been closely watching South Korea's import policy,
hoping to ship more grain to Asia's fourth-largest economy.
"We should have switched to a tariff scheme 10 years ago," a
senior government source with direct knowledge of the matter
said on the sidelines of a hearing on the issue, adding that
this would be cheaper for the country in the long term.
A 20-year-old agreement with the WTO has seen South Korea
gradually increasing import quotas for the national staple to
408,700 tonnes this year. Under the system, the country must
import exactly the amount specified in the annual quota.
But the international trade group is looking to boost South
Korean purchases under a new deal set to be negotiated from
The Northeast Asian country is understood to be considering
either proposing at least doubling import quotas gradually or
suggesting a system of high tariffs on imports after obligatory
purchases of 408,700 tonnes had been made each year.
At the hearing, most industry officials said the latter
would result in lower imports than increasing quotas, but others
argue tariffs would eventually fall due to upcoming free trade
The duty amount would be a steep 300-500 percent, but
proponents said this would bring prices for imported rice in
line with the local grain. They said that level should also be
acceptable under WTO rules.
China has typically accounted for 50-60 percent of South
Korea's total rice imports, the United States for 20-30 percent
and Thailand for 10-20 percent, according to government data.
Of the 159 WTO members, only South Korea and the Philippines
have quota systems for rice imports, while others use tariffs.
South Korea aims to produce 4.15 million tonnes of rice this
But farmers in the country, who have a history of street
protests, argue that both proposals should be binned, demanding
that the government fight to keep the current quota system.
"While maintaining the current import policy, the government
should help increase local rice production and guarantee
production costs for local farmers," said Kim Young-ho,
president of the Korean Peasants League, a farmers' group.
Another participant at the conference said: "We already
depend heavily on grain majors such as Monsanto and Cargill for
corn and soybean imports. If they say they will not provide rice
later, we would have to beg for our main staple."
(Reporting by Meeyoung Cho; Editing by Joseph Radford)