This week the EU announced a plan to “safeguard” its southern rice-producing nations by imposing tariffs on Cambodia and Myanmar to hold rising imports in check. Under the EU’s so-called Everything But Arms program, which allows developing nations to export to the EU duty free, Myanmar and Cambodia have enjoyed an economically favorable position within the European rice market that has fostered disdain among EU producers. EU producers’ share of the domestic rice market more than halved over the past five years, dropping from 61 percent to 29 percent. Rice is grown in Italy, Spain, Greece, Portugal, and other countries.
Beginning Jan. 18, the EU will slap a 175-euro per tonne tariff on rice imports from both Cambodia and Myanmar. The planned tariffs will be gradually reduced by 25 euros per tonne in the subsequent two years. The move comes at a rocky time for both Southeast Asian countries as reports of human rights violations threaten their relationships with foreign customers and puts them in jeopardy of other economic sanctions.
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Rice exports from Myanmar (blue line on left chart) and Cambodia (green line) have risen sharply over the past 15 years. The chart on the right illustrates EU rice production (green bars) and imports (blue bars) over the same time period. Rice imports have nearly matched domestic production over the past couple of years, and new EU tariffs are aimed at giving a leg up to European producers.