December 4, 2003	Thursday	Shawwal 9, 1424

ISLAMABAD, Dec 3: Pakistan has formally asked European Commission (EC) to seek Islamabad’s opinion before modifying its current rice import regime with a view to establishing a system of tariff rate quotas (TRQs).

Informed sources told Dawn on Wednesday that any such re-negotiation of EU market access conditions for rice was likely to result in problems for Pakistan and other rice exporting countries.

It was also expected that the move might result in adversely affecting the duty abatement currently permitted for import of certain varieties of Basmati rice.

According to the sources, the demand was made during the recent visit of Commerce Minister Humayun Akhtar Khan to Brussels during which he asked EC Trade Commissioner Pascal Lamay to seek Pakistan’s opinion before making any changes in the rice import regime.

Under the GATT article XXVIII, it was the obligation of the EU before making any changes to its commitments to WTO, it would go for negotiations with the member countries expected to be affected by the changes so that compensatory concessions might be given to them.

According to the proposed TRQs system, a quantity is earmarked for import against a particular rate of duty and further import of quantity over and above it should be subjected to higher rates of duties.

These quotas could either be allocated to particular countries or might be open for all, said the sources.

Under the existing rice import regime, Pakistan and India are eligible for a duty reduction of 250 euros per ton in respect of exports of husked Basmati rice. In case of Pakistan, it is only husked super Basmati variety that is eligible for this reduction and Pakistan could export husked Basmati rice at a maximum duty of 14 euros per ton when the bound rate duty of 264 euros per ton is applicable.

Pakistan exports 50,000 to 60,000 tons of husked super Basmati rice annually under this scheme, said the officials.

The move would also affect the Pakistani exports to EU, said the sources adding any change in rice import regime might abolish the abatement scheme under which Pakistan is entitled to substantial reduction in import duties on husked, brown super basmati rice and that would essentially lead to application of the bound rates of duty making Pakistani rice expensive to EU consumers.

Pakistan would not be in a position to receive substantial quota quantities under the TRQ system. They further said that if TRQs was established on the basis of past performance the quantities so far exported by Pakistan to EU have not been significant and its historical market share being only 20 to 30 per cent.