International Trade Law News

Yesterday, the U.S. filed a complaint against Turkey at the World Trade Organization (WTO) challenging Turkey's tariff-rate quota on imported rice.

According to the complaint filed by the U.S. Trade Representative, Turkey has imposed a domestic purchase requirement allowing limited imports of rice at reduced duty rates, but only if an importer also purchases significant quantities of domestic rice. Specifically, Turkey permits the importation of 300,000 metric tons of milled rice equivalent at preferential tariff levels (20 percent for paddy rice, 25 percent for brown rice, and 43 percent for milled rice) below the over quota rate of 45 percent, provided that importers purchase significant quantities of domestic rice from the Turkish Grain Board or Turkish producers or producer associations. The amount of domestic rice that must be purchased varies according to the type of rice being imported and the source of the domestic rice. Turkey does not permit the import of rice at the over-quota rate. Thus, when the domestic purchase requirement is not in effect, such as during the Turkish rice harvest, no imports are permitted. As a result of these restrictions, the U.S. contends that Turkish imports of U.S. rice of all types have declined dramatically over the past three years.

The U.S. contends that the domestic purchase requirement is inconsistent with several WTO agreements, including the Agreement on Trade-Related Investment Measures, the General Agreement on Tariffs and Trade 1994, the Agreement on Agriculture and the Agreement on Import Licensing Procedures.

Under WTO procedures, the U.S. and Turkey will enter into consultations. If the parties do not resolve the issue through consultations, they may refer the matter to a WTO dispute settlement panel.