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Tariff-free through EU loophole?

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An Oxfam volunteer cuts rice plants at a field in Preah Vihear province on December 12, 2017. Heng Chivoan

Tariff-free through EU loophole?

Cambodians may be able to market rice in the EU tariff-free if they sell the semi-processed grain to European millers instead of finished products to end consumers, as the former is still subject to a zero tax rate, said an exporter.

The EU imposed tariffs on rice imported from Cambodia and Myanmar, effective last Friday. Prior to requiring the Kingdom to pay customs tax, the majority of its rice exports were in the form of finished products ready for retail to end-consumers.

Amru Rice (Cambodia) Co Ltd chairman and CEO Song Saran said on his Facebook page that the EU’s decision to impose tariffs on Cambodia and Myanmar rice aims to prevent the collapse of rice processing companies in EU member states such as Italy and Spain.

He said the EU’s safeguard still allows semi-processed rice from the Kingdom tax-free.

“We are sending a sample of semi-processed rice and other types of rice allowed with zero tariffs [the EU has imposed tariffs on only four types of Cambodian rice] for the EU to review."

“I am confident that from February at the latest, we will be able to export rice to the EU market duty-free as normal,” he said.

However, Saran said the volume of rice exports to the EU will decrease between next year and 2021, as consumers can buy rice from other countries.

Neither Saran nor representatives from the Cambodia Rice Federation could be contacted on Sunday regarding details on new measures taken in response to the EU’s safeguard.

Government data said the Kingdom exported a total of 626,225 tonnes of rice last year, of which the EU received around 43 per cent or 269,127 tonnes.

A statement issued by the Ministry of Commerce on Friday said the EU’s decision to impose tariffs on the Kingdom’s rice imports did not fully reflect the prevailing international trade rules, technical standards and good cooperation between Cambodia and the European bloc.

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