Yesterday’s release of the Trans Pacific Partnership text confirms what many have speculated – Mexico has agreed to eliminate all tariffs on rice imports from other TPP partners. The United States already enjoys duty-free access for rice into Mexico because of the North America Free Trade Agreement, so the largest beneficiary of this move is Vietnam.Mexico has agreed to eliminate all import duties on rice except for milled rice on the day the TPP agreement enters into force.
Milled rice duties will decline from the current 20 percent by 2 percentage points each year for 10 years. This reduction will begin after entry into force which is unlikely to occur until 2017 at the earliest.
“We faced an uphill battle in Mexico because it was evident that Mexico’s government intended to liberalize rice trade with its TPP partners,” said USA Rice COO Bob Cummings. “The major threat is in milled rice and USA Rice worked closely with the Mexican Rice Council to preserve the U.S. rice market in Mexico.”
“Thank you to USA Rice for the support which it has given to us,” said Ricardo Mendoza, Executive Director, Mexican Rice Council in an email to USA Rice confirming Mexico’s new duty structure. “We will be following closely the approval process [in the TPP countries].”
Mexico is the number one export market for U.S. rice. Paddy rice dominates U.S. exports and Mexico’s imports. However, the share of milled rice imports is on the rise, including from the United States, and Vietnam is likely to be a key competitor for the United States going forward.