Rice: Tariff Reduction to Be Reviewed

Because in 2023 the tariff on rice imports will be zero because of the CAFTA-DR Treaty, rice producers in El Salvador are asking for a review of the trade agreement.

Wednesday, May 5, 2021

According to CAFTA-DR, which was signed in 2004 and came into force in 2006, the tariff on imports (DAI) will be eliminated gradually.

The IAD was reduced from 40% to the 13% currently charged; in 2022 it will be reduced to 6.7% and in 2023 it will be reduced to zero. In this context, local producers expect that local companies would prefer to import from the US, where it is priced at lower prices.

Rigoberto Monge, coordinator of the private sector for Free Trade Agreements, told Laprensgrafica.com that "... the CAFTA-DR in its article 3.18, states that a commission will be established, in the 14th year after the entry into force of this treaty, for the agricultural review, with the parties, which is fulfilled this year."

The commission will be in charge of reviewing the implementation and operation of the agreement as it relates to trade in agricultural goods and will then report its findings and whatever its recommendations are, Monge explained.

Javier Navas, president of the Asociacion Salvadorena de Beneficiadores de Arroz (ASALBAR), said that "... 'we need to address the very complex situation in a technical working meeting, not just another political meeting. The problems we face are profound and of an economic and legal nature, the CAFTA tax relief is going to destroy national producers and will greatly affect the industries'."

Research by CentralAmericaData specifies that in the first half of 2020 Central America allocated $206 million to rice imports, 50% more than in the same period of 2019, with Honduras, Panama, El Salvador and Guatemala being the markets that boosted the rise in purchases.

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