New export markets for rice on the horizon

The Office of the U.S. Trade Representative (USTR) is scheduled to formally begin negotiations

with Kenya on a free trade agreement as soon as this week, beginning with a virtual, ceremonial

meeting and laying out high-level negotiating objectives. Negotiators will also be setting up a

timeline for meetings that will likely take place over the next year.

Following closely on the heels of last week's implementation of the United

States-Mexico-Canada Agreement (USMCA), this move signals that there is both enthusiasm

and political will to continue expanding market access for U.S. products, including rice.

U.S. negotiations with Kenya are scheduled to take place concurrently with U.S. trade talks with

the United Kingdom, both strong potential markets for U.S.-grown rice exports.

Currently, U.S. milled rice entering the European Union and the UK is limited to a 38,000 metric

ton quota, but subject to a 25 percent retaliatory tariff. Sales outside of that quota face a duty

that's the equivalent of just under $200/MT, and rice entering Kenya is subject to a 35 percent

duty, which combined with regional logistical challenges, makes U.S. rice sales there difficult.

"While the UK is already a long-time customer of U.S.-grown rice, we certainly have potential to

grow that existing market share if we achieve duty-free and quota-free access," said Mark Holt,

an Arkansas miller and chair of the USA Rice Europe, Africa, Middle East Trade Policy

Subcommittee. "However, Kenya offers new market potential for U.S. exporters since they're

already a sizable rice importer and we're not present in that market."

Holt added: "USA Rice has been in close communication with USTR to vocalize our priorities for

both UK and Kenya trade negotiations. We will follow the progression of the talks and continue

to build our relationships with importers in both of those markets ahead of future deals."

USTR began negotiations with the UK in May and completed their second two-week discussion

period in late June. Negotiations are scheduled with both the UK and Kenya throughout the

summer; however, completion dates are still unknown and dependent upon whether any

headway is made as talks progress.

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