Possible FTA with EU raises fears for agriculture
Business World (Manila) | November 25, 2013
Possible FTA with EU raises fears for agriculture
FURTHER opening up the country’s agriculture industry to competition with the European Union (EU) through a free trade agreement (FTA) may put the sector at risk, according to the head of the non-government organization IBON Foundation, Inc.
"Any tariff cuts in agriculture [imports from the EU] cannot but cause [local] agricultural production to contract given the accumulated advantages and subsidies to European agriculture, which would exacerbate rural poverty, especially with a diminishing manufacturing sector unable to absorb displaced labor," said Jose Enrique A. Africa, executive director of IBON Foundation, in an e-mail, when asked how a potential FTA with the EU could affect local industries.
The Philippines and the EU are currently in talks for a possible trade pact. And while details of a potential FTA with the EU have yet to be finalized, Trade Secretary Gregory L. Domingo yesterday said agriculture is one of the sectors the country is pushing for, "but it depends on the appetite of the EU for it."
The EU is the world’s leading exporter of agriculture products, with exports reaching $612 billion last year, data from the World Trade Organization showed.
The United States — the world’s second leading agriculture exporter — was not even close to achieving the 28-member bloc’s feat; the country exported $171 billion in 2012.
Out of the EU’s agriculture exports, 0.13% or $850 million went to the Philippines, which in turn exported $1 billion worth of goods to the EU.
While Filipino farmers receive support from the government, this is small compared with the numerous subsidies received by EU farmers through the 50-year-old Common Agricultural Policy which has allowed them to modernize the agriculture sector.
Mr. Africa said the EU "has reached a meaningful agricultural development after going through a period of active and responsible government protection and support", just like the US, Japan, and China.
"They all only opened up their economic sectors only after having first reached a minimum level of development that the Philippines is still far from achieving," he said.
"The government can and should have trade and investment relations with other countries more advanced than the Philippines, at the same level of development, and even with those less developed. But we are better off without an FTA with the EU if this will restrict the government’s capacity to act, discriminate, regulate, protect and support local agriculture and industry," he said. — D.E.D. Saclag
