EU won’t renew special tariff rate for RP canned tuna
BusinessWorld 12/18/2008
EU won’t renew special tariff rate for RP canned tuna
Romer S. Sarmiento
KORONADAL, Philippines - The European Union (EU) will not renew a special tariff scheme for canned tuna from the Philippines and two other Southeast Asian countries, offering, instead, increased market access for the product in its 27 member-countries via a free trade agreement, the top EU representative in the Philippines said in a news conference here Wednesday.
Alistair B. MacDonald, head of delegation of the European Commission (the EU’s executive arm) in the Philippines, said the five-year in-quota tariff granted to "non-preferred" countries led by the Philippines, Thailand and Indonesia that ended last June was just a temporary arrangement.
"We have no intention on our side to prolong that arrangement," Mr. MacDonald said.
The in-quota tariff slaps a 12% duty on canned tuna goods, compared with the regular 24%. The 12% rate is confined to 25,000 metric tons (MT) a year, divided as follows: 9,000 MT from the Philippines; 13,000 MT from Thailand; 2,750 MT from Indonesia and the balance other "non-preferred" countries.
Beyond that 25,000-MT annual quota, canned tuna from these countries are slapped a 24% tax rate.
Aside from asking the EU to prolong the lower in-quota tariff scheme, tuna industry players in the country have also requested that the volume allocated to the Philippines be increased.
Mr. MacDonald said that raising the market access of canned tuna from the Philippines would need to be negotiated.
"Our position in improving the market access of local canned tuna is to address the issue in the context of a free trade agreement between ASEAN countries and the EU," he said.
Difficult
Mr. MacDonald said the free trade pact between the parties is still under discussion and will take some time to be established.
ASEAN and EU had earlier admitted that while a free trade deal between them is desirable, talks have been difficult due to diverse economic conditions in Southeast Asia and inclusion in ASEAN of Myanmar, whose military rule has constantly received criticism by the EU.
But EU has started inching towards a free trade deal with ASEAN by first negotiating comprehensive bilateral pacts, called Partnership and Cooperation Agreements, which will provide the framework of relations with each Southeast Asian state in the political, commercial, economic, scientific and cultural spheres.
Singapore, Indonesia and Thailand had gone ahead in these talks - negotiations with the Philippines will start only in February next year.
Free trade deals with the EU are known to be more demanding than those of other states or blocs, since a deal with the Union usually goes beyond market access, to include commitments in areas like protection of intellectual property and of workers.
The tuna industry in the Philippines is centered in nearby General Santos City, which hosts six of the country’s seven tuna canneries.
Industry players had earlier lamented that income of exporters will be affected, considering that without the extension of the special tariff rate.
When the quota system took effect in 2003, Trade officials said that it meant savings of at least P112 million per year for canned tuna exporters.
Bayani B. Fredeluces, executive director of the Socsksargen Federation of Fishing and Allied Industries, Inc., said in previous interviews that local canned tuna producers can easily fill the 9,000-MT allocation in a span of several weeks, hence, his industry’s request for a higher allocation.
The industry estimates that canned tuna shipments to Europe could grow by as much as 20% if the EU will provide a bigger allocation to the Philippines at 12% tariff rate.
Europe accounts for at least 40% of Philippine canned tuna exports yearly, industry figures show.
