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Return to negotiating table for ‘early harvest’ deal eyed

ABS-CBN, 21 April 2005

Return to negotiating table for ‘early harvest’ deal eyed

By NIEL V. MUGAS, The Manila Times Reporter

Negotiations for the proposed Early Harvest Program (EHP) may soon resume as the Philippines and China expressed interest in forging a memorandum of understanding (MOU) on the project.

The EHP is a trading protocol under the proposed free-trade agreement (FTA) between China and the 10-member Association of Southeast Asian Nations (ASEAN) that proposes a faster tariff reduction in unprocessed agriculture and manufactured goods. Tariff reduction will be determined through bilateral talks between China and each ASEAN member-country. The EHP involves the tariff reduction on "nonsensitive, normal products" to five percent by January 2005 and further to zero by 2010.

The Philippine special ambassador to China, Jose Antonio, disclosed Wednesday that an MOU for the EHP is among the agreements to be signed between the Philippines and China during the scheduled visit of Chinese President Hu Jintao in late April.

Discussions over the EHP began in 2004, but stalled as both camps failed to agree on the number of products on the exclusion list.

The Philippines allowed only about half of the 417 agricultural tariff lines under Chapters 1-8 of the Tariff and Customs Code to be covered by the EHP, excluding rice, corn, vegetables, pork, chicken and other sensitive products.

The Philippine government assumed this stance following opposition from local industries.

Local agricultural and manufactured goods producers feared that entering into the EHP with China would render domestic industries powerless against the expected influx of cheap products from the Chinese mainland.

Government records show that the Philippines has a $100-million deficit in agricultural trade.

Antonio, however, said talks for the EHP will be under way as soon as both countries sign the MOU.

He said forging the EHP with China would allow local industries to tap a bigger share of the estimated 1.3-billion Chinese market.

It would also increase bilateral trade between the Philippines and China.

China is the fifth and the fastest growing trading partner of the Philippines. Data from the National Statistics Office showed that bilateral trade between the two countries grew by 52 percent to $3.959 billion in 2003 from only $2.608 million in 2002.

 source: ABS-CBN