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RP seeks slower tariff reduction for rice under Afta

BusinessMirror, Philippines

RP seeks slower tariff reduction for rice under Afta

By Jennifer A. Ng / Reporter

13 September 2009

The Philippines is now negotiating for a slower reduction in tariffs for rice traded under a free-trade scheme among members of the Association of Southeast Asian Nations (Asean).

Agriculture Secretary Arthur Yap said the Philippine government is negotiating for less drastic tariff reduction for rice traded under the Asean Free Trade Area-Common Effective Preferential Treatment (Afta-CEPT).

“Our first proposal was by 2018, rice tariffs would go down to 35 percent. Now, we have [amended our proposal] and the [proposed] schedule is already 2015,” said Yap.

He said Thailand is expected to respond to Manila’s proposal by October.

Under the original agreement, most sensitive agricultural products traded under Afta should have a reduced tariff of between zero to 5 percent by 2010.

Yap said the government had submitted a proposal to Thailand, a major rice-exporting country in Asean. Thailand was reportedly not amenable to allowing the Philippines to delay the reduction of tariff for rice by next year. The Philippines currently imposes a 40-percent tariff on rice.

Farmers’ groups and nongovernment organizations have asked the government to make representations in Asean to delay the phase-in of rice in the inclusion list by next year.

This, however, would force the Philippines to make concessions and compensate other Asean member-countries if it would decide to exempt rice from the inclusion list.

Most farm producers in the Philippines are calling on the government to delay the tariff cuts under Afta-CEPT, saying they are not ready to compete under a liberalized trading scheme.

Under the current terms of Afta, most farm products, including sugar, coffee, corn, and livestock and poultry, are supposed to go down anywhere between zero to 5 percent.

Afta is a trading agreement originally signed in 1992 by six members of Asean, namely, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

The free-trade arrangement seeks to increase Asean’s competitive edge as a production base in the world market through the elimination of tariffs and nontariff barriers.