Business Mirror, Manila

Sugar quota stays, US assures PHL

4 June 2012

By Jennifer A. Ng / Reporter

The United States has assured the Philippines it will not renegotiate sugar access with countries that have concluded free-trade agreements (FTAs) with the United States. Manila had feared that rival exporters would take advantage of Trans-Pacific Partnership (TPP) talks to get a bigger slice of the world sugar market.

“We asked for and received assurances [from the United States Trade Representative or USTR] that the US does not intend to renegotiate sugar access in TPP negotiations of countries that already have FTAs with the US [such as] Australia, Chile and Peru,” Ma. Regina Bautista-Martin, chief of the Sugar Regulatory Administration (SRA), said in her report to Agriculture Secretary Proceso Alcala.

Countries that ship sugar to the US under the quota system like the Philippines were said to have been apprehensive that Australia and Peru could use the TPP talks to gain market share.

In November 2009, the US announced its intention to participate in the TPP negotiations to conclude “an ambitious, next-generation, Asia-Pacific trade agreement that reflects US priorities and values.”

The TPP is seen by the US as a way to boost economic growth and increase American exports in the Asia Pacific, a region that includes some of the world’s “most robust” economies and that represents more than 40 percent of global trade.

The 13th round of the TPP talks will be held in San Diego, California, from July 2 to 10. The first round of negotiations was held in Australia in 2010.

The US is negotiating with Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam.

If concluded, analysts said the TPP would eliminate 11,000 tariff lines among the parties.

Martin and other stakeholders in the Philippine sugar industry recently went to the US to express their support for Washington’s existing sugar policy as the US Congress deliberates on drafting a new farm bill.

SRA said the farm bill sets the minimum price for sugar and provides authority for managing supply.

A number of sugar-exporting countries are allowed to ship sugar to the US under a quota system. The volume allocated for each country is slapped a relatively low tariff.

For the current fiscal year, the Philippines was granted an additional 72,373.65 metric tons (MT) of sugar under the tariff-rate quota scheme. The volume is on top of the 138,827 MT earlier allocated to the Philippines.