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NEWS UPDATES 18 October 2009

Philippines suggests Asean keeping rice tariff between 35-40%    

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The Philippines is not keen on going beyond the 35-percent to 40-percent range as beginning tariff rate for rice by 2015 under a free trade scheme among members of the Association of Southeast Asian Nations (Asean), reported local news website the Business Mirror.

Agriculture Secretary Arthur  Yap said the Philippines has submitted a proposal to the Asean to start tariff cuts for rice traded under the Asean Free Trade Area-Common Effective Preferential Treatment (Afta-CEPT) by 2015.

“Our preferred landing zone [for rice under Afta-CEPT] is between 35 percent to 40 percent,” Yap told reporters in an interview.

The Department of Agriculture (DA) noted that around 80 percent of all products traded under Afta are already at zero.

Under the Afta-CEPT, tariffs on most farm products are supposed to go down to a range of between zero to 5 percent.

The Philippines, however, has decided to negotiate for slower tariff reductions on sugar. Trade and agriculture officials involved in Afta-CEPT negotiations said earlier that Manila’s trading partners posed no objections to the delay in the reduction of tariffs on raw and refined sugar.

Tariffs for sugar products traded under Afta-CEPT are currently at 38 percent.

For rice, the quantitative restriction (QR) for it will be in place until 2012, consistent with the Philippines’ commitment to the World Trade Organization (WTO).

Under the QR scheme, Manila will allow a minimum volume of rice that will enter the country at an in-quota rate of 40 percent.

Rice imported outside the minimum volume will be slapped a tariff of 50 percent.

Earlier, trade officials hinted that the Philippines’ proposal to retain rice at the highly sensitive list did not encounter stiff opposition from major rice-exporting countries in the region such as Thailand.

The Philippines is still in negotiations for the date when rice will be removed from the highly sensitive list and the rate of tariff cut.

The Alyansa Agrikultura earlier called on the government to ask for a delay in the full implementation of the Afta-CEPT scheme by five years. The coalition said the local farm sector is still unprepared for full liberalisation of farm trade in Asean.

Under Afta-CEPT, most tariffs on farm products should have gone down to between 0 to 5 percent by January 1, 2010.


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