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18 January 2010

Philippine, Thai officials to meet on rice trade row

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Senior government officials from Manila and Bangkok are expected to start discussions on Monday to resolve their row on rice traded under a free-trade scheme among members of the Association of Southeast Asian Nations (Asean), the Business Mirror quoted a Philippine agriculture official as saying.

Agriculture Undersecretary Segfredo Serrano said the discussions would be held in the Senior Officials’ Meeting (SEOM) of Asean in Danang, Vietnam, from January 18 to 21.

Serrano, however, would not confirm whether the Philippines had indeed offered to allow Bangkok to export more than 300,000 metric tons (MT) of rice to Manila duty-free.

International reports quoted Thai officials as saying that Manila’s offer is “acceptable.”

“We’re still in negotiations. We cannot tell the position of the Philippines,” Serrano told reporters in an interview.

Under the Asean Free-Trade Agreement (Afta), the Philippines should have brought down tariffs on rice starting this year.

Before Afta could come into full effect on January 1, Manila decided to invoke a special protocol on rice and sugar signed by Asean member-countries in 2007 to delay the reduction on rice tariffs.

In October Agriculture Secretary Arthur Yap said the Philippines could not go down below a tariff of 35 percent for rice imports. Currently, rice imports traded under Asean are subjected to a duty of 40 percent.

Thailand had threatened to delay the implementation of the Asean Trade in Goods Agreement (Atiga), a framework that enhances the Afta-Common Effective Preferential Tariff (CEPT) scheme, if Manila will insist on delaying the tariff reduction on rice.

Starting January 1, the Philippines and five other Asean member-countries (Asean-6) removed tariffs on 7,881 tariff lines.

This brought the total tariff lines traded under the Afta-CEPT to 54,547, or 99.11 percent. With the reduction, the average tariff rate for Asean-6 will further decrease to 0.05 percent in 2010, from 0.79 percent in 2009.

In 2008 intra-Asean import value of commodities for 7,881 tariff lines amounted to $22.66 billion, or 11.84 percent of Asean-6 import value within Asean.

Under the Afta-CEPT schedule for tariff reduction, each Asean member is allowed to place their products in the normal track, where the commitment is for the tariffs to be reduced to zero by 2010 for Asean-6 (which includes the Philippines) and 2015 for the remaining four countries, namely, Cambodia, Lao PDR, Myanmar and Vietnam.

Agricultural products—tobacco, coffee, live animals and animal products, which are categorized under the sensitive list—will have their tariffs reduced to 5 percent in 2010 and to zero tariff by 2015.

The highly sensitive list, including rice, will have their tariffs capped on a specified date, according to a statement released by Asean.


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