Sunday, 11 April 2010

RP signs rice deal with Thailand

Manila Bulletin

HANOI – The Philippines has signed a trade agreement with Thailand to keep a 40-percent tariff on rice imports from the regional bloc until 2015, ending months of dispute on rice tariffs.

Trade Secretary Jesli Lapus said the memorandum of understanding on rice also committed the Philippines to buy around 360,000 metric tons of the Thai commodity every year.

The signing of the memorandum of agreement between Lapus and Thai Commerce Minister Porntiva Nakasai was made at the sidelines of the 16th Association of Southeast Asian Nations (ASEAN) summit last Thursday.

The RP-Thailand trade agreement falls under the wider ASEAN Trade in Goods Agreement (ATIGA) wherein the Philippines and five other ASEAN member-nations were ready to implement the tariff reductions on specific goods by January 2010.

Under agreement, Lapus said the Philippines is allowed to retain a tariff of 40 percent on rice imports from ASEAN until January 1, 2015 before it is reduced to 35 percent.

In exchange for the accommodation, the Philippines would keep a “special access arrangement” with Thailand for rice shipments of 367,000 metric tons annually. Thailand is considered a major supplier of rice to the Philippines.

“This was the only stumbling block to the ASEAN Trade in Goods Agreement. The entire ASEAN has been waiting for the Philippines and Thailand trade agreement. Subject to the conditions prevailing in the Philippines, if we need the rice for the right price, Thailand commits to have available at least 360,000 metric tons of rice and the Philippines commits to lower tariff from 40 to 35 percent by 2015,” Lapus told reporters after the signing rites.

Lapus said Thailand initially had a “hard line” on the matter pressing for 20 percent tariffs on rice imports into the Philippines. During the early negotiations, the Philippines refused to bring down the rice tariffs below 35 percent by 2015 to protect its farm sector.

The RP-Thailand rice agreement, which does not require any ratification from Congress, takes effect right away, according to Lapus. “I was given full powers to sign for the Philippines. I should make clear though the rice imports pertain to the private sector. Government-to-government purchase of rice is already zero-tariff,” Lapus said.

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