By Janina C. Lim, January 9 2019; Business World
Image Credit to Philippine Star
THE Philippines’ decision not to extend quantitative restrictions on rice has improved its position with potential trading partners, its World Trade Organization (WTO) representative said.
“Our view is that the perception of the Philippines as a trading partner has improved after the current administration’s declared policy of ending its quantitative restriction on the importation of rice and our making progress towards tariffication,” Representative to the Philippine Mission to the WTO Ambassador Manuel A. J. Teehankee said in an e-mail interview.
The Philippines has been receiving queries from WTO-members about its obligation to move away from a QR regime, which were brought up frequently during the country’s trade policy review last year.
The QR is a non-tariff measure imposed by a member of the WTO to limit the volume of a particular commodity entering its borders.
Annex 5 of the Agreement on Agriculture which was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade allowed members to apply for special treatment in certain products by complying with certain provisions under the deal.
Rice is the only commodity in the Philippines that enjoys special treatment, granted to the country upon acceding to the WTO in 1995.
With the QR, the Philippines sought more time to achieve self-sufficiency in the staple grain, to counter the impact of the expected influx of cheap rice imports.
The waiver’s validity ended a decade later but was further extend by seven years after the Philippines lobbied for an extension which was granted in 2007.
This continued until its 2012 expiry after which the country negotiated for another extension, again to buy more time to prepare farmers for liberalized trade. The second request for an extension was granted in 2014 and ended June 30, 2017.
However, the country failed to amend the Agricultural Tariffication Act of 1996, and replace the quantitative restriction on rice imports, in time for the waiver’s expiry.
The waiver was nevertheless extended up until the country passed the law.
In November, Senate Bill No. 1998, Act Replacing the Quantitative Import Restrictions on Rice with Tariffs, Lifting the Quantitative Export Restrictions, made it past the chamber’s plenary.
Under the measure, the country will apply a 35% tariff for rice shipments from ASEAN member states, in recognition of the ASEAN Trade in Goods Agreement. For non-ASEAN member states, a 50% tariff equivalent will be applied.
Rice tariffication has raised concerns that rice farmers may lose their livelihoods because of their inability to compete with cheaper imported rice.
Mr. Teehankee said that “the interests of our rice producing farmers and sectors are safeguarded while assisting them in becoming competitive and also be able to avail of the benefits of higher value-added rice production that can be exported.”
The Senate bill as approved proposes the creation of a Rice Competitiveness Enhancement Fund which will be funded from tariffs.
It will receive a minimum P10 billion every year for six years, after which period all duties collected from the importation of rice are expected to have replaced the allocated funds.
The fund will provide assistance to rice farmers, helping them develop inbred rice seeds, farming equipment and upgrade their rice-growing skills. — Janina C. Lim