PHL pushes for freer rice trade in ASEAN
TRADE Secretary Ramon M. Lopez is pushing for the inclusion of rice in a list of essential goods exempt from restrictive trade measures in the Association of Southeast Asian Nations (ASEAN) during the coronavirus disease 2019 (CO VID -19) pandemic.
The 10 member states in November signed a memorandum of understanding committing to refrain from new and unnecessary nontariff trade measures on a list of 152 essential goods, consisting mostly of medical products, to prevent supply disruption during the COVID-19 pandemic.
Mr. Lopez called for the inclusion of staple food like rice in a potential expanded list during an online meeting with ASEAN economic ministers on March 2-3, the Department of Trade and Industry (DTI) said in a press release on Sunday.
“It is imperative for ASEAN to show to our stakeholders that Member States are determined to ensure the smooth flow of these essential goods in these challenging times,” he said.
“In fact, even in normal circumstances, it is incumbent upon Member States to refrain from implementing unnecessary non-tariff trade measures.”
The ASEAN economic ministers are looking at expanding the essential goods list to include food and agricultural products.
Member states may still impose restrictions in cases of a public health emergency, but must conform with international trade obligations.
More Philippine companies in 2019 reported burdensome non-tariff measures compared with Asia-Pacific economies, a joint report of the United Nations Economic and Social Commission for Asia and the Pacific and the United Nations Conference on Trade and Development said.
LOWER TARIFFS
Meanwhile, the Finance department is supporting moves to lower tariffs and ease other non-tariff barriers on food products as a way to temper the continued rise in consumer prices in the near term.
Finance Undersecretary Gil S. Beltran said in an economic bulletin that inflation will remain elevated in the coming months if supply issues are not addressed immediately.
“Likewise, the price rise is due mainly to regulated products with high tariff rates and non-tariff barriers... Economic decision makers need to ease these protective barriers to provide more competition to heavily protected domestic suppliers,” he added.
Pressed for details, Mr. Beltran said in a text message that easing trade barriers on fish, meat, cereals, rice and other food items, should be a priority since strict “regulations lead to high inflation.”
Headline inflation hit a 26-month high in February, accelerating by 4.7% year on year on rising food and transport prices, the Philippine Statistics Agency reported on Friday.
This was higher than 4.2% in January and 2.6% a year ago. It was also within the central bank’s 4.3%-5.1% estimate for the month but exceeded the 2-4% annual target.
The increase in food costs alone climbed to 6.98% last month from 6.64% in January as prices of meat and vegetables surged by 20.7% and 16.7%, respectively.
The interagency Committee on Tariff and Related Matters (CTRM), which the National Economic and Development Authority (NEDA) co-chairs with the Trade department, proposed to lower the most favored nation (MFN) tariffs for pork and rice to address the expensive food costs.
“We are fast-tracking policies determined to stabilize food supply to ensure that households affected by COVID-19 and the quarantines will not be doubly affected by the increase in food prices,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a statement on Friday.
The move to lower tariffs for pork and rice follows the earlier proposal of the Agriculture department to hike the minimum access volume (MAV) for pork imports to 404,000 metric tons (MT) from 54,000 MT.
The higher MAV threshold meant more imports will be charged at the lower 30% rate while those above the quota will pay a 40% tariff. The move is meant to temper high meat prices due to the ongoing African Swine Fever (ASF) outbreak, but has yet to be approved by President Rodrigo R. Duterte.
University of Asia and the Pacific economist George N. Manzano said lower tariffs and more pork imports would be a quick response to address supply-side issues on high food prices.
However, Mr. Manzano who is also a former tariff commissioner, warned the short-term solution could have an adverse impact on the local agricultural sector.
“It will make certain agri industries less attractive to investments. But these are pandemic days, where shipping needed supplies to the capital from the other regions is not easy due to the restrictions,” he said in a Viber message on Sunday.
“The government can aim for calibrated and temporary tariff reduction until the domestic suppliers can recover from the effects of the swine disease,” he added. —