Lower tariffs for banana exports sought
Philippine banana exporters are seeking help from the agriculture and trade agencies of the government to negotiate for preferential or zero tariff with importing countries in order to keep dominant position as largest exporter of bananas in the region.
In a statement, the Pilipino Banana Growers and Exporters Association, Inc. (PBGEA) noted of threats from some banana producers in Asia, particularly Vietnam, to grab the Philippines of its position as the largest exporter of bananas in this region.
“Observers from the agriculture sector are wary that the banana industry might be the next agricultural product to lose its dominant position in the world market following the export decline of sugar, coffee, and coconut oil. All these three products used to be big players in their respective world markets,” PBGEA said.
For instance, under the PhilippineJapan Economic Partnership Agreement, tariff rates for Philippine bananas to Japan range from 8.5 percent to as high as 18.5 percent. The Philippines is the country’s largest banana supplier to Japan.
Comparatively, other country exporters to Japan enjoy zero tariffs for their pooled quotas of 1,000 tons per year. As a result, more Japanese importers began striking deals with suppliers in Mozambique, Vietnam, Costa Rica, and lately in Indonesia, consequently reducing Japan’s dependence on the Philippines.
As of now, banana is still the country’s top fresh fruit export but industry players are starting to get worried that they will eventually lose its market if the Philippine government won’t be more aggressive in negotiating for reduced tariffs in their export markets.
Stephen Antig, executive director of PBGEA, said there is a need for a thor- ough review of the country’s free trade agreements (FTAs) and start assessing its trading partners’ fulfillment of their commitments.
“Production costs are increasing every year to maintain volume and quality, so much so that some multinational are already thinking about relocating to other countries which have investor friendly policies. In fact, some PBGEA members are already getting invitations to expand and develop banana plantations in Vietnam,” Antig said.
As of now, Philippine cavendish is still under the exclusion list of the country’s trading partners.
“That means our buyers have to pay import duties ranging from 40 to 10 percent of the value of the goods. This poses as a stringent constraint and encourages our importers to get fresh bananas from our competitors at lower importation costs,” Antig said.
As of now, the Philippines remains as the dominant supplier of fresh bananas to Japan, South Korea, China and New Zealand but Vietnam, Indonesia, Mozambique, Costa Rica have already started slowly penetrating these markets.
“Soon, many exports of Vietnam to South Korea will be tariff free, as it is already enjoying tariff free status in Japan,” the statement further mentioned.