Southeast Asian trade deal imperilled

7/12/2009

SEVERAL SOUTHEAST Asian states have warned that a regional trade pact that will put in place minimum tariff rates by start of next year may collapse if the Philippines and Thailand fail this month to resolve their row over tariff rate cuts for rice, a Philippine trade official said late last week.

This comes as the Philippines and Thailand -- although already ironing out a side deal on rice tariffs -- have yet to resolve the issue with just less than a month before the regional trade pact involving eight other countries is due to take effect.

The Philippines will be able to adapt to a scenario wherein commitments due in 2010 will be postponed, Trade Assistant Secretary Ramon Vicente T. Kabigting told reporters at the sidelines of a tariff hearing on Friday. Orders imposing the 2009 commitments will simply stay in place, unless otherwise repealed, Mr. Kabigting said.

But that is not the case for other members of the Association of Southeast Asian Nations (ASEAN) who had already repealed previous agreements to make way for the 2010 round of cuts under the recently minted ASEAN Trade in Goods Agreement (ATIGA), he said. The agreement consolidates all other deals previously made in line with an envisoned ASEAN Free Trade Area. It provides that tariffs on all goods except sensitive ones be brought down to 0%-5% by Jan. 1, 2010.

"Others say their procedures are different. They will need different forms [for instance]. Without [agreement in rice tariffs for ATIGA], they said the trade deal will collapse," Mr. Kabigting said.

"We need to get the memorandum of agreement out," he said, referring to a side deal the Agriculture department is drafting that will outline market access privileges the Philippines will grant Thailand.

Thailand had sought compensation for the Philippines to keep the level of protection for its local rice farmers -- a 40% tariff on imported rice -- until 2015.

Aside from Thailand and the Philipines, ASEAN consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, and Vietnam. -- Jessica Anne D. Hermosa