The Philippine offer to buy 360,000 metric tons of rice tariff-free from Thailand this year as its compensation for refusing to cut rice duty fully under the ASEAN Free Trade Area agreement is still subject to market conditions, meaning supply, demand and prices.
This was stressed by Trade and Industry Assistant Secretary for International Trade Group Ramon Vicente Kabigting after the Philippines and Thailand have concluded a negotiating process for the Philippines compensation scheme to Thailand over its decision to delay tariff cuts on rice.
“Thailand has a commitment to allocate 360,000 tons and we are committed up to that level subject to market conditions including the right price,” Kabigting said. This means if the price is right.
Kabigting said this was agreed during the ASEAN Summit in Hua Hin in October 2008.
“We also told Thailand this government-to-government arrangement shall be subject to the applicable domestic laws, rules and regulations of both countries,” he said.
Thailand has already replied to the draft Philippine Memorandum of Understanding, which had been cleared by the Department of Agriculture and the National Food Authority, last December 13, 2009, asking for some clarifications.
“It did not question the numbers but asking only a few clarifications and make constructive suggestions for further dialogue,” Kabigting said.
Under an Asean free trade pact, Philippine rice import tariffs should have been cut to 20 percent from 40 percent by Jan. 1, 2010, but changed its mind by classifying rice as a "highly sensitive" product, which would allow it to apply a tariff of 35 percent.
Thailand has already announced that the agreement could be signed at a meeting of economic ministers of ASEAN to be held middle of this year. Asean groups Brunei, Cambodia, Indonesia, the Philippines, Laos, Myanmar, Malaysia, Singapore, Thailand and Vietnam.
Thailand, the world’s biggest rice exporter, shipped 8.57 million tons of rice in 2009, but only around 140,000 tons of that went to the Philippines, the world’s biggest importer.
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