RP-Thailand rice deal could be inked next month

Jessica Anne D. Hermosa

24 January 2010

http://www.bworld.com.ph/main/content.php?id=5128

THE PHILIPPINES and Thailand could next month sign an agreement that will allow the former to delay tariff reduction commitments by increasing rice purchases from its neighbor, a Trade official said.

Both sides finally settled a duty-free quota and purchase terms at the sidelines of an Association of Southeast Asian Nations (ASEAN) senior economic officials meeting in Vietnam last Thursday, Trade Assistant Ramon Vicente T. Kabigting said.

"From now to 2014, we will provide an annual platform of access of up to 367,000 metric tons of rice," he said in a telephone interview on Friday.
"We commit that if we are buying and they participate in this, then we will look at them as one of our strong suppliers," Mr. Kabigting added, explaining that the Philippines will not be compelled to purchase the grain from Thailand if conditions are not favorable.

"They also commit to have it ready for us if we need to buy it," he said.
The two Southeast Asian neighbors have been in talks since late last year when Thailand insisted the Philippines slash rice tariffs to 20% this year, from 40%, under the ASEAN Trade in Goods Agreement.
The Philippines has argued that the trade pact allowed it to exempt rice from the scheduled tariff cuts before bringing it down to 35% in 2015.
Mr. Kabigting said ministers were slated to ink the compromise in February after the Philippines checks the deal’s language one final time.

The National Food Authority (NFA), he said, will apply an accounting provision that will in effect mean duty-free access for the Thai rice quota.
But this will only cover government-to-government transactions as private traders will have to comply with the 40% tariff, Mr. Kabigting clarified.
The Philippine government usually purchases rice from Vietnam as high-quality Thai rice is pricier.

Last year, the government imported 1.575 million tons, with Vietnam cornering roughly 95% of all tenders, while Thai imports only totalled 75,000 tons.
If the Philippines will be purchasing high-quality rice, it will provide priority to up to 50,000 tons of Thai rice under the current deal but this will be deducted from the 367,000-ton quota, Mr. Kabigting said.

"Thailand has given us a sentence, a proposed language [to capture this provision for high-quality rice]. Just as a form of due diligence, we will pass this on to NFA to see if they find this acceptable," he said.

"If we are lucky, this can be signed at the ASEAN Economic Ministers retreat in February."

Thai officials were not immediately available for comment. A local advocacy group representing rice farmers said they were amendable to the deal but were still wary over how the government decides when to import the commodity.

"We will look unreasonable if we say no to imports given the catchphrase ’only if demand is there and the price is competitive’," Rice Watch and Action Network Convenor Jessica Reyes-Campos said in a telephone interview on Friday.

"The thing is how do we establish real shortfall and demand for imports to begin with," she said.

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