AFTA agrees to delay tariff lib on sugar

Trade and Industry Secretary Manuel Roxas II declared over the weekend that the ASEAN Free Trade Agreement (AFTA) council has agreed in principle to allow the Philippines and Indonesia to delay the liberalization of tariffs on sugar until 2010.

Roxas said the decision, which was endorsed by the ASEAN economic ministers (AEM) at the conclusion of their meeting in Hanoi, "will allow the Philippines to maintain high tariffs on sugar for several more years before phasing it down to a maximum of five percent in 2010."

Under AFTA rules, Roxas explained, the Philippines is committed to begin systematically lowering its current 50 percent tariff on imported sugar in 2003 until it reaches a rate of between zero and five percent by 2010.

Trade and Industry Undersecretary Thomas Aquino, who attended the AEM meeting in Hanoi, had reported to Roxas that it was a tough fight in the AEM meeting, "but other ASEAN countries eventually came around to sympathize with the Philippine request."

Aquino admitted that the country needs to "work out the details of the decision, including further discussions with Thailand, which was the only ASEAN member that expressed serious concern about giving the Philippines and Indonesia more time before easing tariffs on sugar."

Roxas acknowledged that "at the end of the day, we will need to assure the Thais that if and when the Philippines imports sugar, Thailand will be given first crack as a supplier."

Thailand is a net exporter of sugar and had been hoping that once tariff barriers on sugar is lowered it would be able to sell its sugar to the Philippines and Indonesian markets.

Following the decision reached at the AEM meeting in Hanoi, Roxas expressed optimism the ASEAN senior officials would be able to complete the work before the next AEM meeting in early November in Brunei, just before the ASEAN leaders summit.

Roxas added that parallel efforts started last year to modify sugar tariff commitments in the World Trade Organization (WTO).

Negotiations with Australia, Thailand, Brazil, and Singapore, which private sector representatives from the Philippine Sugar Millers Association undertook, have been going on for about a year now, Roxas said.