Thailand balks at RP bid for AICO arrangements

Thailand is dragging its foot on several applications of the Philippine government for Asean Industrial Cooperation (AICO) arrangements, it was revealed yesterday.

Government sources said Thailand appears to be retaliating against the Philippines for its recent success in getting an exemption from the Asean Free Trade Agreement (AFTA) council to delay the lowering of its tariff on sugar.

Under the AFTA, member countries are scheduled to lower their tariff barrier by 2003.

The Philippines and Indonesia were recently granted by the AFTA council a nine-year breathing period before they must lower their tariffs for sugar imports.

The Philippines and Indonesia have been given up to the year 2010 to maintain their current tariff rates on sugar.

At present, the Philippines’ tariff rate on sugar is 15 percent.

Thailand, which is a net exporter of sugar, was reportedly disappointed by the AFTA council decision.

Sources said Thailand had wanted to tap the Philippine market for its sugar exports.

They said that while Thailand has not exactly rejected any of the Philippine AICO applications, "they appear to be moving very slowly," adding that "they are not saying that they are not processing it (applications). But they are not saying they are rejecting it."

One specific AICO request that is being affected, sources said, is the application of Ford Motor Philippines Inc. to export to Thailand certain models it manufactures in the country and in turn import specific models it assembles in Thailand.