Of tunas, bananas and mangoes

Recent developments indicate that Philippine agriculture’s competitiveness is under siege by no less than our trading partners who we considered dear and close to us.

Years back, hopes were high that joining the World Trade Organization (WTO) would open up many possibilities for a developing country like the Philippines. As we raced to push our agricultural products to new frontiers, we were naïve enough to think that our trading partners would welcome our produce with open arms.

Now, the euphoria of being part of the WTO "club" is being replaced with deep concern because of the eroding competitiveness of our agricultural produce.

Some sectors in government are having uneasy feelings that the country’s commitment to open up its markets came much too soon. We were like babes in the woods, too eager to join the club and too unsophisticated to realize that in the international market one has to promote and defend its own interest. And to do that, one has first to put its own backyard in order.

Convenience and obedience override principles

When countries like us joined the WTO, we were made to believe in one of its selling points – a trading system without discrimination or global barriers. An example would be that if a country lowers its tariff to a particular nation, it is expected to do the same to other countries.

However, it seems like the original advocates of free trade choose not to adhere to this especially when it is no longer convenient for them. Or when they want to impose obedience to achieve their own agenda. Take the case of the Mindanao tuna.

Out of the 13 million cases of tuna the Philippines produces annually, 38 percent are exported to the United States and 15 percent to Europe.

However, the United States continues to slap the Philippines with a 35-percent tariff on canned tuna, while selected countries like Bolivia, Columbia, Ecuador and Peru are given incentives.

Some say it was a punishment for a country that was then non-committal to the anti-terrorism efforts of the US government, the international community suspecting that the Philippines as a coddler of terrorists.

The tuna industry is a main revenue source of Mindanao where recent kidnapping activities were being linked to certain international terrorist groups. Some 45,000 fishermen and workers earn their living from the business.

Lately, we’ve been trying to actively correct that "terrorist-coddler" image. We not only allowed the US forces to sunbathe in our white sands, but also conducted operations against suspected terrorists groups. The Philippine government is also pushing for the revision of the recently passed anti-money laundering law retrofitted to US standards. And soon, once our legislators decide to work again, an anti-terrorism law would be crafted that would seek death to international and local terrorists.

Apparently being a long-time ally and a trading partner of the United States is not enough to bring the Philippine tuna at par with its other trading partners. We still have to do other tasks that our Big Brother USA commands us to perform.

The European Union (EU) members likewise see the Philippine tuna as a threat, having been imposed a 24-percent tariff. We can only describe this action as being grossly unfair, highly disadvantageous and largely discriminatory.

Certainly, a major principle of the WTO commitments is market access equality. But why discriminate against the Philippines when it is selling tuna cheaper than Europe’s African and Caribbean colonies?

While our tuna exports to Europe continue to provide our fishermen earnings, it could have been much better had the EU countries observed their commitment for market access equality.

And what is our response to this? Peep-squeak protest.

More rude awakenings

We were proud and filled with high hopes when we joined the big boys in the WTO "club." But now after several rude awakenings, the euphoria is being replaced with deep concern as we see the big boys, who were once passionately advocating free trade and the WTO, now engaging in protectionism.

Take the case of another of our agricultural export product: bananas. Australia is now making a mountain out of a molehill in a desperate bid to protect its local banana production.

Already, the Philippines can expect major problems if Australia submits a risk analysis that will ban Philippine banana exports allegedly because of pests and diseases.

It is common knowledge that the risk analysis was something Australia didn’t want to do, but were forced to after the Philippines threatened to impose a progressive boycott of all Australian products.

While the test is currently ongoing, Australian growers are pooling a "fighting fund" or what some say was lobby money to block Philippine bananas. They are reportedly collecting A$0.10 per 13-kilogram box, effectively raising $850,000 annually. That’s how serious they are in protecting their backyard. Are we?

The next question really now is: if Australia cannot produce a credible risk analysis on our bananas, shouldn’t we also adopt a more critical look at our trade balance with Australia?

After all, we conduct trading on the premise of reciprocity. If we invoke such principle, Australia would end up on the losing side since they are a net exporter, mostly because of our importation of cattle meat.

The point is: should we exhaust all remedies to push for trading reciprocity and not be seen as pushovers?

Improving our competitive advantage

While the matured export industries of tuna and banana are busy fighting for better treatment by no less than the proponents of free trade, there are new agricultural products that have so much potential to bring in more revenues.

Thus, I was pleasantly surprised to see Guimaras mangoes available in US supermarkets during my recent visit there.

At first glance, there may indeed be reason to celebrate because new Philippine products are gaining entry and recognition in foreign territories.

But alas! What was initially a source of pride turned into deep concern after I saw how pricey Philippine mangoes were in that US store. Honestly, I couldn’t imagine myself paying $5, or about P250, for just one mango!

The Guimaras mango may have gained access to new overseas markets, but at its price, it would be difficult to expect large sales volumes. Here is a case where we could screw the opportunity given us.

I couldn’t agree more with Trade Secretary Mar Roxas II when he said there is indeed a need to review our commitments to the Cairns Group, an agricultural assemblage of 18 countries within the WTO, when others have reneged on what has been agreed upon.

But while we’re busy fighting for our rights in the race for borderless trade, we must also not lose initiative in nurturing new areas that could increase our stake in the world market.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. If you wish to view the previous columns, you may also visit my website at http://bizlinks.linkedge.biz.