Thailand and Singapore are the two main opponents to the Philippines’ request for a delay in the Common Effective Preferential Tariff (CEPT) scheme for certain petrochemical products.
Singapore is the biggest supplier of petrochemical products in the region while Thailand is emerging as the next biggest supplier.
Government sources said a delay in the lowering of tariffs for certain petrochemical products by the Philippines would directly affect the two countries.
The CEPT-ASEAN Free Trade Agreement (AFTA) is supposed to take effect starting January next year.
Under the CEPT-AFTA, Asean member countries are supposed to bring down their tariff barriers to between zero to five percent to allow for a freeflow and exchange of goods among member countries, thus creating a bigger common market.
However, under CEPT-AFTA, member countries can invoke certain protocols to delay the liberalization of certain products which the respective member country thinks need further protection.
However, in invoking the protocol, the member-country must agree to compensate the directly affected Asean members by agreeing to lower tariff on other products.
Trade and Industry Secretary Manuel Roxas II said the Philippines has decided to defer the opening of the local petrochem industry to secure temporary relief from tariff reduction.