Government urged to press its WTO bid for hike in sugar tariff to 80%

The government should move quickly in asking the World Trade Organization (WTO) to act on its request to raise the bound rate or tariff ceiling on sugar imports to 80 percent this year.

At the same time, Senator Ramon Magsaysay Jr. who heads the Senate committee on agriculture stressed the urgency of informing the WTO of the country’s decision to delay the implementation of a tariff cut on imported sugar.

The tariff cut that is supposed to take effect this July, will reduce tariff on imported sugar to 50 percent, from the current 65 percent.

The reduction is part of government’s commitment to the Doha Round of WTO talks in 2001.

The Philippine government however, acting on the strong lobby efforts of the local sugar industry, has asked the WTO earlier to either increase the bound rate of sugar imports to 80 percent, or to at least maintain the existing 65-percent tariff.

"I understand government has to inform the world trade body about its intention to keep the existing 65 percent tariff cover for sugar before July. I hope government officials move fast so that our sugar producers will not be affected in the short term," said Magsaysay.

Once the government informs WTO of its plan to raise the bound rate for sugar, it could immediately implement this without an executive order.

Malacañang earlier directed the Cabinet-level Tariff and Related Matters committee to draft an executive order to raise import duties on sugar.

Aside from the WTO, the Philippine government also has to contend with the resistance of Thailand, one of the region’s biggest sugar producers and exporters, in delaying the country’s bid to delay cuts on sugar tariffs.

Earlier, both governments were working out a scheme wherein Bangkok will allow Manila to maintain its existing tariff rates in exchange for the importation of some 200,000 to 250,000 metric tons (MT) of rice from Thailand.

The industry wants to bring back its glory years and is planning a P34.4-billion five-year action plan starting this year that seeks to increase production to 3.1 million metric tons (MT). Sugar industry officials said the sugar plan will be bankrolled mainly by the private sector, with funds expected to come from commercial banks.