Singapore seeks access to RP petrochem mart

Singapore has asked the Philippines to allow a number of its midstream petrochemical products market access as compensation for allowing the country to delay the liberalization of the petrochemical sector under the Common Effective Preferential Tariff (CEPT) scheme, Trade and Industry Secretary Manuel Roxas II said yesterday.

"The Philippines is currently studying the list and assessing the impact on the local plastics industry," Roxas said.

"However, Singapore gave its assurance that the list of products are mostly raw materials and do not pose competition to the local midstream plastics industry," he added.

Under the CEPT scheme which took effect early this year, all member-countries of the Association of Southeast Asian Nations (ASEAN) are supposed to bring down their individual tariffs to a common range of zero to five percent.

However, a member country may seek the exemption by invoking a protocol that would allow the deferment of the liberalization of a certain industry.

The Philippines had asked for a deferment of the liberalization of the petrochemical sector, thus giving continued protection for the industry until the end of next year.

Government decided to delay the liberalization of the petrochemical industry following a strong lobby from the remaining petrochem manufacturers and on hopes that a long-planned naphtha cracker project would finally materialize before the end of 2004.

"However, countries who ask for a delay from coverage of the CEPT must be prepared to compensate other ASEAN countries which are directly affected by the delay in CEPT coverage," Roxas explained.

In the case of petrochem sector, the countries which are directly affected by the Philippines’ decision to delay the sector’s liberalization are Thailand, Singapore and Malaysia.