US seeks rice export quota to RP

The United States (US) is seeking a rice export quota or allocation in exchange for its support to the Philippine government’s decision to retain its quantitative restrictions (QR) on rice.

Manuel A.J. Teehankee, Philippine Ambassador to the World Trade Organization (WTO) said several countries have also expressed their intention to negotiate for a rice export quota from the Philippines.

"Other countries like Pakistan, including the US, while not opposing a limited extension of the Philippine QR on rice, wish to be assured of some access for their rice exports even if in limited volumes," said Teehankee.

Thailand also said it wants a guaranteed export quota if it will back up the Philippines’ move to retain its QRs.

Previously, Agriculture Secretary Arthur Yap said the Thai government’s position is being closely studied to determine if an allocation of the country’s rice import requirements to a specific country is legal.

"We have to study and seek legal opinion because we do not want to violate existing laws," said Yap, referring to government’s procurement laws which states that all government purchases should be auctioned or done through a public bidding.

National Food Authority (NFA) said the agency which is tasked to oversee the country’s rice and corn importations, already sought the opinion of the Department of Justice last month.

Yap said that the government also has to find out if Thailand rice prices under a rice export quota would be based on prevailing market prices or if these will also be negotiated.

Thailand was earlier said to be asking for an allocation of its sugar exports instead of sugar. Aside from being a major rice supplier in the world market, Thailand is also a big sugar producer in the region.

Aside from the US, Pakistan and Thailand, other countries like China, Australia, Canada, India and Argentina also said they will negotiate with the Philippines on the issue of QR on rice.

Last April, the Philippine government filed before the WTO its intention to extend QR on rice imports which lapses on June 30, 2004. It said maintaining the QR on rice will give local rice farmers time to improve their competitiveness against the surge of cheap rice imports.

By maintaining the QR on rice, the country can limit the volume of imported rice coming into its ports.

Local farmer groups like the Philippine Peasant Institute (PPI) continue to oppose moves to lift QRs on rice and replace this with tariffs.

PPI said tariffs do not guarantee protection of local rice farmers.

Farmers said that imported rice such as those coming from Thailand and Vietnam, major rice-producing countries in the ASEAN, even if slapped with high tariffs of more than 100 percent, will still come out cheaper than locally-grown rice because competing countries’ production costs are lower and heavily subsidized by their respective governments.

Moreover, PPI said tariffication is only the first step to full-scale liberalization.

"Although tariffication means replacing the QRs with an equivalent level of protection, such protection will only be short-lived as WTO rules prescribe subsequent reduction of tariffs," said PPI previously.

Unlike other rice-producing countries in Asia, the Philippines’ rice sector suffers from low productivity, mainly because the sector has not been getting adequate support from the government.