US, Thailand seen to okay RP bid for rice import quota extension

The Philippines is confident it can shortly lock up a deal with Thailand and the United States for an extension of its quantitative restrictions (QR) on imported rice.

Gregorio Tan Jr., administrator of the National Food Authority (NFA) which heads the negotiating team, said the Philippines will consider Thailand’s proposal for a reduced tariff on imported rice in exchange for the latter’s support to extend the QR on rice imports. "Thailand wants a much lower rice tariff from the existing tariff of 50 percent but at this stage, we told them that we could not go lower than 40 percent," disclosed Tan.

Thailand is the world’s biggest exporter of rice and is one of the regular suppliers of rice to the Philippines aside from Vietnam.

The Philippines is hoping to secure approvals of most countries that sought negotiations with the Philippine government over the issue of extending the QR on rice imports. Negotiations with the US on the other hand, is more complex, according to Tan.

Thailand and the US are the only two remaining member countries of the World Trade Organization or WTO which have not yet approved the country’s bid to continue protecting its local rice sector. "The US wants to include in the negotiations other commodities such as walnuts and grapes among others," said Tan.

In addition, the US is insisting on getting a share of the import allocation in the country’s minimum access volume for corn, which is pegged at more than 200,000 metric tons a year.

It is in the interest of the US to support the Philippines‚ bid for an extension of QR on rice since this will allow them to dispose of their highly-subsidized rice through the US PL 480 program that provides a long-term food loan scheme to developing countries at concessional rates.

"Surely, the US wants a continuance of its PL 480 program, especially since rice grown in the US is not competitively priced and is used merely to prop up prices of their local rice farmers," said a senior official of the Department of Agriculture.

In March 2004, the Philippines asked the WTO for an extension of its QR on rice imports, which is set to expire next month.

Aside from the U.S. and Thailand, WTO-member countries that negotiated with Manila are Australia, Egypt, India, Pakistan, Argentina, China and Canada.

Under a QR system, the government can put a limit on the country’s annual rice import volumes to prevent local rice prices from falling too sharply with the entry of cheaper imported rice.

Local farmer groups said the QR on rice is necessary because the government has failed to provide the safety nets and other support infrastructure such as postharvest facilities, farm-to-market roads and cheap transport systems that will make their produce globally competitive.