"We are prepared for the worst, but we are quite optimistic that Canada will come around and see it our way. After all, Canada is aware it is not a major rice producer and what they are asking is impossible for the Philippine government to consider. Our rice trade with them should not be affected," said Gregorio Tan, administrator of the National Food Authority and lead negotiator for the Philippine panel negotiating the QR talks with member countries of the World Trade Organization (WTO) that earlier challenged the country’s request to maintain its QR on rice.
In exchange for its approval, Canada, one of the Philippines’ biggest suppliers of pork, wants the lowering of tariff imports for pork to five percent from 30 percent.
The Philippines is not likely to concede because this will adversely affect the competitiveness of the local hog sector.
Tan said the government is willing to bring down the tariffs for imports of canola oil and other canola-based products from the current average of seven percent to three percent.
"That we could agree on because there is no local production of canola oil," said Tan.
Despite being upbeat about the outcome of talks with Canada, it is crucial that the Philippine government secures Canada’s approval.
"We could lose our bid to extend our QR on rice even if only one country dissents and rejects our request. The talks are about consensus building and we need that," pointed out Tan.
The Philippine government will insist on continuing the QR on rice because the rice sector, bereft of government subsidies provided by its foreign competitors, cannot withstand the entry of cheap imported rice.
The alternative, which is to impose higher tariffs on imported rice is not yet feasible given the current sorry state of the local rice industry.
The Philippine government has formally notified the WTO of its intention to extend Annex 5 privileges on rice in the Agreement on Agriculture (AoA) on June 30.