RP nixes US bid for lower corn tariff

Government has rejected a US proposal for the Philippines to reduce its import tariff on corn from 35 percent to three percent in exchange for US support to the Philippines’ bid to keep its quantitative restrictions (QR) on rice.

National Food Authority (NFA) Administrator Gregorio Tan Jr. said the US is exploring the possibility of making permanent the zero tariff importation of 58,000 metric tons (MT) of corn by the agency earlier this year.

"This was not possible however. The imposition of reduced corn tariffs are on a case to case basis. We always have to consider the domestic situation and its potential impact on the local market," said Tan.

Jessica Reyes-Cantos, lead convenor of the non-government organization Rice Watch and Action Network (R1), said the proposal for a drastic drop in the tariff on corn demonstrates the US’ lack of subtlety in agriculture negotiations.

"Most of the corn farmers, especially in Mindanao are rice farmers as well. While the volume we are allowing at a lower tariff could be considered negligible considering the shortage in local corn production, the government if it had conceded would have given up the revenues from these importations," said Cantos.

The US is also demanding that under the US Public Law 480 or Food Aid Program, the Philippines will only get rice from this facility and not any other commoditiy such as wheat or soybeans. It also wants to bind the tariff rates of grapes and walnuts to three percent.

"The US is bullying the Philippines to commit to US Public Law 480 to ensure them of a market for their highly-subsidized rice," noted Cantos.

R1 said the DA should consider the effect of giving the US assured market for rice and its adverse impact on local rice farmers.

"The acquisition price of US rice is almost always above world market rates. The US disguises most of its agriculture dumping as food aid. This is very much true with how they use PL 480 to dump rice into the domestic market," said Cantos.

Oxfam International said the US Department of Agriculture subsidized $1.3 billion of the $1.8 billion cost of its rice production, footing the bill for 72 percent of the cost. Between 2000 and 2003, one metric ton of US white rice cost $415 for growing and milling. It was dumped in the export market at $274 per metric ton, 34 percent lower than its true cost.