RP’s tuna exports face tougher competition in US, EU markets

The local tuna industry faces tougher competition with major markets like the European Union (EU) and the United States favoring tuna suppliers from Central America, the Caribbean and Andean countries.

Moreover, Spanish and Italian tuna canners are crafting a new fisheries code for the region that would effectively keep out tuna exports from ASEAN tuna producers like the Philippines.

"In the next few years, ASEAN tuna suppliers like the Philippines could see their market share declining as there are various measures being done to keep us out of their shores," said Francisco Buencamino, president of the Tuna Canners Association of the Philippines (TCAP).

This year, the United States is negotiating an expanded free trade agreement (FTA) with Central American countries (CAFTA) that include the Dominican Republic, Nicaragua, Costa Rica, Guatemala, El Salvador and Honduras.

Once in effect, import duties on tuna products under CAFTA will be gradually reduced over a 10-year period ending in 2010, which would result in tuna products entering the US market at zero tariff.

The tuna products that will immediately be given a zero duty are tuna in oil, tuna not in oil, not in airtight containers, and bonito in oil and not in oil. Other tuna products will be given a low two percent tariff upon effectivity of CAFTA, but the reduction will be increased to eight to 16 percent until it hits zero percent.

"We should be watching the negotiations closely because it already passed both Houses in the US Congress," said Buencamino.

Another threat is the Caribbean Basin Trade Partnership Act that became effective this January. This resulted in a low one percent to 2.5 percent tariff for tuna products entering the US from the Caribbean countries.

Buencamino said the US is also holding its 10th round of FTA negotiations with Andean countries like Bolivia, Colombia, Ecuador and Peru.

One of the possible talking points is to expand the privilege of zero duty on imported pouched tuna from Andean countries to include other tuna products.

In 2002, the US signed the Andean Trade Preference Act that helped Bolivia, Colombia, Ecuador and Peru fight narcotics trafficking by lowering tariffs on flowers, clothing and other exports to the US. The aim was to bolster local economies and encourage local farmers to plant legitimate market crops instead of the coca and poppies used to make cocaine and opium.

Buencamino said that the local tuna industry should also be wary of FTAs and bilateral agreements being worked out by the US with Australia, Japan and Thailand.

In the EU, Spain and Italy, which account for 65 percent and 19 percent, respectively of the EU tuna canning industry are opposing other sources of tuna and its variants.

He said that the EU World Trade Organization general-directorate of fisheries has commissioned a study on new guidelines that will define fish sector.

"Unfortunately for the Philippines and all of ASEAN, the Spanish National Association of Canned Fish and Seafood Producers is a member of this committee and we can expect unfavorable moves against ASEAN tuna when the study is completed," said Buencamino.

These new developments will again leave ASEAN out in the cold, said Buencamino.

The EU and US markets account for about 75 percent of world tuna consumption. The EU market accounts for 42 percent of the country’s tuna exports and comprises 49 percent of canned tuna exports.