Indonesia wants Philippines import safeguards on coffee mixes lifted

MANILA, Philippines — The Indonesian government is demanding for the Philippines to permanently lift the safeguards on the imports of coffee mixes in exchange for investments in the country.

Agriculture Undersecretary Segfredo Serrano said Indonesia has gone straight to President Duterte to lobby for the removal of the special safeguards on coffee mixes which the Department of Agriculture invoked to protect the local industry.

“They raised the issue to the President. They prepared an agreement without even studying our laws and they want us to permanently lift the SSG. They want to invest here, but the condition is we lift the SSG. I feel insulted that they are making these demands,” Serrano told reporters.

“There is no such thing under our laws. If they want to invest, it is very much appreciated, but without any condition, they can invest and apply for incentives, we will assist, but for them to meddle with our trade policies is something that is totally and completely unacceptable,” he said.

Indonesian company PT. Mayora Indah Tbk manufactures and exports the Kopiko brand to the Philippines.

It was last year when Agriculture Secretary Emmanuel Piñol invoked the SSG amid complaints of local manufacturers that foreign companies were just bringing in processed coffee products into the country without any investments in the local farm sector.

“Our domestic processors that invested in the local coffee industry approached us for the lifting of the SSG on coffee beans because we do not have adequate production of the raw materials,” Serrano said.

“We put a premium on providing safeguard that will protect our local industry in a justifiable manner. The special safeguard action is something that we have notified the WTO. It is not specifically targeted at Indonesia as a trading partner,” he added.

Furthermore, Serrano said Indonesia has not been practicing diplomacy in terms of seeking dialogue with the DA Secretary.

“It’s like a de facto demand from the secretary. Do we even do that to them? For a country that has very good foreign service, with a lot of geopolitical influence, it seems like their actions are not exactly right,” he said.

“The secretary is well aware of the actions done by Indonesia and it is our duty as government officers to protect our people. Plus, we really are making headway in our coffee and cacao and these are avenues for diversification for our small farmers, it will not be on our interest to abandon and leave them to the dogs and vagaries of international trade,” Serrano added.

The Philippines has long been asking Indonesia to ease up on its protocols and open its market access for agricultural products coming from the Philippines to settle the restrictions and disparity in trade imbalance.

Government data showed that Indonesia exports $1 billion worth of agricultural products to the Philippines mainly palm oil, while allowing only a measly $50 million worth  of exports from the Philippines.

The Philippines used to export a huge volume of horticultural products to Indonesia, including shallots and tobacco, but restrictive import policies imposed tilted the trade balance in favor of Indonesia.