Vietnam questions NFA regulation on rice imports

MANILA, Philippines - Vietnam is questioning the government requirement for an import permit to allow the entry of imported rice.

The Vietnam Food Association (VFA), Vietnam’s   regulatory body for rice exporters, said import permit from the National Food Authority (NFA) is not necessary as quantitative restrictions (QR) on rice importations can no longer be implemented pursuant to the World Trade Organization (WTO) – General Agreement on Tariffs and Trade (GATT) that the Philippines had signed.

In a letter coursed through Customs Commissioner Ruffy Biazon last Oct. 22, VFA representative Pham Van Bay said: “We are of the position that WTO QR on rice entering the Philippines has indeed expired on June 30, 2012 and as a member country of the WTO we are aware that the WTO QR in favor of the Philippines has not been extended.”

The VFA said with the expiration of QRs, import permits were no longer necessary for rice to enter the Philippines, provided the applicable tariff rate of 50 percent is paid by the importing entity after compliance with customs procedures.

Biazon was asked to comment on the issue.

All WTO member countries have agreed to improve market access and reduce trade-distorting subsidies and restrictions in agriculture.

The organization, however, granted the Philippines “special treatment” for rice and was allowed to impose quantitative restrictions on its importation from 1995-2005.

While extension was allowed in 2004 after the “special treatment” first expired, this has since lapsed in June 2012.

Representatives from the Department of Agriculture (DA) have been tasked to obtain extensions of the privilege, but the WTO has twice denied it.

While the DA insists on negotiating for another extension, other agricultural groups expressed concern that this may be pursued at the expense of the livestock and poultry sectors.

Hog raisers said tariffs on meat products were reduced “as concession” for the retention of QR on rice from 2007 to 2012.

The NFA has been questioned for seizing rice shipments in the Port of Davao.

Silent Royalty Marketing and Stracraft International through lawyer Benito Salazar said: “Unless the Philippines is ready and willing to admit publicly that it has no intention of complying with its commitments under the WTO, it has no choice but to allow importation of rice without QR.

“If your good office insists to the contrary, then the country should be properly informed and advised to prepare for dispute cases to be initiated by WTO members and the possible sanction that will be imposed.” 

Salazar provided reporters in Manila copies of the VFA latter to Biazon in a press conference over the weekend.

The DA’s Food Staples Self-Sufficiency Program (FSSP) recommends that the country allow the expiration of QRs by 2012.

Economist Roehlano Briones from government think tank Philippine Institute for Developmental Studies (PIDS) had proposed the same for consumers to benefit from cheaper rice.

“Competition gives farmers an opportunity to improve efficiency, raise competitiveness, or even shift to other commodities, which can offer them greater returns, such as high-value crops,” he said.

Experts estimate that replacing QRs with appropriate tariffs can increase government revenues by as much as approximately 7 billion pesos annually, which in turn can be invested in irrigation and post-harvest facilities to increase agricultural production.