Agri group slams fear mongering on WTO sanctions

MANILA, Philippines - The agri-industry alliance Samahang Industriya ng Agrikultura (SINAG) scored former agriculture officials and trade experts yesterday for sowing fear of possible retaliatory trade sanctions should the Philippines continue to impose quantitative restrictions (QRs) on rice.

SINAG researchers said the Philippines has 22 previous and existing dispute settlement cases at the World Trade Organization, but no sanctions were ever imposed against the country even if it was found in alleged violation of certain WTO commitments.

“It is clear that ‘fear mongering’ only serves the interest of smugglers who continue to insist on permit-less importations,” the group stressed in a statement.

“If we follow the assumptions of so-called trade experts, there would have been global trade chaos given the number of cases filed by WTO-member complainants against each other. More than the Philippines, trade sanctions and penalties should have long been imposed on the US and EU since both of them - including our major trading partners - have hundreds of dispute cases between them,” SINAG chairperson Rosendo So said.

The group issued the statement amidst desperate attempts by smugglers – through trade liberalization advocates – to sow fears of imaginary sanctions should the Philippine government maintain quantitative restrictions on rice imports.

“But imposing sanctions is not how the WTO operates. Under WTO’s Dispute Settlement Mechanism, the first option is for disputing countries to settle their concerns among themselves. The operative process is therefore consultations between the governments concerned, and even when the case has progressed to other stages, consultations and mediation remain the principal option,” So stressed.

‘Extend GATT-WTO’

Meanwhile, despite warnings from economists, the NFA and the Department of Agriculture (DA), as well as several senators seem to be pushing the extension of the General Agreement on Tariffs and Trade-World Trade Organization, which was said to be anti-consumer policy.

The GATT-WTO, which imposed special treatment on rice import or quantitative restrictions (QR), expired in June 2012.

 DA and NFA officials and the senators, who made the recommendations during a hearing conducted by the Senate Committee on Agriculture and Food, seemed to be protecting the producer and punishing the consumer, according to economists.

 The recommendations were reportedly in stark contrast to the position of several economists from the University of the Philippines, who called for the abolition of import quotas citing the increasing cost of rice in the market.

Roehlano Briones of the UP School of Economics and the Philippine Institute for Development Studies, the top think tank in Southeast Asia, said consumers would benefit from cheaper rice with the removal of the QR and the levying of moderate tariffs.

 â€œThe country should not seek extension for the QR in rice imports. Any licensed importer should be allowed to make its own commercial decision, subject to payment of tariff and compliance with sanitary and phyto-sanitary standards,” Briones said.

National Economic and Development Authority (NEDA) director general Arsenio Balisacan, who is also pushing for the abolition of the QR with some tariff protection, agreed with Briones.

 The Philippine Statistics Authority-Bureau of Agricultural Statistics (PSA-BAS) has reported the price of rice these days is 13 to 14 percent higher than during the same period last year.

 Well-milled rice sells at P40.06 per kilogram, while a kilo of regular-milled rice costs P36.75.

Agriculture officials have been pushing for the extension of the QR, claiming this was needed to protect the country’s 2.5 million farmers.

 The Senate committee hearing, which has shifted its focus from spiraling rice prices to rice smuggling controversy, will resume today.

 UP economists have reiterated that giving protection to rice producers have come at the expense of consumers, who are the “losers” under the current rice importation policies.

 Former NEDA chief and UP professor-emeritus Gerardo Sicat said the difference in import and domestic prices makes smuggling an attractive activity in spite of the risk of being caught.

Sicat lamented how protectionist policies like import quotas and QR have denied Filipino consumers access to affordable rice. He said rice importation should be perceived in a different light.

 According to UP School of Economics Dean Ramon Clarete, while the import controls exercised by the NFA were meant to protect local rice producers from competing rice exports, Filipino consumers have to pay 40 percent more for the rice.

Sicat stressed the need to balance a wise import policy for rice with a domestic production program that would help local farmers.

“Such a program includes higher investments in agricultural infrastructure, government price support and credit, and technical extension. Under this framework, rice farmers of high quality rice and high productivity can find niche markets even for export,” he said.