WTO members press PHL to meet rice-tariff deadline

13.06.2017

The Philippines is now being pressured by fellow World Trade Organization (WTO) member-countries to honor its commitment to implement a rice-tariffication scheme, with its twice-extended quantitative-restriction (QR) privilege already set to expire at the end of the month.

A ranking official, who is privy to the recent meeting of the WTO Committee on Agriculture (COA) in Geneva, said WTO member-countries are “closely” monitoring the process that Manila is undertaking to complete its shift to rice tariffs.

“Members questioned the Philippines’s plan to convert its import restrictions into tariffs,” the source said.

“Australia, Thailand, the US, the EU, Canada and Vietnam signaled their interest in this matter, and will follow up closely on further updates. They stressed the importance of respecting WTO commitments within the agreed deadline.”

The source said the Philippine representative to the COA meeting on June 7 informed the members that the government has started to move forward to the tariffication of
rice imports.

“The Philippines informed members that the President and Cabinet have already initiated the process to convert rice-import restrictions into tariffs, and it is currently being considered by the Filipino Congress. The tariffication will be implemented once Congress passes the legislation,” the source said.

During the June 7 COA meeting, WTO member-countries sought for updates and clarification regarding the Philippines’s commitments under its waiver on the special treatment on rice.

Canberra, for its part, questioned Manila if it would already lift its nontariff measure on rice starting July, according to a document uploaded on the WTO’s web site.

Meanwhile, Bangkok sought clarifications on the detailed process Manila is undertaking to complete its rice-tariffication process; particularly, the procedures on its rice imports that it will be imposing, should the process go beyond the June 30 deadline.

“Can the Philippines confirm the implementation date on rice-tarification process? In case of delay, can the Philippines clarify procedures from July 1, 2017, to the day that tarification being applied?” the WTO document read, quoting the questions submitted by Bangkok for the June 7 meeting.

Washington raised the question whether the Philippines plans to extend the tariff concessions if its government is unable to pass the legislation that would remove the rice QR by July 1. Washington added that it would “appreciate” any updates on the status of Manila’s legislation process and actions to tariff rice imports.

“The United States understands that rice tariffication is unlikely to occur prior to the June 30, 2017, deadline for the expiration of the rice waiver, due to a delay in passing the legislation required to remove the QR on rice imports,” the WTO document read.

“The Philippines has indicated it may extend the tariff concessions that were granted in exchange for the rice waiver in the event that the required legislation is not passed by the June 30 deadline,” it added. On July 24, 2014, the WTO General Council approved the Philippines’s waiver on the special treatment on rice, allowing Manila to keep its QR on rice until June 30.

However, the WTO General Council approved the waiver on the condition that the Philippines will subject its rice imports to ordinary custom duties by July 1.

“At the expiration of this waiver, and no later than June 30, 2017, the importation of rice shall be subject to ordinary customs duties in accordance with paragraph 10 of Annex 5, Section B, of the Agreement on Agriculture,” the WTO General Council decision read.

However, in an earlier COA meeting in Geneva in March, the Philippines informed WTO members that it is facing delays in implementing a tariff-rate quota for rice and might exceed the deadline set under the waiver.

The delay is caused by the amendment process of Republic Act 8178, or the Agricultural Tariffication Act, which imposed the country’s QR on rice indefinitely. Under RA 8178, rice is the only agricultural commodity with QR and the law did not specify a termination date for it. This means that even if the Philippines’s waiver expires on June 30, the government is still bound to implement the QR on rice, as mandated by RA 8178.

As a sign of “goodwill” to its trading partners, President Duterte signed Exceutive Order (EO) 23 last month, extending the concessions made by the Philippines in securing the waiver in 2014. The temporary modification of most-favored nation tariff rates is effective until June 30, 2020, or until such time a law amending certain provisions relating to rice in RA 8178, or the Agricultural Tariffication Act, is enacted, whichever comes first.

“The EO of the President is good, because we will preserve the concessions so there would be no motivation for our negotiating partners to sue us,” Agriculture Undersecretary for Policy and Planning Segfredo R. Serrano said in an earlier interview.

However, Serrano also reiterated that retaining the concessions is not a guarantee that the country will be able to avoid trade disputes while it is undertaking the necessary processes to convert the import caps into a specific tariff rate. Serrano, one of the country’s trade negotiators, pointed out that moves to amend RA 8178 should prioritize the scrapping of the QR so the Philippines could avoid disputes due to “breach” of trade commitment.


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