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SUGAR
producers are urging the Philippine government to
negotiate the delay in reducing tariffs on sugar
products to zero percent to 5 percent by 2010 as
provided for under the Asean Free-Trade Area (AFTA)-Common
Effective Preferential Tariff (CEPT) scheme.
Rafael
Coscolluela, administrator of the Sugar Regulatory
Administration (SRA), disclosed that sugar producers
want to extend tariff protection on raw and refined
sugar beyond 2010, citing the decline in their
competitiveness due to increasing production and labor
costs.
Currently, tariffs on sugar products are between 28
percent to 38 percent. Under the AFTA-CEPT, this should
go down between zero percent and 5 percent in 2010.
“Sugar
producers submitted a position paper asking the
government to negotiate for delaying the reduction of
tariffs on sugar,” said Coscolluela in an interview.
“The
industry’s position is, despite the increase in farmers’
productivity, there were certain developments that
[eroded] the competitiveness of sugar producers. These
developments are the drastic increase in the price of
oil products, as well as the increasing cost of
fertilizer,” said the SRA chief.
In their
position paper, sugar producers are asking the
government to negotiate for the reclassification of raw
and refined sugar as a “highly sensitive” product, as
this will allow the Philippines to delay the reduction
of tariffs on sugar products.
In 2001
raw and refined sugar was moved to the so-called
“sensitive list” from the temporary exclusion list,
allowing for the phasing-in of tariff reductions for
Philippine sugar products under the AFTA-CEPT.
When
asked until when the sugar producers want the tariff
protection, the SRA chief said the time frame remains
“open-ended.”
As a
concession, Coscolluela said sugar producers have
proposed to allow the expanded access for imported
bioethanol products from Asean member-countries, since
the Philippines has yet to fully meet the requirements
of the Biofuels Act of 2005.
The
proposal of local sugar producers may not sit well with
Thailand, which has become one of the top exporters of
sugar in the world in recent years. Thailand has become
the Philippines’ major source of rice and sugar in the
region when local production fails to meet the
anticipated demand of the domestic market.
AFTA is
a trading agreement originally signed by six members of
the Association of Southeast Asian Nations (Asean),
namely, Brunei, Indonesia, Malaysia, the Philippines,
Singapore and Thailand, in 1992.
The
free-trade arrangement seeks to increase Asean’s
competitive edge as a production base in the world
market through the elimination of tariffs and nontariff
barriers. |
