The government has abandoned plans to ask the World Trade Organization (WTO) to extend the quantitative restriction (QR) on rice due to lack of time, the Department of Agriculture (DA) said on Wednesday.
In a news briefing in Malacañang, Agriculture Secretary Emmanuel F. Piñol said the government will no longer file for an extension of the rice-import quota, which is set to expire on June 30.
Piñol said this was the result of the discussions in the recent Committee on Tariff and Related Matters (CTRM) meeting. The CTRM is cochaired by the secretaries of Trade and Industry and Socioeconomic Planning.
“In the last meeting of the CTRM, the consensus was against [DA’s position]. The QR will expire and the government cannot do anything about it,” he said.
The DA chief noted that the country’s application for the QR extension was processed over a period of two years. To date, the Philippines is the only country in the world that continues to implement rice import caps.
Piñol said the “saving grace” for the Philippines would be the Republic Act (RA) 8178, or the Agricultural Tariffication Act of 1996, which has not yet been amended by Congress. RA 8178 needs to be amended to allow the Philippines to replace the QR—a nontariff barrier—with a specific duty.
He said the law can effectively prevent the influx of cheap imported rice into the Philippines. No bill has yet been filed in Congress to amend RA 8178. “We are hoping that our friends in Congress will be sympathetic with the Filipino farmers,” Piñol said.
Trade experts and the National Economic and Development Authority (Neda) expressed concern that the failure to amend RA 8178 under a post-QR scenario could open the country to WTO sanctions.
Former Tariff Commissioner George Manzano told the BusinessMirror that sanctions can be imposed against the Philippines if other WTO member-countries complain about paying a higher duty due to the nonamendment of RA 8178.
Currently, the government allows rice imports within the minimum access of volume (MAV) of 805,200 metric tons (MT) to enter the country at a lower tariff of 35 percent. Imports in excess of the MAV are slapped a higher tariff of 50 percent.
“My guess is we will be open to sanctions if an exporter complains and brings the matter up in the WTO,” Manzano said.
Sanctions from the WTO could mean trade partners asking for concessions such as lower tariff on specific goods or nondelivery on the trade pacts.
However, Manzano said before these are imposed, the WTO needs to subject complaints to due process. He said this is the importance of the WTO—placing order on global trade.
Neda Undersecretary Rosemarie Edillon told the BusinessMirror that concessions may not be considered as sanctions since the Philippines has made trade concessions in the past, particularly in the maintenance of its QR.
These concessions include allowing the entry of more dairy and livestock imports. These concessions, she said, was used by the economic managers to extend the QR.
“Concessions are not sanctions. Sanctions include not importing from the Philippines,” Edillon said.
To prepare for the scrapping of the QR, she said the government needs to discuss concessions at the CTRM as early as now. Once the CTRM has decided, the government can now make the necessary commitments.
‘Government failure’
Despite extending the rice-import quota twice, Piñol said millions of farmers remain poor due to the inaction of the government.
“I am not blaming anybody. I am not blaming a specific administration, I am not blaming a specific individual. But the plain and simple truth is that the government has failed to deliver,” he said.
Piñol cited the failure of the government to expand irrigated rice lands in previous years. Of the 3.9 million hectares of Philippine rice farms, he said only 1.3-million hectares are irrigated.
This means that around two-thirds of rice farmers in the country could only produce rice—a water-loving crop—once a year.
Piñol said the government also failed to convince farmers to adopt hybrid-rice seeds, which could increase yield, and bring down the cost of production.
“As of the moment, of the 3.9 million hectare of rice farms, only 300,000 plus is planted to hybrid seeds,” Piñol said.