Thailand expects to negotiate an increase in its rice-import quota to the Philippines to more than 100,000 tons to compensate for Manila’s decision to maintain its high import tariff for another five years.
Under its World Trade Organization (WTO) and Asean Free Trade Agreement (Afta) obligations, the Philippines is required to provide such compensation for maintaining the high tariff.
Srirat Rastapana, director general of the Thai Trade Negotiations Department, said on Tuesday that Thai rice exports should have a brighter future in the Philippines thanks to growing demand for the grain there. As a result, Thailand must negotiate to ensure the import quota is increased, or the high tariff could see Thai rice lose market share.
Manila recently asked the WTO for permission to keep its import tariff on rice at a high 40 percent for another five years through 2017. In return, it must increase the Country Specific Quotas for Thailand and other rice-exporting countries.
Currently, Thailand is allocated a quota of 98,000 tons under WTO rules.
Thai and Philippine officials negotiated here on Tuesday the minimum market access for rice imports. Manila is also negotiating rice quotas with Vietnam, Pakistan, India, China, the US, Australia, Canada and El Salvador.
Srirat said that Thailand and the Philippines had yet to reach a final agreement on the size of Thailand’s rice quota because the kingdom was pressing Manila to accept a quota of several hundred thousand tons.
The Philippines must increase its quota for Thailand under its Afta and WTO commitments. Manila does not have to abolish import tariffs on rice, because it classifies the commodity as a “highly sensitive good.” However, it has offered Thailand an annual rice-import quota, on which no tariff is imposed.
Under the WTO and Afta, the Philippine import tariff on Thai rice shipments beyond the import quota is 40 percent for 2010-2012, and will be reduced to 35 percent in 2015.
The Philippines has also promised to import at last 367,000 tons of rice from Thailand. The country is also expected to import 50,000 tons of premium-grade Thai rice.
Thailand also wants to participate in drafting the bidding conditions for rice imports into the Philippines to ensure transparency.-Black Pearl (August 03, 2012)
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