Date: April 2003

Tariff on Vegetables Raised to 25 Percent

The Philippine government has raised the tariff on imported vegetables from 7 percent to a range of 20 to 25 percent in an effort to provide relief to Filipino farmers complaining about the deluge of cheap vegetables from other countries.

The Cabinet-level Trade and Related-Matters Committee (TRM) increased the Most Favored Nation (MFN) tariff rate on carrots and lettuce to 25 percent and the tariff rate on 20 other vegetables to 20 percent.

Agriculture Secretary Luis Lorenzo said the move would ease the anguish of farmers in the Cordillera region, many of whom have stopped planting vegetables because of the influx of cheap vegetables from China.

Reports said that the cost of agricultural production in China is so low that Chinese vegetables could easily outsell Philippine grown vegetables in terms of quality and prices.

Another problem is the continuous smuggling of vegetables into the country. Shipments of vegetables from temperate countries are being misdeclared as fruits in order to be allowed into the Philippine market.

While several farmers groups welcomed the increase in tariff rates on imported vegetables, the Philippine Peasant Institute (PPI), a militant farmers organization, said the government should have raised it to 40 percent, the tariff ceiling allowed by the World Trade Organization (WTO).

There were reports that Trade and Industry Secretary Manuel Roxas II wanted the tariffs on vegetables raised up to 40 percent, but other Cabinet officials agreed during the TRM meeting that this does not go well with the Philippines' commitment to the Common Effective Preferential Tariff-ASEAN Free Trade Area (CEPT-AFTA) where tariffs on most products are now between zero to five percent.

As a member of the WTO, the Philippines is expected to bring down the tariff on all products at a gradual phase to zero percent. The WTO is now trying to have its members commit to further liberalization of the agriculture sector, as contained in the Doha Declaration of 2001 and a draft prepared by WTO agriculture committee chair Stuart G. Harbinson.

For one, the Doha Declaration expects the WTO members to improve market access of agricultural products through substantial tariff reduction, removal of export subsidies, and reduction in domestic support.

The Stop the New Round! Coalition, a local group opposing the country's participation in the WTO, said that the Philippines can ill afford to give further commitments to liberalize its agricultural sector and that what the agriculture sector needs is a break from the onslaught of liberalization.

Somehow, the increase in tariff on vegetables shows that the Philippine government recognizes that it needs to protect its farmers, in the same way rich countries protect theirs. "Rich" countries like the US, Japan, and Australia have been trying to impose qualitative restrictions on Philippine grown fruits like mangoes, bananas, and pineapples.

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