RP finds allies in trade row with Australia

The Philippine government has found some allies in its escalating trade war with Australia, with the European Union, US and Thailand expressing support for its plan to file unfair trade practices against Australia before the World Trade Organization (WTO).

As this developed, some of the country’s major milk importers are reportedly looking for sources of milk other than Australia.

DA Acting Undersecretary for planning, Sigfredo Serrano said the European Union and Thailand indicated they will back up the Philippines’ request for a formal consultation with the dispute settlement committee of the WTO.

The formal consultation in Geneva, Switzerland, will be done alongside bilateral talks with the Australian government to the ticklish issues of allowing the entry of Philippine bananas and pineapples in the Australian market.

The US also hinted it will be pushing for Australia to allow better access to its elusive agriculture market.

"In case the talks are stymied and graduates into a full-blown dispute, the US, although saddled with its own trade disputes, said it will definitely support the Philippine position," said Serrano.

The Philippines is expected to start bilateral talks with Australia within 30 days.

The government has submitted two letters to David Herbert Spencer, Australian Ambassador to the WTO, raising questions on the quarantine laws and the measures affecting the importation of fresh pineapple fruit, fresh fruits and vegetables.

"We are taking the battle on two fronts. Aside from raising specific issues affecting the importation of fresh pineapples, we are also questioning the Australian government’s entire quarantine rules on the importation of fresh fruits and vegetables," said Serrano, adding "what we are questioning in both cases are not only the quarantine rules but also their legislation." This will be the first time Australia’s quarantine laws will be questioned by another country.

In both letters signed by Philippine WTO Ambassador Edsel T. Custodio, Serrano said Australia’s Quarantine Act is inconsistent with the obligations of Australia under the General Agreement on Tariffs and Trade, the Agreement on the Application of Sanitary or Phytosanitary Measures (SPS), and the agreement on Import Licensing Procedures.

Serrano said the Philippine government decided to expand the scope of the bilateral talks by questioning Australia’s entire quarantine laws to strengthen its case.

"The traditional approach is to discuss this on a commodity basis, but limiting the talks on pineapples and bananas will be to our disadvantage because we will surely be bogged down by technicalities and dragged into this situation indefinitely," explained Serrano.

The bilateral talks will take at least 60 days. The next step is for the Philippines to charge Australia with unfair trade practices before the WTO if nothing comes out of their talks.

"Hopefully, we can work out something, if not, we will request the WTO to create a panel that will arbitrate our case," added Serrano.

Australia has been fiercely blocking the entry of Philippine pineapples, and said its acceptance rests on the country agreeing to de-crown the fruit and subject it to pre-shipment methyl bromide fumigation.

At the same time, Australia is also preventing Philippine bananas from penetrating its domestic market, saying this will cause infestation of its local banana plantations.

While this developed, the major milk importers from the Philippines are scouting for other sources of the commodity, this is apparently being used as one of the bargaining points by the country in its trade tiff with Australia. Other possible sources of milk imports include India.

"There was no prompting on the part of the government, this was entirely initiated by the importers who feel the need to diversify its sources," said Serrano, denying talks the government pressured importers.

Currently, Australia accounts for nearly 80 percent of the country’s total milk importations. The rest come from New Zealand, The Netherlands, Denmark and the US.