Lorenzo pushes higher tariff rates for vegetable imports

Agriculture Secretary Luis Lorenzo Jr. wants government to apply the maximum 40-percent World Trade Organization (WTO)-bound rates on certain vegetables and rootcrops to protect local farmers from the onslaught of imported agricultural commodities.

If approved, the current or applied seven percent tariff on a number of imported vegetables and rootcrops will be jacked up to the maximum WTO-bound rate of 40 percent.

Bound rate refers to the highest tariff that a country can impose on a certain product in line with its commitment to the WTO.

"We want to take it as high as possible for the time-being," said Lorenzo, saying that local vegetable farmers need the reprieve while they are still preparing for the eventual breaking down of tariff walls and opening up to foreign competition.

Agriculture Assistant Secretary Segfredo Serrano said this move, if approved, should be good for the agriculture sector, especially with the proposal of the US to impose new tariffs based on the applied or current rates rather than the bound rates.

"If we are able to get approval to apply the bound rates now, that should still give us room when it happens that developed countries’ proposal to further break down tariff walls is imposed. We will still have protection unlike if the applied or current rates are the starting point for the implementation of proposed new tariffs, then that would really wipe us out because our tariffs are already very low," Serrano said.

Lorenzo said the DA will also push for the inclusion in the so-called "sensitive list" of such agricultural products as leek, cauliflower and headed broccoli, Chinese cabbage, lettuce, chicory, carrots, turnips, radish, cucumber, green peas, snap beans, celery, red and green pepper, spinach, onions, ginger and peel of fruits and melon.

At present, sensitive agricultural products are limited to rice, corn, sugar, meat of swine and poultry and coffee. These products are levied the maximum allowable bound rates.

At the same time, these products are also eligible for special agricultural safeguards which is an additional tariff that could be imposed on top of the regular tariffs.

Lorenzo pitched for the expansion of the sensitive list in the board meeting this week of the National Economic and Development Authority (NEDA) where Trade Secretary Mar Roxas II, chairman of the tariff and related matters Cabinet committee, presented the draft executive order for the 2003 MFN (most favored nation) tariff package.

DA’s request however, will be decided after a series of public hearings to be conducted by the Tariff Commission since this is a requirement under Section 401 of the Tariff and Customs Code of the Philippines.