RP bid to push tuna exports to EU faces hurdle

The country’s efforts to gain greater market access in the European Union (EU) for its canned tuna faces an uphill climb with the continued resistance of several EU countries.

In a related development, chances grew dim for Philippine tuna exporters hoping to get included in the US Generalized System of Preferences (GSP) list this year. The inclusion in the GSP list of commodities that are going to enjoy lower tariffs is supposed to be in exchange for the country’s support to President George Bush’s war against terrorism.

The Philippines is lobbying for a tariff level of zero percent for canned tuna exports to the EU which currently is slapped a stiff 24 percent tariff. In contrast, tuna from Africa, the Caribbean and Pacific countries enjoy duty-free entry into the EU market.

An industry source said Spain, in particular was the first to oppose the proposal to at least bring down existing tariff levels to 12 percent from 24 percent.

"How can we possibly even come close to asking for a level close to zero percent when Spain is already resisting a 12-percent tariff?" said the industry source.

Spain’s objection is expected to be picked up by other countries bent on blocking tuna exports from the Philippines such as France and Portugal. The Philippines though has gained the support of Germany and the United Kingdom.

The Philippines is awaiting the results of the deliberation of a mediation panel of the World Trade Organization (WTO) after the country filed a formal protest with the WTO last year.

The source said the EU was supposed to have voted last week on a resolution adopting a WTO mediating panel’s favorable ruling to the Philippine case. The panel issued its opinion last December after months of negotiations between the Philippines and the EU.

The Philippines filed a case against the EU last year for the latter’s failure to grant local tuna exporters preferential tariffs which it granted to African, Caribbean and Pacific states. The EU also granted preferential tariffs to tuna products of Andean states like Bolivia, Ecuador, Colombia, Venezuela and Peru.

On government’s efforts to also expand tuna exports in the US market through the GSP, industry insiders said the United States Trade Representative Office only wants pouched tuna to be allowed entry in the huge US market.

However, only two of the tuna exporters have existing facilities that will allow them to shift manufacturing to pouched tuna from canned tuna.

Had tuna been included in the GSP list, the 10 to 30 percent tariff on canned tuna will be lowered to five percent.

The Philippine tuna industry is looking at the US GSP as a means to gain increased market access for its canned tuna exports to the US, and to cushion the adverse impact of the grant of duty free treatment to Andean tuna in pouches.

The Philippines suffered a setback earlier this year when the US Congress approved the Andean Trade Preference Act which provided for duty-free importation of pouched tuna from Andean countries. Tuna in pouches refer to those prepared or preserved in foil or other flexible airtight containers.

Tuna in pouches are in direct competition with canned tuna. The new law gives duty preference to tuna in pouches in sizes not more than 6.8 kilograms which compete with the country’s share in the US market for institutional buyers.

Industry analysts said the emerging market for tuna in pouches is expected to grow by six percent by the end of this year; eight percent by 2005; 12.2 percent by 2007, and 15.4 percent by 2012.

As a result, industry leaders said the country’s tuna exports could drop by five percent in 2003; 15 percent in 2004; and 40 percent in 2005 and beyond.

As it is, data from the US Department of Commerce show that Philippine exports of canned tuna to the US has been declining, from $69 million in 1999 to $46 million in 2000 and $42 million in 2001.