RP works out countertrade deal with Iran

The Philippines is working on a tractor-for fruits countertrade arrangement with Iran in a bid to expand the market for its agricultural and fishery products in the Middle Eastern country.

Agriculture Secretary Luis Lorenzo Jr. said yesterday the deal would require Iran to lower its current tariff rates on Philippine bananas and fast-track the implementation of its import regulations to allow the entry of local commodities like coconut, pineapple, mango, papaya, seaweeds and carrageenan, tuna, tilapia and milkfish.

In return, the Philippines would import Iranian-manufactured Massey Fergusson tractors capable of doing 12 agricultural functions including drilling, fertilizing, seeding, harvesting, for use by local farmers engaged in tobacco, corn and sugar production.

"The concept looks good so both the Philippine and Iranian sides are now threshing out details of the agreement," Lorenzo said, after receiving a report from DA Agribusiness and Marketing Assistance Service director Salvador Salacup.

Salacup was a member of a Philippine delegation which went to Iran last month to further discuss the arrangement.

In recent bilateral discussions in Tehran, the country had requested Iran to reduce to 10 percent the current 56 percent tariff it imposes on Philippine banana so that its rate will be comparable to other fruits imported and locally produced by Iran.

It also asked Iran to accelerate the implementation of its import rules and regulations to pave the way for the entry into its market of other Philippine products including coconut, pineapple, mango, papaya, seaweeds and carrageenan, tuna, tilapia and milkfish.

Iran agreed to study the country’s proposals and suggested that other ports of entry into Iran which charges lower rates for incoming Philippine products should be explored.

Lorenzo said the country was also advised to consider allowing tractors made by the Iran Tractors Manufacturing Co. (ITMCO) to enter the local market in support of the government’s farm mechanization program so that in return, Iranian officials will act favorably on Philippine requests.

He said ITMCO and a local partner led by the group of former Ilocos Sur Governor Luis ‘Chavit’ Singson, had already forged a deal last December which will allow the former to initially supply the country with 100 completely built units and tractor spare parts and promote technology transfer and investments in the form of completely knocked down (CKD) supplies.

Lorenzo noted that there are close to 7,500 Fergusson tractors in the country but a number of them are not working because of high cost of American-manufactured spare parts. ITMCO intends to solve this problem by producing spare parts through its local partner with whom it will form a company to be located at the Subic Free Port.