DA submits list of commodities under Asean-China Early Harvest Program

The Department of Agriculture (DA) submitted to the Department of Trade and Industry (DTI) a list of 208 commodities it wants to be covered under the ASEAN-China Early Harvest Program.

Agriculture Secretary Arthur Yap said the DA turned over the department’s new list of commodities that could be opened up to the huge China market.

"We have finalized the list and we are hoping this will be part of the agenda of President Arroyo during her official state visit to China next month," Yap said.

Under the ASEAN-China Framework Agreement on Comprehensive Economic Cooperation, member countries of the Association of Southeast Asian Nations (ASEAN) are given preferred duty access to the lucrative Chinese market in exchange for the lowering of tariffs on specific products China wants exported to the ASEAN.

"The items we included is a result of extensive talks with various affected sectors. We have looked at the issues and we concluded that this is the extent with which we could open up the market for China. We do hope we qualify and get the program going," said Yap.

Yap said earlier that if the list is rejected, the DA will have to consider other options such as the regular schedule of tariff reduction under the ASEAN.

Under the regular track the ASEAN has with China, the Philippines has more time to schedule the lowering of tariffs unlike in the early harvest scheme where tariffs could be automatically reduced to zero by 2005.

Yap said the country is willing to open up high value fruits but the struggling livestock, rice and corn sectors still needs protection.

"Livestock, rice and corn we would benefit a lot if we open, but these are very sensitive areas. Livestock is cheap because corn is so abundant in China. Rice because of their hybrid technology," noted Yap.

On the other hand, Agriculture Assistant Secretary Segfredo Serrano said the country is still in a bind because it has a lot of sensitive sectors that could barely stand competition from the onslaught of cheap agricultural imports from China.

"We have a lot of sensitive sectors. China wants very few exceptions to Chapters 1 to 8 which cover unprocessed raw agricultural products. The bulk of our sensitivities with relative to China belong to that group," Serrano said.

Should China reject the new list to be submitted by the Philippine government, this will cloud the prospects for the country’s export winners.

"The disadvantage of this is our export winners would be left behind in terms of accessing the China market. But then most of our exports to China pass through Hong Kong because there appears to be some difficulties accessing the different ports and markets in China because of certain differential rules, differential base rates that are difficult to hurdle and understand by our businessmen," Serrano said.

Serrano explained that a major concern is that such a trade agreement should build up domestic farmers’ confidence to undertake joint ventures and to extend adequate support to enhance their competitiveness.

"We are keen to join the early harvest program provided they accept our initial offer. We want to gradually prepare our farmers but to suddenly expose them be unfair," he added.

Under the current structure of Philippine agriculture, opening up its doors to China will primarily benefit bigger companies. On the other hand, small producers would be hit-hard.

"Who are the ones going to be hit? Vegetables, corn farmers, livestock which is about 75 percent backyard. Those who would be hit essentially would be small players. We do not have yet at this time in our system a structural adjustment mechanism wherein which the winners could compensate the losers," Serrano said.