Rice importers whose shipment have been seized on orders of the National Food Authority (NFA) have contested NFA authority to issue discretionary import permits for rice in light of the expiration of the country’s right to impose limits and restrictions in the importation of the critical food staple.
The legal team representing the importers also argued that the NFA’s continued insistence on enforcing import restrictions on rice is in violation of the World Trade Organization (WTO)—General Agreement on Tariffs and Trade (GATT)
Lawyer Benito Salazar, legal counsel of Silent Royalty Marketing and Starcraft International maintains “the NFA lost its authority to issue permits for the importation of rice when quantitative restrictions on rice were lifted in June 2012.”
The NFA, however, continues to argue that the quantitative restrictions remain in effect. In its 6 September 2013 letter addressed to Salazar and signed by NFA Special Assistant to the Administrator Dennis Guerrero, NFA said that “quantitative restriction on rice remains effective” per Republic Act (RA) 8178.
NFA Administrator Orlan Calayag subsequently issued statements accusing Silent Royalty Marketing and Starcraft International, among others, of being involved in rice smuggling operations in Davao.
“The NFA should seriously consider the ramifications of its insistence on its authority to issue permits for the importation of rice. Are they now saying we have no obligation to honor major international trade agreements?” Salazar asked.
“Maybe NFA Administrator Calayag would have a better appreciation of the intricacies of international trade if he convened the NFA Council more often and learned from its more experienced and learned members from the DTI [Department of Trade and Industry] and DOF [Department of Finance],” he added.
Salazar explained that the NFA position was inconsistent with international agreements the country was party to. In a letter dated 10 September 2013 addressed to NFA Administrator Orlan Calayag, Salazar stressed that “the issuance by NFA of an import permit is classified as discretionary import permit” and that such was considered “a form of Quantitative Import Restriction.”
Salazar emphasized that with the expiration of the quantitative restrictions in June 2012, “the right of the Philippines, including the NFA, to impose Quantitative Restrictions [including issuance of NFA import permits]has already elapsed.”
Quantitative restrictions allow member-countries of the World Trade Organization (WTO) to restrict the importation of sensitive agricultural products. The Philippines became a member of the WTO in January 1995, and like all WTO member governments agreed to improve market access and reduce trade-distorting subsidies and restrictions in agriculture.
A “special treatment” provision in the WTO agreement, however, provides for restriction on imports of primary sensitive agricultural products subject to strict conditions.
Based on the “special treatment” provision for rice granted by the WTO, the Philippines was allowed to impose quantitative restrictions on rice and was exempted from rice import liberalization from 1995 to 2005.
In January 2004, the country requested an extension of the privilege, and was allowed to continue imposing quantitative restrictions until June 2012. While government representatives from the Department of Agriculture (DA) have been tasked to obtain extensions of the privilege, they have twice been denied by the WTO.
The fact that the country had repeatedly asked for an extension of the “special treatment” or quantitative restrictions, Salazar added, only proves that the government is aware that WTO approval was necessary before it could continue enforcing the said restrictions. “DA/NFA will not expend so much effort and expense in trying to convince member-countries to agree to another extension if the former consider the same to be unnecessary,” explained Salazar in his letter.