The Department of Agriculture (DA) is seeking zero duty on Philippine sugar exported to Japan, stressing that Tokyo has failed to reciprocate a reduction in tariffs on farm products as required by a free trade agreement between the two.
Both countries are currently reviewing the Philippines-Japan Economic Partnership Agreement (PJEPA) in a bid to renegotiate commitments made under the accord.
“They have previously committed to allow our locally produced sugar to enter at lower tariff. We should not waste this opportunity,” Agriculture Undersecretary Segfredo Serrano told reporters.
To recall, Japan previously denied the Philippines’ appeal to lower tariffs on sugar, citing possible effects to its own sugar producers and the need to reform their marketing system.
The Philippine panel earlier said that it will push for a regular sugar quota of 150,000 to 200,000 metric tons and a reduction of tariffs to zero.
“We are also asking for a higher premium for the sugar that will be shipped to Japan,” said Rosemarie Gumera, SRA manager for planning and policy.
If approved, the proposed sugar quota allocation would be bigger than what the United States grants the Philippines. The Philippines is one of the select countries given an annual allocation of sugar export to the US market at a premium.
Manila currently has a regular US quota of 138,827 MT for crop year 2012 to 2013. Aside from Washington, Manila also exports its sugar to the world market.
“Once approved, we will be able to ship more sugar to other markets so that we will not rely on the traditional sugar quota allocation from the US,” Gumera said, referring to the Japanese market.
Serrano, however, said that they have already dropped the CSQ (country-specific quota) negotiations, saying that an unlimited export volume at zero tariff will be more competitive for local sugarcane producers.
“Japan has a little over 300 hectares of sugar production areas, which makes it more desirable for our exporters. Why would we limit the volume when we can do better at lower tariff,” he stressed.
Besides sugar, the Philippine government is also asking its Japanese counterparts to approve 3,000 tariff lines at zero tariff—mainly agricultural and marine products for which the Philippines has competitive advantage.
The PJEPA is a bilateral agreement intended to liberalize trade, investments and labor relations between the two countries. The Philippines is seeking a review of the PJEPA due to Japan’s failure to fulfill its own commitments under the agreement.